Primary Question for Adidas. Does Adidas's corporate strategy, including recent acquisitions and restructuring, stay true to its brand while positioning itself to improve shareholder value and challenge Nike as the leader of the global sporting goods industry?. Secondary Questions.
Analysis – Adidas was an early entrant into athletic shoe industry. They developed many of the features still present in shoes today.
Created a strong brand based on high quality, innovative products that top athletes choose to use in training and competition.
Developed strong following with top track and field athletes.
Applied this same model years later with soccer shoes and apparel.
Successful because adidas was creating innovative, high quality products.
Product innovation enabled marketing innovation.
Different than Nike – marketing is what set them apart from the start.
43% of sales from Europe, which is slowest growth market
Encouraging that #1 in developing eastern European market, Russia expected to be most profitable market in Europe by 2010
2006 acquisition of Reebok not enough to overcome Nike in North America
Growing number of sales in Asia market, fueled by adidas success in China.
Strong demand and large population
Analysis – strong growth trend in sales in two very attractive emerging markets. Growth may be result of Adidas brand strength in soccer, world’s most popular sport.
Analysis – Adidas is strong in several developing markets (Eastern Europe, China) but its focus and acquisitions have been geared towards overtaking Nike in the large, but slow growth North America market.
Key Growth Potential:
Europe – continue focus on soccer (including endorsements) and build brand loyalty
Asia/Latin America – increase distribution network and brand awareness
- All three regions averaging double-digit growth rates
1999 – 13% of total
2007 – 35% of total
Decreasing reliance on U.S. Market:
1999 – 69% of total
2007 – 52% of total
Metalwoods currently hold number one ranking.
Irons hold less than half market share of industry leader
Golf balls have seen limited success
Over 70 touring pros lift apparel presence.
Conclusion – TaylorMade should hold U.S. market share in U.S. given the brand’s strenghts, however, TM is only 8% of Adidas AG global revenues. TM cannot help Adidas overtake Nike in U.S. market
Conclusion – The majority of Adidas’s revenue streams are outside U.S. market and are growing significantly – let Nike lead U.S. market but dominate Europe and emerging markets.
Conclusion – Use Adidas’s control and production efficiencies to enhance Reebok’s distribution network in U.S. to increase U.S. revenues.