INTRODUCTION

NIKE was experiencing its lowest point. At 1983, profits are down by almost 40%. It was then that Phil
Knight decided to return and change the direction the NIKE was taking that time. Numerous actions
were done to prevent the NIKE from falling further. During those times, many were affected: employees
were displaced and some of their own supplier plant was closed down. But it was seen by Phil Knight as
a necessary action in order to save the NIKE from its downfall.

Main Problem : Profits are down by almost 40%

PROBLEM SOLUTION
-Focus on futures ordering and demand -Price Slash
forecasting -Worked with company’s larger national accounts
-Large operating cost -Bartering
-Swollen Inventories
-Low sales resulting to higher remaining inventory -Formalized procedures: 5% increases in sales, 5%
and negative gross margin cut in operating expenses
-Cutting 10% of NIKE’s workforce
-Shutting down 5 suppliers-owned plant
-R&D was separated from the corporate resulting -Relocation of R&D
to lack of communication and collaboration
between design and marketing
-Missing major market trends -Created divisions on major product categories
-Slow response/ uncoordinated response -“get some I.Q around here”
-Strayed too far from its core business - Reviving NIKE’s “AIR” Technology
-Products are not shippable - Air Jordan: collection selling
-Did not have color-coordinated apparel
-Cannot meet the demand for the production of -Allocation method
Air Jordan
-Air Jordan II was not a profit engine -Displacing 280 employees out of 2150
-Michael Jordan was injured
-Clogged up its distribution channel with excess
inventory
-Division of speed groups: “mainstream NIKE” and -Develop other people, mainly those who are on
“one running around it” resulting to duplication of the verge of being fired, already quit, and those
others effort and conflicting direction who were just about to go
-Jumping from one project to another -Broke the old organizations approaches
-Tension between employees and the head -Matrix Organization
-The public’s lack of knowledge about the product -Air Packs
-Lack of advertisement of NIKE as a whole -Air Revolution
SWOT ANALYSIS

STRENGTHS

 Matrix Organization
 Allocation Method
 “get some I.Q around here”
 NIKE’s “AIR” Technology

WEAKNESSES

 Focus on futures ordering and demand forecasting

 Swollen Inventories
 Large Operating Cost
 Missing major market trends
 R&D was separated from the corporate

OPPORTUNITIES

 International Market

THREATS

 Lack of advertisement of NIKE as a whole

 Lack of knowledge about the product
 Lack of supply to meet the demand

CONCLUSION:

At the span of 3 years, under the lead of Phil Knight and his team of trusted employees, they were able
to save NIKE from its downhill. The effective actions and decisions that were made by Knight can be
viewed as a success seeing how the NIKE today is still standing and is now one of the biggest players for
sports footwear, apparel, equipments and accessory products.