Summary on Shoes topic

My Summary

Blog #2 was about the price of shoes and how people respond to incentives in predictable ways. New shoes endorsed by celebrities are overpriced and quickly becomes limited in supply. There is a much bigger difference in how much companies spend on the products than what they sell the shoe at. Blog #3 was about the most successful shoe company and how people respond to the best company. Nike stays ahead of their competitors in terms of technology and marketing. Nike buys out competing sport product brands. Nike focuses on product quality and creating products that help athletes perform better. Nike provides a wide variety of products to a large number of sports to capture greater market share. Nike maximizes marketing money with sports endorsements and uses social media to present their digital marketing.

Blog #4 was about how Jordan found a shoe company and how all choices have an opportunity cost. Jordan wanted to wear Adidas in the NBA but they weren’t making an offer. Adidas was caught at a bad time with founder Adi Dassler dying in 1978 and his wife and kids having to take over the business. When Jordan negotiations became tense, the wife got very sick and died later in the year so negotiations had fallen apart. To read more on what I thought was the most interesting topic I researched, visit this site. (http://www.espn.com/blog/playbook/dollars/post/_/id/2918/how-nike-landed-michael-jordan)

Blog #5 is about why leather is the best. Leather has a history as being the best shoe material and so it is still the most popular shoe material of today. Leather is flexible yet durable. It is sturdy. It is elastic so it could be stretched without tearing. It's breathable material and regulates temperature. Leather shoes can adjust to the comfort of the shoe wearer.

How Jordan Found a Shoe Company

Rovell on ESPN

Jordan wanted to wear Adidas in the NBA but they weren’t making an offer. Adidas was caught at a bad time with founder Adi Dassler dying in 1978 and his wife and kids having to take over the business. When Jordan negotiations became tense, the wife got very sick and died later in the year so negotiations had fallen apart.

When those negotiations did not work out, Jordan went to Converse, the company his college coach made negotiations with. The Tar Heels all wore Converse sneakers in games. But Converse wasn’t coming up with new innovative ideas for Jordan, treating him like all the other stars, and began losing its spot as the nation’s top producer of athletic shoes.

OJ Simpson was the first to call Jordan the best new star in sports. In the summer of 1984, OJ said “This kid at North Carolina, he’s the next me… we should go for him.” Simpson was the vice president of promotions for the Spot-Bilt brand, a shoe owned by a company named Hyde Athletic that had paid Simpson to wear Juice Mobiles while playing in the NFL. They used O.J. as an example of what they could do and explained that Jordan would be the most important athlete in their portfolio if he wore the Spot-Bilt brand.

Nike was a fast-rising star. The company's revenue went from $28.7 million in 1973 to $867 million by the end of 1983. But things had started to turn on them toward the end of the year. In February 1984, the company reported its first quarterly loss ever. Nike needed Jordan if only the company could get him on a plane. “I have no interest in going there,” Falk said Jordan told him. “Just do what you need to do to get me with Adidas.” Jordan said he had never put on a Nike shoe in his life.

Nike offered Jordan $500,000 a year in cash for five years, which was a ridiculous number at the time. The previous highest contract was James Worthy's deal with New Balance, an eight-year deal worth $150,000 a year. Jordan would earn $7 million over those five years. If Jordan didn't accomplish one of four things -- win Rookie of the Year, become an All-Star, average 20 points per game, or sell over $4 million worth of shoes -- in his first three years, it could end the deal two years early. Jordan still wanting to sign with Adidas, went back to his Adidas contract and said, 'This is the Nike contract -- if you come anywhere close, I'll sign with you guys.'" They could not match it so he signed with Nike, while Spot-Bilt was the runner-up. In the coming weeks, Falk came up with the Air Jordan name and Nike was working hard to make a splash.