A 7 page paper discussing information presented in Harvard Business School Case 9-595-102 (1995). CEO Phil Knight stated in 1990 that Nike's focus for the 1990s should be that of athletic shoes and clothing, later refining that focus to one of marketing, rather than production. By 1993, the company had opened tourist-attraction stores, founded a professional athlete career management business and entered into an alliance with a large Hollywood talent agency, all the while bemoaning that European managers could not comprehend the Nike "spirit and message." The company failed to understand that its arrogance toward consumers and focus on activities unrelated to marketing athletic shoes and clothing masked any "spirit and message" that may have existed. The paper recommends that Nike return to focusing on its core business. Bibliography lists 1 source.
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The company had experienced excellent growth during the decade of the 1980s, even topping 25 percent in the early part of that decade. Consensus was that the US
market was "mature," and both companies faced much slower growth in the US in the coming years. The Situation
Nike was still growing in the early 1990s but growth had slowed. The student writing on this topic should remember that in 1991 the US
experienced the only recession of the decade. It is admirable that Nike could maintain the growth it did during the period. "In 1990, 78% of NIKE revenues had
come from the United States. However, the U.S. athletic footwear market was growing at only 3-5% per year" (p. 1). Both Nike
and Reebok professed goals of becoming the worlds leader in the lines in which they competed; CEO Phil Knight believed that Nike should remain focused on athletic shoes and clothing,
market aggressively and complete a few strategic acquisitions during the decade of the 1990s. Later on, Nike decided instead that it should be a marketing company and use athletic
shoes and clothing as the product it chose to market. "The design elements and functional characteristics of the product6 itself are just part of the overall marketing process" (p.
2). That belief in Nike as a marketing company was backed with 11.5 percent of the companys sales in 1993 being dedicated to advertising. Estimates of the companys
1993 advertising expenditures totaled $281 million, which represented a 22 percent increase over the preceding year. At a time when other organizations were
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