Case 5 • NIKE Europe
NIKE is a name that scarcely needs any introduction. It has been one of the business phenomena of the 1980s and 1990s, second perhaps only to Microsoft in its pursuit of global dominance from very humble beginnings. Founder Phil Knight famously made his first shoes using a waffle iron in what he has called' a tiny operation in my mother's laundry room'. By 1992 it had become a $4.5 billion turnover corporation.
In fact, NIKE's history goes back to 1963, when Knight (still today very much the head
of the business) set up Blue Ribbon Sports to import running shoes from Japan to the US, or even to the late 1950s when he ran for the University of Oregon track team and started looking for better footwear. The name (Nike was the Greek goddess of victory) did not appear until 1972, and sales ...view middle of the document...
It prides itself on being a bit different, creative, iconoclastic. The senior team used to meet together for six-monthly strategy reviews that became known as 'buttface' meetings, with no holds barred and plenty of shouting at each other. Inevitably, as the company grew to have 10,000 employees (or associates as they are known), something of the informality had to go. The surprise, perhaps, is that it managed this transformation without coming to grief. One part of the founding philosophy that is still fundamental is the pursuit of athletic performance. To outsiders, NIKE may appear to live in a fashion-dominated sector, but fashion is not a word that NIKE people like to use. They consider it to be a technology company and insist that their success stems from performance and quality, not slick salesmanship.
With growth came internationalization. In Europe, NIKE initially worked through distributors, selecting local partners in each country. The success of these led the company IDdecide that it wanted to own its own distribution, and gradually through the 1980s it bought out its distributors and converted them into wholly owned subsidiaries, each operating largely autonomously. A European headquarters was set up, which migrated several times through different countries before settling at Hilversum (The Netherlands),
1mt it remained small and did not even act as a financial holding company for NIKE in
Nineteen-ninety-two was the year that NIKE set out to do something about Europe .
..had now reached over $1 billion of sales in Europe alone. It owned its distribution in
:> • the major countries but each country still ran its own operations. Roger 'Iragesser, an
::xperienced logistics professional who had set up NIKE's operations in Memphis, was
SEnt to Europe to take a fresh look at how the business was being run. With the help of
:mlSultants, he set about rethinking NIKE's European logistics from scratch, In