Inventory Problems at Nike

One of the leading sports goods companies in the world, Nike manufactured high quality athletic shoes for a variety of sports including baseball, athletics, golf, tennis, volleyball and wrestling. In addition to footwear (which accounted for almost 60 percent of the company's sales), Nike also manufactured fitness equipment, apparel and accessory products. The company's products were sold in over 140 countries around the world. Headquartered in Beaverton, in the state of Oregon, Nike had production facilities scattered around the world and had a complicated supply chain system that extended from Nike factories in developing countries in Asia to uptown stores in the US and other parts of the developed world.

In the early 1960s, when Knight was doing his MBA at Stanford University, he submitted his marketing research dissertation on the US shoe manufacturing industry. His assertion was that low cost, high quality running shoes could be imported from labor-rich Asian countries like Japan and sold in the US to end Germany's domination in the industry.

In 1962, while on a world tour, Knight met the management of the Onitsuka Company (Onitsuka) of Japan, which manufactured high quality athletic shoes under the brand name 'Tiger'. He arranged for these shoes to be imported to the US for sale under the name 'Blue Ribbon Shoes' (BRS).