Where did Phil Knight go Wrong?

Phil Knight, the CEO of Nike created an incredible business plan for his company. He outsourced all his manufacturing, which intern lowered cost giving him more money and time to put into marketing, allowing him to find the best candidate to attract to a wide range audience. Michael Jordan and Tiger Woods were perfect celebrities to connect to the brand of Nike because they were influential to adults as well as younger generations. The celebrity marketing technique immediately grabbed the attention of so many Americans creating huge brand identity for Nike, making the swoosh as well known as any other top product at the time. Knight’s strategy seems incredible and well thought out but where did he go wrong?

The answer to this question should be clear. It should be that he went wrong when he decided to under pay workers, allow underage workers in Indonesian plants, coerced overtime in china, had dangerous working conditions in Vietnam and other series of labor incidents but that is not the answer we as Americans gave to Phil Knight in 1997. As stated in the Harvard Business School article “ The Company asserted that criticism of Nike’s labor practices had nothing to do with the downturn. But it was clear that Nike was suffering from a serious image problem. For whatever reason Americans were sick of the swoosh.” These few sentences from the article were very powerful to me, even thought the entire article is about Nike and international labor practices, the reason Nike has lost some of its market share in 1998 was due to the lack in interest in its athletic gear, rather than international labor practice concerns.

To me the message we are sending to companies, CEO’s and our society overall is that profit is all that matters. After going through years of protest, government constraints, and bad press, the main cause of Nikes downturn is due to the changes in fashion and athletic trends. What are we telling our society with this message? If our economy is profit driven than is it right to ignore labor cost in order to produce a more economically satisfying marketing strategy because based on how our society reacted to Nikes bad press, poor reports and accusations it seems as though it is acceptable.

This entry was posted in Business, Cases (Real World), Ethics, Uncategorized and tagged , , . Bookmark the permalink.

One Response to Where did Phil Knight go Wrong?

  1. JWitty says:

    Amen. If permit company that’s “struggling” to do whatever it takes, there’s a pretty decent chance they’ll take you up on that offer. While I don’t think Nike should be let off the hook for its atrocious business practices, it’s important to look at the context within which they operate. Profit should NEVER be all that matters. Call me a liberal but I do believe companies have some social responsibility. I mean, is anyone besides Phil Knight ok with forcing 14 year old kids to do sweat labor? I really hope not

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