What was Nike's best strategic move?

When Phil Knight and Bill Bowerman started Nike as a running shoe company that offered only one type of shoe, no one could have ever imagined the growth this company would see.  Over the years there have been many strategic decisions made that have landed Nike in the Fortune 500.  The most notable of these decisions was the development of a line of basketball shoes worn by Michael Jordan.

Because Knight and Bowerman were both runners, they had an understanding of what the shoes should be capable of and how they should feel.  Bowerman's initial shoe, the Cortez, was designed specifically for distance runners and was a huge success.  However, in order to grow they knew that Nike would need to be more than just a running shoe company.

Nike had branched out into different sports in an attempt to generate additional revenue.  They even provided entire teams with Nike shoes for free as a means of advertising.  This helped Nike grow, but only to a point.

In 1984, with no increase in sales, even after Carl Lewis won Gold at the Olympic Games wearing Nike shoes, they knew they needed to make a strategic move.  That move was doing whatever it took to sign Michael Jordan to an endorsement deal.  Nike successfully landed Jordan by offering him an unheard of contract of $500,000 per year, designing a shoe to be worn exclusively by Jordan and naming it after him.  All of the pieces fell into place at the right time and the Jordan brand was born.

Michael Jordan received Rookie of the Year honors in 1985.  Nike released the Air Jordan 1 in March of 1985 and sold $70 million worth by the end of May.  The rest is history.




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