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What enabled Adidas to be the Market Leader in the past

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What enabled Adidas to be the Market Leader in the past Powered By Docstoc
					How has Adidas evolved since it was
            founded?
            Timeline of Adidas
            •   Fouded 1920 by Adi Dassler – wanted to design shoes for athletes in
                soccer, T&F, & tennis.
1920-1925
            •   The Dassler brothers (Rudi & Adi) made their first major innovation in
                athletic shoes, integrating studs & spikes in track & field shoes.

            •   Innovators in Marketing – gave away shoes to German athletes
                competing in Olympic games. By 1936 most athletes would compete
1928-1936       only in Dassler shoes.



            •   Bitter family feud, company dissolved. Rudi established Puma. With
                his departure Adi renamed company Adidas & registered the
1948-1949       trademark 3rd strip to Adidas shoes.



            •   Adi expanded spikes concept in track shoes to soccer shoes. Partial
                credit was given to the soccer shoes for Germany’s World Cup
  1954          Championship that year.
                Timeline of Adidas
            •    Adidas is the clear favorite among athletes – 75% of T&F
                 athletes wear them in Olympics. ’63 started producing soccer
1960-1967
                 balls, ’67 athletic apparel

            •    Adidas became leader in consumer jogging shoes in the US. T-
                 shirts and apparel bearing the 3 stripes became popular
 1970’s          among teens.



            •    Adi Dassler dies, Adidas remains worldwide leader in athletic
                 footwear but they are losing market share fast to Nike in US.
  1978
                 Market share loss continues through the 80’s and mid 90’s.

            •    Through cost cutting, new model launches, and endorsement
                 contracts with popular athletes Adidas increased sales by 75%
  1994           over prior year in US. Becoming 3rd largest athletic footware
                 company in US – trailing only Nike and Reebok.
            Timeline of Adidas
            •   Acquisition of Salomon SA – diversified beyond shoes &
                apperal to ski, golf, bicycle, & winter sports.
  1998


            •   Stock price takes a hit possibly due to Salomon acquisition.
                Adidas mgt divested all of Salomon’s winter sports & bicycle
1998-2005       equipment.



            •   Acquistion of Reebok, included Rockport footware, Greg
  2006          Norman apparel, & CCM hockey equipment.
What enabled Adidas to be the
 Market Leader in the past?
Product
Innovation
                              Track and Field       Soccer          Results

Analysis – Adidas was an      • 1925:studs      • 1954 –         • Over 700
early entrant into athletic     and spikes        screw in         patents
shoe industry. They           • Arch              spikes         • Strong
developed many of the           support         • 1963- Began      reputation
                              • 1949 –            producing        among top
features still present in                         soccer balls     athletes
                                molded
shoes today.                    rubber          • 1967 –         • 1970 –
                                cleats            athletic         leading
                              • 1952 -            apparel          brand in
Created a strong brand                                             consumer
                                screw in
based on high quality,          spikes                             jogging
innovative products that                                           shoes
top athletes choose to use
in training and
competition.
Marketing
Innovation

•Developed strong following with
top track and field athletes.                          Gave shoes to
                                                          German
                                                      athletes in 1928
•Applied this same model years                           Olympics
later with soccer shoes and
apparel.
                                                      75% of track and
•Successful because adidas was                          field athletes
                                                      wearing adidas in
creating innovative, high quality                      1960 Olympics
products.

     •Product innovation enabled                                          78% of athletes
     marketing innovation.           2 stripe (and
                                                                          wearing adidas
                                    later 3 stripe)
                                                                             at 1972
                                         brand
                                                                            Olympics
     •Different than Nike –
     marketing is what set them
     apart from the start.
Has Adidas positioned itself well
    in developing markets?
Adidas is a global player
•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
    Net Sales in Emerging Markets




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.
      Regional Footwear/Apparel Markets
  Region         Size          Market       Adidas Sales Adidas Sales    Adidas
                               Growth                      Growth       Position
                                Rate
   North     $42.5 billion       3%         $2.9 billion      5%        #2 behind
  America                                                                  Nike
  Europe         N/A          2% (20%       $4.3 billion   8%, mainly      #1
                              Eastern                       in Russia
                              Europe)
   Asia       3.2 billion    13% (South     $2.2 billion      17%          #1
               people        and Central)
                             15% (China)
   Latin         N/A             N/A        $657 million      39%       #2 behind
  America                                                                  Nike

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.
Has the Acquisitions helped position
  Adidas against its competitors?
          Salomon Acquisition: Was it
                 Successful?
Product Line Before                   Product Line After
Athletic Shoes                        Athletic Shoes
Athletic Apparel                      Athletic Apparel
                                      Ski Equipment
                                      Golf Clubs
                                      Bicycle equipment
                                      Winter Sports Apparel

 •Analysis:Paid 1.5bn to diversify product line. Surpassed Reebok world’s
 2nd largest sporting goods company, however…
             Adidas’s Stock Price




•Stock price fell soon after acquisition in 1998, Salomon divested
except for Taylor-Made Golf line. Adidas overpaid for acquisition.
  Adidas after Salomon was divested
Product Line         Product Line               Product Line
Before               After                      After Divestiture
Athletic Shoes       Athletic Shoes             Athletic Shoes
Athletic Apparel     Athletic Apparel           Athletic Apparel
                     Ski Equipment              Golf Clubs*
                     Golf Clubs
                     Bicycle
                     equipment
                     Winter Sports
                     Apparel
             •Only added Golf Clubs to product line

				
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posted:11/9/2011
language:English
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