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Nike's Response to International Trade Challenges In the 1970s, Nike faced a critical challenge that could have ended its existence.




The company, at the time known as Blue Ribbon Sports, was growing rapidly but encountered a huge obstacle: the United States government demanded payment of 25 million dollars in unpaid tariffs. This amount, according to Phil Knight in his memoirs, could have put the company "out of business". However, Nike managed to navigate through this crisis and continue its growth trajectory.

This incident offers valuable business lessons:

Crisis Management: Nike demonstrated that facing problems head-on and seeking proactive solutions is crucial. The ability to negotiate and find common ground with the authorities allowed the company to settle the litigation for a significantly lesser sum.

Resilience: The ability to survive tough times is essential for any business. Nike used this incident as a turning point to strengthen its brand and business strategies.

Constant Innovation: Despite legal and financial problems, Nike continued to innovate, which eventually led them to launch the revolutionary Air technology and sign agreements with athletes that boosted their brand image and sales.

Brand Power: Nike has consistently invested in marketing and promotion, a strategy that has proven effective over time. The partnership with prominent athletes and the focus on customer experience have helped Nike maintain its leadership position in the industry.

Nike survived this episode and thrived, becoming one of the most valuable companies and the most popular sports brand in the world, with continuously growing brand value and revenue. The company has continued to expand globally with a wide portfolio of stores and a significant online presence.

These business lessons underline the importance of agility, brand strength, and innovation in business management, elements that have been crucial to Nike's long-term success.

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