The Swoosh Takeover
Camille Hayes
English 1000-71
December 8, 2010
Philbrook
People ask me what the best thing about being a college athlete is. I rarely tell
them about the great coaching, friendships, or motivating challenges I experience.
Instead, the first thing that comes to my mind is mentioning how good it feels to
represent Nike every time I put on the gear given to me by the athletic department. I
don’t think I would say the same if our gear were Adidas or Reebok. Nike is the
biggest sports apparel empire in the business and wearing that swoosh gives me a
sense of pride.
Sales revenue, athlete endorsements, and advertising play a big role in
becoming the leader of a competitive industry like sportswear. Despite popular
competitors like Adidas, Reebok, Under Armor, and Puma, Nike, Inc. has been able to
have great success in all three of those categories. Because of this, Nike, Inc. is the
most powerful sportswear company in the industry. The domination of those three
criteria also leads to Nike being more influential than any other athletic apparel
company. The amount of influence a company has is a big determinant of how much
money it will make. Many people believe that money is power, so ultimately Nike’s
large influence on our generation and its large fan base leads to more money for
them in the long run.
Nike takes the cake when comparing how much money is made by each
sportswear company a year. According to Wikinvest, a website sponsored by ETrade that follows stocks, during the fiscal year ending May 31, 2010, Nike had total
revenue of over $19 billion. This is compared to only a little over $10 billion by
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Adidas and almost $2.5 billion by Puma. One specific shoe made by Nike, the Air
Force 1, has brought in more sales than any other athletic shoe created by any
brand. Since 2007, one of the versions of the Air Force 1 has been the top-selling
sneaker of any brand (Townsend). Both Nike and retailers that sell their products
rely heavily on the brand to stay atop of the game. A few years ago, Nike was
controlling both their competition (Adidas and Reebok) and sportswear retailers.
According to Barbara Smit, who worked closely with sportswear executives when
authoring Sneaker Wars, Foot Locker, the largest sports retailer in the world,
admitted to needing Nike products in order for the company to stay alive. The store
decided to halt sales of Nike merchandise after a change in trading conditions.
Ultimately, Foot Locker resorted to begin selling Nike again because it simply could
not survive without it. This only gave Nike more control over the industry.
Along with the recognition of this new, stronger and tighter control came the
realization that Nike’s competitors had to be proactive in devising ways to continue
being legitimate contenders. Their solution: combining companies in an attempt to
battle Nike’s control over the market. In the summer of 2005, Reebok’s chief
executive, Paul Fireman, announced that he was no longer capable of heading the
company (because of five heart bypass surgeries), and it was being taken over by
the management of Adidas. The new conglomerate unfortunately still could not
stand up to Nike’s success. After Adidas’ first year of ownership of Reebok, both
brands combined had sales of $10 billion, compared to Nike’s $13 billion on its own
(Smit 336).
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Athlete endorsements are related to power because the athletes bring in
interested consumers. The more a company is able to control and bring in more
customers, the more revenue it will bring in. Nike strategically uses athletes to reel
in consumer interests, and ultimately widen the spectrum of targeted customers.
Nike sponsors a long list of superstar athletes including Lance Armstrong, LeBron
James, and Maria Sharapova. The company brings in a large amount of revenue
because of endorsements like these. In due course, fans of these athletes become
fans of the brand. At first thought, one might automatically think that Nike’s target
customer is the active and athletic young adult. But because Nike endorses athletes
in many different sports and with different backgrounds, it brings in a wide range of
customers. For example, fans of LeBron James will be attracted to Nike because
James is connected with Nike. That instantly gives Nike an “in” with the basketball
crowd. On the other end of the spectrum, cyclists who are fans of Lance Armstrong
might also be more prone to wearing Nike as their main brand. But, in addition to
cyclists, cancer survivors or those somehow connected to the disease might support
Nike because of Armstrong’s Livestrong line. Since Nike introduced the Livestrong
brand in 1997, it has helped the Lance Armstrong Foundation raise $325 million to
help fight cancer, according to www.livestrong.org. The money donated to the
foundation not only helps fund cancer research, but also goes toward helping cancer
survivors get back on track with their lives. This gives Nike an opportunity to reach
out to an entirely different set of consumers than the originally thought active
person of Generation Me. A larger span of consumers equals a larger income for the
company. Endorsements however are not the only way Nike expands its target
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customer. Another way they do this is by offering apparel for a variety of athletic
activities. Besides its original focus in creating track and field shoes, Nike now offers
all types of equipment for basketball, football, baseball, yoga, soccer, and even
cricket.
When it comes to advertising, Nike is definitely ahead of the game. It has
accomplished this by the creation of the swoosh. Nike is single-handedly responsible
for introducing the game of image-recognition to the sportswear industry (Goldman
and Papson 183). The swoosh has arguably become the most recognizable logo of
any business. Not only do we recognize it, but we can also identify that it is called
“the swoosh.” We might be able to point out the stripes of Adidas or the logo of
Reebok, but we cannot put a name to the symbol. Do we know if they even have
names? (For the record, Reebok’s executives call its logo the “vector,” but really, no
one knows that.) Often, we now see the swoosh and only the swoosh used in
advertising to represent Nike. It has become a replacement for actual text. Nike is
currently in their fifth version of the logo, which now officially features only the
swoosh. All earlier versions included both the swoosh and “NIKE” somewhere along
with it. From 1993 to 1997, Nike increased their spending on advertisement from
$250 million to $978 million, much of that dedicated to developing and promoting
the swoosh (Goldman and Papson 16). The decision was beneficial for the company,
as more and more people are naming Nike as a top brand in any industry. Teenage
Research Unlimited, the world’s top researcher on tween-to-twenty-something
opinions, conducted a study to determine what adolescents and young adults
considered to be their “top twenty brands.” The results showed that Nike was
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clearly the top brand, with 38% of those surveyed listing it as number one. Reebok,
Adidas, Fila, and Converse were also on the list, but none even closely compared. In
second place came Guess, with a non-competitive 17% of number one votes.
Along with the swoosh come other forms of advertisements, like
commercials. Nike is known for its daring commercials and other innovative ads.
According to the American Marketing Association, Nike was welcomed to their Hall
of Fame in 1991 because their ads “have had a dramatic impact on our lifestyle,
becoming enshrined as American icons.” The influential advertisements have
continued since then. An October USA Today article discusses the most recent
controversy in Nike advertisements. Nike has once again stirred the pot with a
controversial LeBron James commercial where he pokes fun at himself, the media,
and the truths (and falsities) about him. Some enjoy the commercial and think it
carries a strong message. For others the commercial only solidified their alreadynegative view of James. Regardless of how positive or negative the opinion on the
commercial, the important thing to realize is that the brand is making an impact on
your life, which is what advertising is ultimately about.
Supporters of other athletic apparel companies like Adidas and Reebok might
claim that they are the leaders in the industry. However, the facts show that that
cannot possibly be true. Each year, Nike has higher total revenue than both Adidas
and Reebok, even though the two brands are now run under the same management.
In addition, Nike has the highest-selling athletic shoe of any brand in the Air Force 1.
Although Reebok has the advantage of outfitting both the NFL and the NBA, Nike has
a bigger advantage in endorsing big-name athletes with large fan bases. They, along
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with their successful work with Livestrong through the Lance Armstrong
Foundation have widened the range of consumers and furthermore brought more
money into the corporation. The last reason proving Nike’s power and control over
the sportswear industry is all of its advertising triumphs. It continues to create ads
that are sure to catch people’s eye, and the importance and high regard held with
the swoosh confirm their top spot in the race of advertising. The one thing Nike has
against them is the reputation it has with its competitors. Reebok’s ex-chief
executive, Paul Fireman, once said that “Nike always think[s] of whoever is their
number one opponent as a warlike enemy. They’re insane, sick, disgusting” (Smit
334). He noted that because Nike is so aggressive with its retailers, other brands
were constantly battling for shelf space in stores. I guess sometimes you have to do
whatever it takes to be the best.
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Works Cited
Goldman, Robert and Stephen Papson. Nike Culture: the Sign of the Swoosh. London,
Thousand Oaks, New Delhi: SAGE Publications Ltd, 1998. Print.
Livestrong.org. 5 December 2010. <http://www.livestrong.org/>
Rose, Lacey. “The World’s Best-paid Athletes.” Forbes. 22 March 2006. Forbes on
msnbc.com. 5 December 2010
<http://www.msnbc.msn.com/id/11961246/ns/business-forbescom/>
Shuster, Rachel and J. Michael Falgoust. “In new ad, James takes shots at critics,
himself.” USA TODAY 26 Oct. 2010. Academic Search Premier. Web. 7 Dec.
2010.
Smit, Barbara. Sneaker Wars. New York: HarperCollins Publishers, 2008. Print.
Townsend, Matt. “Nike Air Force 1.” Bloomberg Businessweek 16 Aug. 2010.
Academic Search Premier. Web. 17 Nov. 2010.
Wikinvest. Wikipedia, n.d. Web. 18 November 2010.
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