In the 1960s Phil Knight, then operating a small running shoe company called Blue Ribbon Sports, imported Onitsuka Tiger running shoes from Japan.
It wasn't until 1971 that the company put the Nike name on its first running shoe and began its rise in the sports footwear world -- thanks primarily to the running boom that started in the late '70s. By the early '80s, Nike had made an impact.
Reebok had responded to the challenge and actually pulled ahead of Nike in market share in those years. But just when it looked like its world was collapsing, Nike made a bold move in 1985 -- making basketball legend Michael Jordan and the company big stars.
With Mr. Jordan, Nike uncovered an undeveloped market: basketball footwear. Edgy TV commercials featuring Mr. Jordan focused on a whole new way to market footwear -- linking sport, fashion and a hip lifestyle. Revolutionary youth-targeted TV commercials gave Nike a clear, cool identity that has virtually defined sports apparel.
Nike also used urban-smart spots featuring film director Spike Lee and Mr. Jordan and locking up these young customers for many years.
While riding the crest of the Jordan wave, Nike snagged another niche market: the cross-training shoe. Backed by popular "Bo Knows. . ." TV commercials using two-sport star Bo Jackson, Nike stirred yet a whole new market.
Nike "made even bigger right-steps from then on," says Rick Burton, director of Warsaw Sports Marketing Center at the University of Oregon. "The visible air concept in the heel of the shoe . . . Michael Jordan, the cross-trainer [shoe] and the banking on [young golfer Tiger Woods" were key moves.
Nike has become what Phil Knight has indeed envisioned some years ago. Mr. Knight's philosophy, according to Mr. Burton, was: "Let's do for Nike what the Japanese have done for cameras." That meant when there was any thought of athletic shoes or sports apparel, Nike should be considered the first brand mentioned.
These days, Nike has new battles to fight, with teens and young adults rebelling against Nike -- the brand of their parents. Some of Nike's market has slipped away. Likewise, Nike has shifted billings away from Wieden & Kennedy, Portland, Ore, to Goodby, Silverstein & Partners, San Francisco, then after two emotionally intense years, went back to W&K.
Still, Nike dominates with more than a 40% market share in the U.S. athletic-shoe category.
"[You can't] show me any company [that] has gone from a start-up in the '60s to a $10 billion a year company primarily built around shoes," says Mr. Burton.