CHAPTER:1 INTRODUCTION ADIDAS AG is a German sports apparel manufacturer and part of the ADIDAS Group which consists of REEBOK Sportswear Company, TAYLORMADE-ADIDAS Golf Company, and ROCKPORT. Besides sports footwear, the company also produces other products such as bags, shirts and other sports and clothing related goods. The company is the largest sportswear manufacturer in the world. The company’s clothing and shoes designs typically feature three parallel bars, and the same motif is incorporated into Adidas’s current official logo. Adidas headquartered in Germany, is regaining its position as one of the leaders in athletic footwear, after being close to bankruptcy in 1993.Adidas currently has about 17% of the market share in the USA (Anonymous, 2000).When Adidas merged with SALOMON (a French manufacturer of skis and golf clubs) in 1997 for $.4 billion, many outsider saw it as a bad strategic move .In the past, Adidas has the global dominance, but in this decade NIKE has taken over that position. Similar to Nike Adidas is restructuring by streamlining the product range. Adidas-Salomon designs, develops and markets a broad range of athletic and active lifestyle footwear, apparel and hardware products under Adidas, Salomon, Taylormade, Mavic and Bonfire brand names.Adidas-Salomon product are sold in over 160 countries in the world .
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Adidas-Salomon has athletic shoes from tennis to basketball and now, with the purchase of Salomon, they offer ski, golf, and bike gear. Although, many offline retailers offer these items, they are not yet available at Adidas.com.The website offers most of their athletic shoes line and many of their athletic apparels. The prices of the items are comparable to those in the retail store. Adidas.com offers a number of their athletes like Kobe Bryant, Anna Kournikova and Peyton Manning commercials online and provides the user with insight on each of them. In addition to using these athletes, Adidas.com uses the promotional strategies to attract the customers to their website by offering a trip to Yankees Stadium and meeting the team. Adidas mission statement applies to both their online and offline companies.Their mission statement reads ,�our mission is to become the best sports brand in the world.to that end ,we will never equate quantity with quallity.our founder adidassler was passionate about sports.foradi,theathelete came first.he gave those on the field,the quote and the track the unexpected and the little differences that made tham more comfortable and improved performance.this is our legacy.this is what the brand stands for.this will never change�.
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ADIDAS AG
Type Founded
Public (AG, FWB: ADS) 1924 (Registered in 1949)
Founder(s) Headquarters
Adolf Dassler Herzogenaurach ,Germany.
Key people
Herbert Hainer (CEO), Erich Stammminger(CEO, Adidas brand).
IndusrtyClothing & consumer goods manufacturing. Products Footwear, accessories, sportswear, sports equipments. Revenue€ 10.799 billion (2008) Operating income
↑ € 1.070 billion (2008)
Profit
↑ € 642 million (2008)
Employees 38,980 (2008) Website
3
:
www.adidas-group.com
HISTORY
ADOLF (“ADI”) DASSLER started to produce his own sports shoes in his mother’s wash kitchen in HERZOGENAURACH, BAVARIA, after his return from world war 1.In 1924; his brother RUDOLF (“RUDI”) DASSLER joined the
business
which
became
GEBRUDER
DASSLER
SCHUHFABRIK(Dassler brothers shoe factory)and prospered. At the 1928 Olympics, Dasslerequipped several athletes, laying the foundation for the international expansion of the company. During the 1936 summer Olympics on BERLIN, Dassler equipped quadruple gold medal winner Jesse Owens of the USA with his shoes .Late in the world war2, the shoe factory shifted to production of the PANZERSCHRECK anti-tank weapon. The brothers split up in 1948 with RUDI forming PUMA, and ADI forming ADIDAS.The company formally registered as ADIDAS AG (with lower case lettering)on 18th August,1949.Thephrase” ALL DAY I DREAM ABOUT SPORTS”, although sometimes considered the origin of the Adidas name, was applied retroactively. The name actually a portmanteau from “ADI”(a nickname from Adolf) and “DAS” (from “Dassler”). ADIDAS IN INDIA Adidas first entered India in 1989, through a license agreement with BATA .Adidas later rentered India for the second time in 1996 through a joint venture with Magnum International Trading Company Ltd with an initial investment of $2.5 million to form Adidas (India) trading private limited Adidas holds a cent percent stake in the company. The company, which is known for football and running shoes, introduced its cricket gear in India in 2004.The company adheres to strict quality and design specifications and uses the manufacturing unit of Lakhani Footwear to manufacture the locally
4
produced Adidas range in India. Around 30-40% of the components are locally sourced. ADIDAS-the story of a logo.
The three stripes mark is without doubt the quintessential Adidas symbol. It was created by the Adidas company founder, AdiDassler ,and first used on footwear in1949.Dassler created a symbol that could be immediately recognized when his footwear was used in athletic competition and associated with Adidas.He emphasized the association with the slogan �The Brand With The 3 Stripes�. The 3-stripes were first used on apparel in 1967. The 3-stripes now enjoy worldwide recognition as an Adidas symbol.
In the late 60s Adidas expanded into the leisure and apparel sector and this promoted Kathe and AdiDassler to seek a new, additional identification mark for the Adidas brand. In August 1971, the Trefoil was born, out of more than
5
100 ideas. Inspired by the 3-stripes, it is a geometric execution with a triple intersection, symbolizing the diversity of the Adidas brand. This symbol was first used on Adidas product in 1972, and later became the company’s corporate symbol. Today it plays the important role of representing the Adidas Originals collection.
In 1997, Adidas decided to introduce an integrated corporate design, choosing as the core element a new and yet familiar logo: the 3 bars. It was designed in 1990 by the then Creative Director Peter Moore and initially used on the equipment range of performance products. It is inspired by the 3-stripes as they appear on footwear. The shape formed by the bars also represents a mountain, indicating the challenges to face and the goals to be achieved.
In August 1998, following the merger of Adidas and Salomon, the then named ADIDAS-SALOMON introduced a new corporate logo. The logo unites the value of the brands of the Group, incorporated the typical colour of the two previous groups: blue for Adidas and red for Salomon. The logo 6
shows three shapes coming together to form a large shape, namely a diamond. The space between the shapes forms another shape, that of a person with arms raised in victory and celebration. This logo appeared on all corporation document of the then named Adidas-Salomon AG, but not on the products.
In July2002 Adidas-Salomon AG presented a revolutionary new business strategy for the Adidas brand, aimed at expanding its customer base and driving top line growth. The new structure marked a fundamental shift from the traditional footwear and apparel structure ,introducing an new three divisional approach with the sports performance, sports heritage and sports division. The product in the Adidas sports performance division are developed for the sports performance market but have design appeal encouraging consumers to wear the product both on and off the court or playing field. The Adidas sports heritage division contains Adidas original products. Original products seek to extend the Adidas brand unique and authenticate to lifestyle market .Design and functionality are already strong aspect of two existing Adidas divisions and are continued with an even stronger focus in the new sport style division.
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1949
The foundation 18 August - adidas is registered as a company, named after its founder: 'Adi' from Adolf and 'Das' from Dassler.
50s
The 'Miracle of Bern' 1954 - The 'Miracle of Bern' Germany battle Hungary with a competitive advantage. They are wearing adidas soccer boots which for the first time feature removable studs.
60s
Higher Driven by a desire to help all athletes committed to performance, adidas manufactures equipment for what some consider "fringe sports". Unconventional high jumper Dick Fosbury launches himself up and over in adidas footwear.
70s The "adidas" team wins Crowning moment: Franz Beckenbauer, the "Kaiser", raising the World Cup in victory salute. Germany had just beaten Holland 2-1 in the 1974 final.
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80s
The transition After AdiDassler's death, Adi's wife Kathie, his son Horst, and his daughters carry on the business.
90s
With a new management Under the CEO Robert Louis-Dreyfus, adidas is moving from being a manufacturing and sales based company to a marketing company.
1995
adidas goes public Flotation of the company on the Frankfurt and Paris Stock Exchange.
1996
A splendid year The "three-stripes company" equips 6,000 Olympic athletes from 33 countries. adidas athletes win 220 medals, including 70 gold. Apparel sales increase 50%.
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1997
adidas-Salomon AG adidas AG acquires the Salomon Group with the brands Salomon, Taylor Made, Mavic and Bonfire in December 1997. The new company is named adidas-Salomon AG.
1999
The new brands The integration of the new brands is gaining momentum. The new Taylor Made Fire Sole clubs boost sales. Salomon in-line skates take off with high double-digit growth during the first half of 1999.
2000
New management Following personnel changes, the new management initiates an ambitious Growth and Efficiency Program. Major sports events such as the European Soccer Championship EURO 2000™ and the Olympic Summer Games, where swimmer Ian Thorpe takes three gold medals, contribute to the company’s success.
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2005
Sale of Salomon The Salomon Group (including Salomon, Mavic, Bonfire, Cliché and Arc’Teryx) is being sold to Amer Sports in October 2005. The new adidas Group is focusing even more on its core strength in the athletic footwear and apparel market as well as the growing golf category. The legal name of the company will change to “adidas AG” in May/June 2006.
2006
adidas-Salomon AG acquires Reebok The closing of the Reebok transaction on January 31, 2006 marks a new chapter in the history of the adidas Group. By combining two of the most respected and wellknown brands in the worldwide sporting goods industry, the new Group will benefit from a more competitive worldwide platform, well-defined and complementary brand identities, a wider range of products, and a stronger presence across teams, athletes, events and leagues.
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Vision and mission VISION "Impossible is Nothing" is the current mainstream marketing slogan for Adidas.
MISSION: Adidas-Salomon strives to be the global leader in the sporting goods industry with sports brands built on a passion for sports and a sporting lifestyle. We are consumer focused. That means we continuously improve the quality, look, feel and image of our products and our organizational structures to match and exceed consumer expectations and to provide them with the highest value. l improvements, will drive over-proportionate earnings growth. .
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Industry profile The sporting goods industry consists of three segments: Athletic footwear, Apparel and Equipment. Athletic footwear makes up 33% of the sporting goods industry, Apparel 50% and Equipment makes up the remaining market share. The three largest markets for athletic equipment are the US at 50% of the market share, Western Europe at 25% of the market share and Japan at 10% market share. An industry that had one primary market segment consisting of the serious male soccer and track athlete has now separated into several market segments containing the professional athlete, the amateur athlete, the fitness group (aerobics and cross-training) and the mass consumer who is not interested in athletics but enjoys the comfort of wearing athletic apparel.
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BOARD OF DIRECTORS Current executive board •
CEO Adidas-group: Herbert Hainer
•
Finance Adidas-group: Robin J. Stalker
•
CEO Adidas brand: Erich Stamminger
•
Global Operations Adidas-group: Glenn S. Bennett
Former management •
CEO (1993–2002): Robert Louis-Dreyfus.
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CHAPTER 2 PRODUCTS Running Adidas currently manufactures several running shoes, including the adiStar Control 5, the adiStar Ride (the replacement for the adiStar Cushion 6), the Supernova Sequence (the replacement for the Supernova Control 10), and the Supernova Cushion 7 (which will soon be replaced by the Supernova Glide), among others. In addition, their performance apparel is widely used by runners. Adidas also uses kangaroo leather to make their more expensive shoes. Association football One of the main focuses of Adidas is football kit and associated equipment. Adidas also provides apparel and equipment for all teams in Major League Soccer. Adidas remain a major company in the supply of team kits for international football teams. Current examples include Spain, Russia, France, Germany, Greece, Romania, Argentina, Mexico, South Africa, Japan and Nigeria. Adidas also makes referee kits that are used in international competition and by many countries and leagues in the world. In the United States, referees wear the Adidas kits in MLS matches even though the primary referee supplier is Official Sports. The company has been an innovator in the area of footwear for the sport with notable examples including development of the Copa Mondialmoulded boot used for matches on firm dry pitches for almost forty years. The studded equivalent was named World Cup follow in celebration of the 1978 tournament won by Argentina, one of the nations it supplied at the time. Some 15
of the famous football teams currently sponsored by Adidas include Real Madrid, Milan, Middlesbrough, Palmeiras, Chelsea, River Plate, Liverpool, Marseille, Universidad de Chile, Bayern Munich, Schalke 04, Benfica, Wolfsburg, Galatasaray, Panathinaikos, Derby County, Ajax and Lokomotiv Moscow among others.
Adidas became renowned for advancing the Predator boot design developed by ex-Liverpool and Australian international player Craig Johnston. This design featured a ribbed rubber structure for the upper leather of the shoe, used to accent the movement of the ball when struck; highly skilled players claimed they were able to curve the flight of the ball more easily when wearing this new contoured design. The Predator also features the Craig Johnston-invented Traxion sole
FIFA, the world governing body of football, commissioned specially designed footballs for use in its own World Cup tournaments to favour more attacking play. The balls supplied for the 2006 World Cup were particular noteworthy for their ability to travel further than previous types when struck, leading to longer range goal strikes that were intended to increase the number of goals scored. Goalkeepers were believed to be less comfortable with the design, claiming it would move significantly and unpredictably in flight.
Tennis Adidas has sponsored tennis players and recently introduced a new line of tennis racquets. While the Feather is made for the "regular player” and the Response for the "club player", Adidas targets the "tournament player" with the 12.2 oz Barricade tour model. Adidas sponsors the following professional players:
Jo-Wilfred
Tsonga,
DinaraSafina,
Ana
Ivanović,
Daniela
Hantuchová, Andy Murray, Fernando Verdasco, Gilles Simon, Marcos 16
Baghdatis, Fernando Gonzรกlez, Marat Safin, FlaviaPennetta and upcoming players like Melanie Oudin, SoranaCirstea and GrigorDimitrov. Adidas tennis apparel contains the ClimaCool technology found in other athletic jerseys and shoes. In Cincinnati, at the ATP Tennis Tournament in Mason, they have also sponsored the ball-boy and ball-girl uniforms.
olf In 1997, Adidas purchased TaylorMade. The image and focus of TaylorMade was redirected shortly after the acquisition to take over the driver market. The company succeeded in achieving this goal in late 2004 when it officially became the No. 1 driver in golf. On 14 October 2008, Adidas, through its subsidiary TaylorMade, acquired Ashworth for $72 million, assuming $46.3 million in debt.
Cricket In the 1990s, Adidas signed the world No. 1 batsman Sachin Tendulkar and made shoes for him. He is still wearing Adidas shoes when he plays matches. Adidas even made action figures after Sachin Tendulkar. In 2008, Adidas made their move into English cricket market by sponsoring English batting star Kevin Pietersen after the cancellation of his lifetime deal with Woodworm, when they ran into financial difficulties. The following year they signed up fellow England player Ian BellPakistan player Salman Butt and Indian Player RavindraJadeja. Having made cricket footware for many years, the company finally entered the field of bat manufacture in 2008 and their products are available in the Incurza, Pellara and Libro ranges
Adidas also manufactures the uniforms worn by both the England cricket team and the Australian cricket team. 17
In 2008 and 2009 in both the seasons of the Indian Premier League (IPL), it took up the sponsorship of the Mumbai Indians and the Delhi Daredevils. In 2009, Adidas signed Sachin Tendulkar and started sponsoring his bat. It created a new bat 'Adidas ST' for him and 'Adidas Pellara KP' for Kevin Pietersen, the same year. Now both of them use their personalized bats in cricket.
Basketball Adidas has been a longtime basketball shoe manufacturer and is one of the leading basketball brands in the world. They are most famous for their iconic Superstar and Pro Model shoes, affectionately known as "shelltoes" for their stylized hard rubber toe box. These were made very popular in the 1980s hip hop streetwear scene alongside Adidas' stripe-sided polyester suits.
Adidas is also the current outfitter of all 30 franchises in the National Basketball Association (replacing the Reebok brand after the merger) and sponsors numerous players past and present like Kareem Abdul-Jabbar and Tracy McGrady, as well as Dwight Howard, Chauncey Billups, Derrick Rose, Kevin Garnett, Michael Beasley, Josh Smith, Tim Duncan, and Candace Parker. Lacrosse In 2007, Adidas announced the future production of lacrosse equipment, and will sponsor the Adidas National Lacrosse Classic in July 2008 for the top 600 high school underclassmen lacrosse players in the United States. Rugby Adidas make rugby balls and other rugby gear. They are the current kit and 18
ball supplier to the New ZealandAll Blacks, IrishMunster Rugby, and the Argentinian Pumas, among others.
Gymnastics Since 2000, adidas has provided men's and women's gymnastics wear for Team USA, through USA Gymnastics. In 2006, adidas gymnastics leatards for women and adidasmens comp shirts, gymnastics pants and gymnastics shorts have been available in the USA, with seasonal leotards offered for Spring, Summer, Fall and Holidays. Starting in 2009, adidas gymnastics wear has been available worldwide through GK Elite Sportswear.
Skateboarding Adidas SB (Skateboarding) are shoes made specifically for skateboarding. Many of the shoes Adidas previously made were redesigned for skateboarding.
Adidas Skateboarding also has a skateboarding team. The team consists of: Mark Gonzales, Dennis Busenitz, Tim O'Connor, Silas Baxter-Neal, Pete Eldridge, Dave Bachinsky, Benny Fairfax, Nester Judkins, LemVillemin, and Vince Del Valle. RECENTLY LAUNCHED PRODUCTS
The adidas-1 can sense if your cushioning needs change!!! Ever heard of a shoe that “comes to life”? Until 2005, neither had anyone else. With the introduction of the adidas_1, adidas took sport electronics and personalisation to a new level. The first intelligent shoe not only senses every step you take, but understands that your cushioning needs
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change with faster or slower speed and the different surfaces of the ground - and adapts the cushioning respectively. Wh of your life.at’s in it for you? The most personalised run
Adidas and Disney produce a range of kids wear featuring Mickey mouse and
friends
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n December 2009, adidas and Disney announce an all-new product line for infants and children, combining adidas Kids top performance products with classic Disney characters Mickey Mouse and friends
Minnie
Mouse,
Goofy,
Donald
Duck
and
Daisy
Duck.
The sporty and fashionable collection consisting of footwear, apparel and accessories combines a touch of Disney magic with traditional adidas apparel silhouettes: pocket details and rubber Mickey Mouse badges are featured on tee shirts and pants, while hoodies are complemented by iconic Mickey Mouse shaped zippers. Boys’ tees and shirts show an animated image of Mickey
Mouse.
Minnie Mouse is the key character on the girls’ apparel, with her lady-like image featured on tees and caps. Feminine accessories complete the outfits: matching trolley bags for apparel and footwear, caps with recurring graphics of
Mickey
Mouse
or
Minnie
Mouse
and
cozy
cotton
socks.
Adidas equips over 1,000 athletes for the Vancouver 2010 Winter Olympic
Games
A 20
s of February 12th, 2010, the winter sports world looks to Vancouver where the 21st Olympic Winter Games are taking place. For two weeks, athletes from more than 80 nations are
fighting for gold, silver and bronze and the brands of the adidas Group are in the
middle
of
it
all.
Equipping over 1,000 athletes from 16 federations in the sports of biathlon, cross-country skiing, bobsleigh, skeleton, luge, Nordic combined and ski jumping, adidas is also providing the presentation wear for six National Olympic Committees (NCOs). Reebok and CCM Hockey are sending some of their best ice hockey players to Vancouver.
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Adidas renews the cooperation with Reinhold Messner. n May 2009, adidas and Reinhold Messner renewed their partnership and launched a new product concept: SUPERTREKKING. adidas cooperated with Reinhold Messner back in 1978, developing the
SUPERTREKKING LTD. This shoe accompanied Reinhold Messner on his expedition when he was the first man to ascend Mount Everest without supplemental oxygen. The trekking shoe which Messner wore until he reached base camp became a bestseller and legend in the outdoor scene. Around 30 years later, adidas is now presenting a new edition of the successful shoe and is transferring the philosophy behind this development also to apparel and backpacks - lightweight, reduced, and functional.
JABULANI means "to celebrate" in is Zulu
A
leading football producer. Still, it took adidas well over three years of extensive research and development to present the adidas JABULANI, its best performing ball ever. The didas has been
producing high-performance match balls since 1963 and is the world’s newly developed “Grip’n’Groove” profile provides the best players in the world with a ball allowing an exceptionally stable flight and perfect grip under all conditions. Comprising only eight, completely new, thermally bonded 3-D panels, which for the first time are spherically moulded, the ball is perfectly 21
round
and
even
more
accurate
than
ever
before.
Match Ball for the 2010 FIFA World Cup South Africa
F
irst under the toughest laboratory conditions possible, later also with professional players and clubs on the field of play. Scientific tests were conducted together with the Sports Technology Research
Group of the University of Loughborough in England, one of the leading institutions
of
its
kind
worldwide.
The name ”JABULANI” originates from the Bantu language isiZulu, one of the eleven official languages of the Republic of South Africa, which is spoken by almost 25% of the population. Literally translated, “JABULANI” means “to celebrate”. Football is a passion that unites the world. The name of the new match ball appropriately pays tribute to the passionate football celebration international fans will enjoy in South Africa next summer
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Every team needs L'Albiceleste. nspired by Argentina's proud football history and cultural heritage, the team's home kit for the 2010 FIFA World Cup™ celebrates the country's World Cup success in 1986.
The 2010 jersey design is made from a special mesh material that appears similar to the shirt fabric from 1986, although engineered for better air circulation and moisture management. The distinctive blue and white colors on both sides of the home jersey representing the country's flag colors, in addition to a re-introduction of the crest used in 1986, will stir the emotions of 22
players and fans.
Argentina's national emblem, the "Sun of May" symbol is displayed proudly on the back collar.
Argentina's jersey is more than just a shirt - it is a symbol of national honor to unite behind and to be worn proudly by all Argentinean supporters and fans in the making of history. Every team needs L'Albiceleste (white and blue sky after the colors of the Argentinean shirt and national flag).
I
The Huber Brothers did Antarctica in adidas Outdoor. n October 2009, adidas athletes Alexander and Thomas Huber managed the first RP (red point) ascent of the »Eternal Flame« route. This route runs with an impressive line through the South Buttress of Nameless
Tower (6,251m) amidst the GraniteMountains of the Trango Group in the Karakoram. Thomas and Alexander Huber were so fortunate to have both perfect conditions on the wall as well as a perfectly timed patch of good weather, which enabled them to make the first free ascent. After they had investigated the first four pitches of the route and discovered a variation to the second pitch's pendulum, the Huber brothers had to wait a few days for better weather conditions. Within four days they managed to red point the 24 pitches back to back - with difficulties up to 5.13a at an altitude of 6,000 meters. It wasn’t the first excursion the Huber Brothers successfully completed in adidas gear. In December 2008, the Huber Brothers put the adidas Outdoor 23
products to the ultimate test when they went on an expedition to Antarctica. Even though temperatures dropped below -50 degrees Celsius during the trip, the Huber Brothers were in good hands: The lightweight, breathable adidas Outdoor product offers superior water repellency, so the body remains dry, warm and comfortable even under the most extreme conditions.
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Lionel Messi has the spark. n May 2009 Lionel Messi presents the new F50i football boot. Pioneering technologies and outstanding design make for the perfect football boot for players who can decide a game with their brilliance and
inspire their teammates.
The F50i is the first football boot with a single-layer upper, the new SprintSkin. The SprintSkin envelops the player’s foot like a second skin. The synthetic material is both supple and water-repellent and always provides a perfect fit. The single-layer SprintSkin further reduces the weight of the boot without compromising on the stability that is so crucial for the footballer.
In the corresponding TV campaign, Lionel Messi becomes ‘The Spark’, representing the F50i boot and ‘lightning quick, game changing’ player type
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MARKETING STRATEGY
Adidas intent could be viewed as the number one global supplier of fashionable top quality fitness footwear, textiles, and sports cleats. With this intent, Adidas should have a mission to make, distribute and sell the finest quality sporting goods that improves the potential of all the world’s athletes. 1.
Become the industry – leading marketer og sporting goods. strategy
Adidas is being torn apart in marketing by Reebok and Nike. In order for Adidas to regain the lead in the sporting goods business a new marketing strategy should be developed. Adidas should create an independent brand name for a fitness line of shoe that appeals to both males and females. Adidas have some of the top U.S and European fitness instructors, trainers, super models and actors and actresses endorse the product. Adidas should forget about the American football, baseball, and basketball markets. Let Nike and Reebok fight over this territory.
2.
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Have the most efficient production cycle in the industry. strategy
Reduce sourcing and production lead times to four months. Start by outsourcing all production to independent manufacturers. Get rid of all production in Europe and send to Asia, where costs are lower. For U.S market, outsource production to U.S based facilities or to South American facilities and sell directly to retailers in the U.S. instead of subsidiaries. 3.
Leda in the industry in product innovation. strategy
Restructure the company’s management. With the current top down bureaucratic management structure, Adidas will never become a leading innovator. Adidas is trying to compete in two different markets- the European market and the American market. Each market should have its own executive with his or her own marketing/ R&D, Sourcing, Logistics, Finance and Human Resources department and representives from each of the countries in the two hemispheres should report to their respective executives. The U.S. department should be based in the U.S. and should have individuals in charge of each division that understand the U.S. market.
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27
ADIDAS STRATEGY
Adidas’ mission is to be the leading sports brand in the world. One major lever to achieve this is the brand’s broad and unique product portfolio spanning from apparel and footwear for professional athletes to premium fashion. It allows adidas to address multiple consumer needs, exploit market opportunities from various angles as well as be less affected by onedimensional market risks. adidas’ commitment to product innovation and its rich heritage differentiates the brand from competitors and provides a solid platform for future growth.
Adidas Sport Performance: divisional overview No other brand has a more distinguished history or stronger connection with sport than adidas; not only where the best meet the very best, like at the FIFA World Cup™ or the NBA All-Star Weekend, but everywhere around the globe where sports are played, watched, enjoyed and celebrated. Everything at adidas reflects the spirit of its founder AdiDassler. That means adidas intends to inspire, support and equip all athletes in the best possible way to help them achieve their optimal performance.
A perfect example of adidas’ commitment to innovation and getting closer to the consumer is adidas’ miCoach, which combines state-of-the-art training knowledge with a personalised web service and real-time audio coaching via a media player, helping consumers achieve their “impossible” by encouragement and tailoring the training to their personal goals.
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GROUP STRATEGY Our goal as a group is to lead the sporting goods industry with brands built on a passion for sports and a sporting lifestyle. We continuously strive to generate consumer excitement and enhance brand profitability by executing a clear strategy. In everything we do, we are focused on strengthening and developing our brands to maximize the Group’s operational and financial performance and create shareholder value. 1.
Performance as core Group value.
2.
Leveraging opportunities across our brand portfolio.
3.
Leading position in markets worldwide.
4.
Customizing distribution.
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4’PS OF MARKET MARKETING MIX PRODUCTS Men Product
: Footwear, Clothing and Accessories.
Foot Wear
: This segment consist of (1) Performance & (2) Originals
There are many varieties in this segment such as Football, Running, Training, Tennis, Basketball, Indoor, Outdoor, Swimming etc. There are many varieties in the Football section: 1.
Soft Ground
2.
Hard Ground
3.
Firm Ground
4.
Turf Rugby
5.
Astroturf
6.
Leisure wear
7.
Asphalt
8.
Multi Surface
9.
Rugby
Collection: Adipore, Classics, Clubs, F50, Predator Adidas Clothing (product): Jackets, Jerseys, Scarves, pants & Tights, Shirts, Shorts Sweatshirts, Tracksuits, Tops, Pants, Swimwear
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Men Accessories: Bags Eye Wear, watches Hardware Waterbottles, Yoga, Mats, Fitness (Gripper) Spiking Football Pump, Wrist Band, Padding, Football, Basketball Woman Product: Footwear, Clothing, Accessories, Football, Running, Training, Tennis, Indoor, Outdoor, Swimming. Clothing: Jackets, Jerseys, Scarves, Pants & Tights, Shirts, Shorts, Sweatshirts, Tracksuits, Tops, Pants, Swimwear, Underwear, Skirts, Dresses. Woman Accessories: Bags, Eyewear, Watches, Hardware, Hats, Socks. PRICING (GLOBAL): Price Range:
Men Shoes: $55 to $350. Sandals: $15 to $40. Woman Shoes: $45 to $240. Sandals: $20 to $ 35.
They don’t follow any type of pricing strategy. It depends on the version of the products. For Ex: one version of a shoe is launched at Rs 5000.00 and after two months a new version of technology is launched with some added features then the price will go up. Suppose the raw materials of the product used decreases then automatically the prices will also decrease. Discounts are given two times in a year during January and July.
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PLACE: Major retail outlets in India: Agra, Ahmedabad, Aizwal, Ajmer, Allahabad, Alwar, ambala, Amritsar, Aurangabad, Azamgarh, Baddi, Bangalore, Bhatindia, Bareilly, Bhopal, Bhubaneshwar, Bikaner, Bilaspur, Chandigarh, Chennai, Coimbatore, Cuttack, Darjeeling, Dehradun, Dhanbad, Dimapur, Firidabad, Ganganagar, Gantok, Ghaziabad, Gorakhpur, Gurgaon, Guwahati, Haridwar, Hissar, Hydrabad, Indore, Imphal, Itanagar, Jabalpur, Jaipur, Jallandhar, Jammu, Jodhpur, Jorhat, Kanpur, Kolkata, Kota, Kullul, Lukhnow, Ludhiana, Manglore, Meerut, Monga, Mohali, Mumbai, Moradabad, Mussoorie, Mysore, Nagpur, Nashik, Newdelhi, Noida, Palampur, Panchkula, Panipat, Panjim, Pathankot, Patiala, Patna, Pondicherry, Pune, Rajkot, Raipur, Ranchi, Rothak, Rourkela, Secunderabad, Shillong, Shimla, Siliguri, Surat, Udaipur, Varanashi, Vijayawada, Vizag.
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PROMOTION: ADIDAS promotes its products through Television advertisement, mobile marketing, through various sponsorship in sports events, websites, tie up with various football clubs and international teams. Brand ambassador of ADIDAS India is Sachin Tendulkar and SaniaMirza. Promotion partnership: 1.
IHF Men’s World Championship, Croatia January 16 – February 1,
2009 2.
Adidas Official Partner of International Handball Federation NHL All- Star Game, Montreal/ Quebec, Canada January 25, 2009
3.
Reebok- CCM Hockey Exclusive Licensee of National Hockey League NFL Super Bowl, Tampa/ Florida, USA February 1, 2009
4.
Reebok Official Outfitter of National Football League NBA All Star Game, Phonix/ Arizona, USA February 15, 2009
5.
Adidas Official Outfitter of National Basketball Association Boston Marathon, Boston / Massachusetts, USA April 20, 2009
6.
Adidas Official Apparel and Footwear Outfitter Flora London Marathon, London, UK April 26, 2009
7.
Adidas Official Sponsor French Open, Paris, France May 24 – June 7, 2009
8.
Adidas Official Partner of Roland Garros UEFA Champions League Final, Rome, Italy May 27, 2009
9.
Adidas Official Ball Supplier of Australia and England cricket teams FIFA Confederations Cup, South Africa June 14 – 28, 2009
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10.
Adidas Official Partner of Federation International de Football Association MLB All Star Game, St.Louis/Missouri, USA July 14, 2009
11.
Adidas Official Sponsor of International Association of Athletics Federations real, Berlin Marathon, Berlin Germany September 20. 2009 Adidas Official Partner.
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DISTRIBUTION CHANNEL OF ADIDAS
Malaysia, Thailand, China, Jaipur, Hongkong, Bangalore, Poland, Lakhani Manufacturing unit
Plot No. 93, Sector32 Institutional Area Gurgaon, Haryana 122001
Store 1
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Store 2
Store 3 Store 3
Store 3
Market Segments: High quality products targeted at teens and young adults. Dominates American basketball, football, and baseball segments.Very successful with woman market segment.Known as a producer of fitness footwear.Trying to capture more Nike’s Sports segment. Middle ages men’s brand. Leader in soccer market segment. R&D done by coaches, athletes, and trainers. Have Air Sole Technology developed by NASA engineer. Pump
andHexalite Technology. Torsion
Technology. The market and sales department contains the R&D department COMPETITORS •
Nike challenges Adidas in home market
•
Adidas Acquires Reebok to challenge Nike
•
Competitors
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–
Nike
–
Puma
–
Others •
Amar Sport
•
Rossignol
CHAPTER 3 SWOT Analysis: Adidas Strength Adidas biggest are its long history in the sporting goods business, presences in Europe, lead in the sales of Soccer and Track and Field Sports Equipment, and German heritage. Adidas should use its legacy created in the sporting goods industry in advertising campaigns as well as its German heritage. Adidas greater understanding of European culture should give it an advantage in terms of marketing in Europe. Women in Soccer and the growth of popularity of soccer , track and field, and the fact that Germans are renowned for their engineering capabilities as an entry point to gaining market share in the U.S. •
Global organization, with a strong international position in 170 countries
worldwide. •
High financial strength (1997, sales turnover, £131,511 million), sales growth of
29.3%. •
Strong brand image based on quality, environmental friendly (greener),
customized range. •
Industry leader in manufacturing and production. Maximizes profit through
efficient lean manufacturing approaches (e.g. Total Quality Management) and JIT (Just in Time) manufacturing and first mover in car research and development. •
Excellent penetration in key markets (US, China, rd.
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Adidas weakness hugecolourful billboards with logos such as ‘Just Do It’ and prime time advertisement f Michael Jordan slamming a basketball in pairs of Nike shoes. Trimming up Adidas’s overhead costs will free up cash for additional marketing resources and schemes. Adidas has long lead times on its products and the delivery of its products is not reliable. The result of these types of problems Adidas overhead is 13% higher in terms of percentage of revenues than Reebok and 17% higher than Nike’s. This increased overhead is not a result of an excessive advertising budget, since only 6% of Adidas sales goes towards advertising and 10% of Nike’s sales goes towards marketing. The biggest opportunity that Adidas has is to reduce overhead by recognising its management structure and reducing the price that Adidas pays in leases and rent by divesting its in-house production facilities. Adidas’s marketing department has become complacent over the years. Their promotional style of advertising does not work. When going to a professional sporting event, people do not see the tiny marks on the athletes’ shoes from the upper decks. Instead, they do see in its supply chain is a lack of inventory control and the reason why Adidas has poor control over its inventory and lead the industry in clearance sales at 30% of production. The distribution information provided in the case writing is not easy to understand. It does appear from the information given that Adidas’s attempt to sell in the U.S through subsidiaries places it at a cost disadvantage, since Nike sells directly to distributors.
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Adidas Opportunities Reebok has plans to go head-to-head with Nike for the lead in the professional sporting goods footwear market segment. Adidas has the opportunity to steal Reebok’s market share in the men and women’s fitness shoe segment – the largest overall segment-ahile Reebok focuses its resources on the other areas of the market. Footwear and textiles for fitness activities is by far the largest growing and the biggest segment of the sporting goods industry. Adidas currently has no brand or group of products to compete specifically in this market segment. Adidas has the opportunity, while Nike and Reebok battle over the professional athlete and younger customer market segment, to cash in on the fitness and fashion conscious market segment. Adidas currently has a large percentage of sales in athletic apparel. While Nike and Reebok battle it out over footwear, Adidas could use resources to gain more market share in the apparel market. Macro- and Socioeconomic Opportunities • Macro-Environment
and
Fiscal
Policy
Changes
Interest rate changes, tax reforms and currency exchange rate developments regularly provide opportunities for optimization. Our central Group Treasury and Tax departments constantly monitor these developments to identify potential opportunities to reduce our non-operating expenses. • Emerging Markets • Economies that are small, but that have the potential for growth in size and importance in coming years. For the Adidas Group, emerging markets are the developing countries of Asia, Eastern Europe, Latin America and Africa. • Increasing Sports Participation Rates in Mature Markets • Fast-Growing Women’s Segment
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• Increasing Focus on Kids • Building Market Share in High-Growth Sports Categories • Technology to Drive Growth of Customized Products • Connection to the Consumer at Point-of-Sale • Cost Optimization To Improve Profitability
Adidas Threats Exchange rates are a big threat. During the 1992 environment presented in the case, exchange rats were favourable for Adidas. Foreign goods were more expensive than Germany’s own goods. As a result, Germany was more likely to export goods than import. This would include shoes and favour Adidas in terms of maintaining share lead in Germany. The threat always exists for this scenario to change, making U.S. goods more appealing to Germany’s citizens. Perhaps the advantage to Adidas in terms of exchange rates is the only thing supporting its lead in the European markets.
Adidas does contain the market share lead in sales of cleated shoes for soccer and track and field type events and overall market share of sporting goods sold in Germany. As Nike and Reebok continue to dominate other market segments, popularity of their brands in the cleated shoe line and in Europe could grow, eroding away at Adidas’s last footholds in the sporting goods industry.
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•
Saturation and increased competition, intense marketing campaigns increasing
competitive pressures. •
Shifts in the exchange rates affecting profits and cost of raw materials.
•
Predictions of a downturn in the economy e.g. recession, will affect purchases .As
household budgets is in control this could lead a decline in new sales and possible rationalization of dealerships.
Adidas (overview) Strengths
Weaknesses
-Strong success in Europe
-American
-High-performance
endorsed by Adidas are
products
not as
-Recent
selling
of
subsidiary “dog” Salomon
athletes
popular as Nike’s -it is gaining ground on European soccer market -Public dissent over use
Opportunities
of sweatshops Threats
-Acquisition
-Foreign exchange rates
-Growing strength in golf
will result in loss of
industry through Tailor-
actual profits
Made and recent acquisition of Max fly -Growing revenue from opening of own retail stores
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\\
CHAPTER 4 CONCLUSION The project titled as “ADIDAS� enabled to understand the competition among the various other brand companies which have entered Indian market of retail after 2000 .ADIDAS is one of the companies in the private sector which are doing exceptionally good in this sector due to their apparels to which people find very attracting according to their needs. The reasons for this are many like it is a company with very strong brand names: ADIDAS is the no. 1 retail Manufacturer in India also largest retail unit in the world. And is the largest industry in India, with an employment of around 8% and contributing to over 10% of the country's GDP. Retail industry in India is expected to rise 25% yearly being driven by strong income growth, changing lifestyles, and favorable demographic patterns. ADIDAS is expanding itself most aggressively, as a result a great demand for real estate is being created. ADIDAS retailers preferred means of expansion is to expand to other regions and to increase the number of their outlets in a city. It is expected that by 2010, India may have 600 new shopping centers.
CHAPTER 5 42
SUGGESTIONS AND RECOMMENDATION ADIDAS, in the present scenario is growing at an aggressive pace. The company does a lot of survey & analysis in the market to discover customer’s needs & expectations & tries to improvise on its existing market linked plans along with RETAIL policies. In addition to this , the company from time to time keeps on introducing various new SCHEMES to cater peoples’ interests. This has enabled Adidas to become market leader in the sector of footwear’s and clothes . New type of apparels are being produced continuosly as per the requirements of its customers. New discount and exchange offers are introduced frrequently to cater to its existing customers.
BIBLIOGRAPHY
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JOURNALS • ADIDAS VERTICAL
OTHER WEBSITES www.scribd.com www.adidas.com www.adidas-group.com
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