BRAND DESCRIPTION.

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. The company
revenue for 2008 was listed at € 10.7999 billion and the 2007 figure was listed at
€10.299billion, or about US$15.6 billion.

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 .

(www.sportsline.com)
 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.FOR ADI,THE ATHELETE 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”.(WWW.ADIDAS.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, Dassler equipped 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.The phrase” 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 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, Adi Dassler ,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 Adi Dassler to seek a new, additional identification mark for
the Adidas brand. In August 1971, the Trefoil was born, out of more than 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 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.
 ADIDAS AG

Type Public (AG, FWB: ADS)

Founded 1924 (Registered in 1949)

Founder(s) Adolf Dassler

Headquarters Herzogenaurach ,Germany.

Key people Herbert Hainer (CEO), Erich Stammminger (CEO, Adidas brand).

Indusrty Clothing & 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 : www.adidas-group.com
 Corporate Mission Statement

The Adidas Group strives to be global leader in the sporting goods industry
with sports brands built on a passion for sports and a sporting lifestyle.

We are dedicated to We are committed to

consistently delivering continuously
outstanding financial strengthening our brands
results. and products to improve
our competitive position.

We are innovation and We are global

design leaders who seek organization that is
to help athletes of all socially and
skill levels achieve peak environmentally
performance with every responsible, creative and
product we bring to financially rewarding for
market. our employees and
shareholders.

We are consumer focused and therefore 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.

Adidas
72% group sales
Sport Performance
(80% of adidas sales)
The guiding principle of the
adidas Sport Performance
Division is to equip all athletes
to achieve their “impossible”.
Adidas Sport Performance
brings its passion for great
products to athletes in all sports
and mainly focuses on four key
categories globally: football,
running, training and basketball.
Sport Style
(20% of adidas sales)
The Sports Style Division is the
home of Originals defined as
authentic sportswear, the
Fashion Group, which is the
future of sportswear, and Style
Essentials, the fresh sport
inspired label made accessible
for style adopting youth.
Together they offer consumers
products from street fashion to
high fashion, all uniquely
inspired and linked to sport.
ADIDAS GROUP
Reebok
20% group sales
Reebok
(80% of Reebok sales)
Inspired by its roots in sports and
women’s fitness, Reebok is
global brand that is committed to
developing innovative products
which will allow Reebok to own
Women’s Fitness, challenge the
Men’s sport category and revive
its Classics heritage.
Reebok – CCM Hockey
(9% of Reebok sales)
Reebok – CCM Hockey is one of
the world’s largest designers,
manufacturers and marketers of
hockey equipment and apparel
with two of the world’s most
recognized hockey brand names:
Reebok Hockey and CCM
Hockey.
Rockport
(11% of Reebok sales)
Building on nearly four decades
of engineering expertise and a
commitment to innovation,
Rockport designs and markets
dress, casual and outdoor
footwear as well as apparel and
accessories that fuse dynamic
technology and modern style.
Taylor Made
8% group sales
Taylor Made
(70% of Taylor Made adidas
golf sales)
Taylor Made is a leader in the
industry and the number one
metal wood supplier. It focuses
on consumers who seek the
most innovative, performance-
enhancing golf equipment
available, including
technologically superior drivers,
fairway woods, irons, putters
and balls.
Adidas Golf
(30% of Taylor Made adidas
golf sales)
Adidas Golf targets active,
serious, athletic-minded golfers
who understand that the right
technologies can dramatically
improve the performance of golf
footwear and apparel.
Ashworth
(Acquired in November 2008)
Ashworth is a leading designer
of men’s and women’s golf-
inspired lifestyle sportswear
distributed internationally in
golf pro shops and reports as
well as upscale department and
specialty stores.
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.

Industry

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.
EXTERNAL MARKETING MIX

Several general trends are emerging that are reshaping the playing field in the
sporting goods industry. The demographics of the industry are changing. Until the
late 80s the demographics of the sporting goods industry consisted largely of
males. The study suggests that the early 90s have shown trends of considerable
growth in the female population in terms of interest in sports and sporting goods,
but no empirical data was presented in the case writing to support this statement.

American and European cultures have seen the rise of the fast food industry and
fast lifestyle, creating a need for fitness activity to relieve stress and stay healthy.
This fitness trend has increased popularity of activities such as walking, hiking,
and jogging and aerobics that are for average people with a desire to exercise and
have fun. These leisure fitness activities made up the largest portion of the sporting
goods industry with 55% of the athlete shoe market in 1992. In contrast, a 4%
market share existed in 1992 for sports like soccer, which require the
cleated/studded type shoe. The cleated shoe gave Adidas its initial foundation and
leadership position, but the cleated shoe is not the key to being competitive in
Adidas’s current environment. A trend of wearing sports apparel, both footwear
and textiles, for everyday leisure types of activities was emerging in the early
1990s. This trend was primarily seen in the 25 and underage group.

Adidas is a German based company with its largest market share in Europe,
therefore the exchange rates between Germany and the US should also be
considered in the analysis of the external environment facing the company. The
exchange rates of Adidas were favorable. US goods were expensive to German
consumers, which probably encouraged many German citizens to seek Adidas
products versus US products that were more expensive. Likewise German goods
were cheaper for US customers, which should have stimulated the export market in
favor of Germany and Adidas.

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

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.

Pricing at Bhubaneswar store (In Rs):

1. T- Shirts 349-2700

2. Track pants 999-1399

3. Jersey 699-1099

4. Bags 949-3499

5. Undergarments for jogging 629-899

6. Water bottle 599-699

7. Fitness (Gripper) 799.00

8. Spiking jumper 499.00

9. Yoga Mat 1990.00

10. Socks 3 Pair 399- 599

11. Head Bands 129 per pc

12. Wrist Band 279 per pc

13. Football Pump 399 per pc

14. Cap 400-700

15. Basket Ball 999-3000

16. Foot Ball 1199-1899

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.

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.

BHUBANESHWAR:

The ADIDAS outlets are mainly located in the posh area. In Bhubaneshwar
ADIDAS is located in two major locations namely Janpath & Pal Heights. The
outlet here in Janpath is opened after 3 years of research. The outlet is well
connected with the railway station and airport. The outlet in Pal Heights is there
because it is a posh area and surrounded by IT Park, XIMB, Ginger, and Fortune
Tower. The location in Janpath also attracts the foreigner as this is the way to Puri.

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 Sania Mirza.

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

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.

ADVERTISEMENT ANALYSIS:
The ADIDAS India advertisement is featuring Sachin Tendulkar. Sachin Tendulkar
is a sports icon famous all around the world. There is an emotional attachment of
Indians towards Sachin Tendulkar and Cricket.

Michael Porters five forces model with respect to ADIDAS:

Barriers to Entry:

The footwear-manufacturing segment has the highest barriers to entry out of the
three sporting goods industry segments. in the U.S. 53%of the footwear market
share is controlled by two companies- Nike and Reebok. Adidas came in at 7th
place with only 4 % of U.S. market share. The competition in the industry is fierce,
requiring a substantial investment in marketing to establish a successful brand.
Research and development expenses are high requiring a substantial investment to
develop a shoe that could provide the necessary level of comfort to complete with
companies like Nike and Reebok.

Threat of Substitute:

For athletic and fitness activities, few substitute exists for athletic footwear.
Substitutes do exist for athletic footwear and apparel in a leisure markets. For
example, an individual could choose to wear hiking boots instead of tennis shoes to
the mall or to the park. The substitute trend at the time of the case writing favoured
the sporting goods industry. Many younger consumers were turning to sporting
goods textiles and footwear as substitutes for other type of casual dress. The
challenge for the sporting goods industry will be to determine and maintain the
proper comfort to cost ratio to continue the positive trend.

Bargaining Power of Suppliers:

The primary suppliers of Nike, Reebok, and Adidas type sporting goods companies
are the contract manufacturers that make the shoes, clothing, and equipment and
the suppliers of raw materials, such as the leather, cotton, and synthetics. On the
manufacturing end, little supplier bargaining power exists because the
manufacturing of the products does not require workers to have high levels of skills
and education. Most sporting goods companies do very little in house
manufacturing. Since the skill set for manufacturing sporting goods is low and the
capital requirements for the equipment is low, manufacturing can be outsourced to
regions of the world with low labour wages. The raw materials used in the
production of athletic apparel do not appear to be rare commodities. No one
supplier would seem to have dominance in this market. No specific raw material
supplier information was given in the case writing.

Bargaining Power of Customers:

Customer bargaining power is becoming stronger as the trend to consolidate the

retail sales business continues. Chains such as Foot Locker, the Sports Authority,
and Foot Action are gobbling up mom and pop retail stores in U.S. Manufacturers
of sporting goods equipment like Nike with stronge brand names are at less risk of
being pushed around by retailers, because retailers are going to stock what is
popular. Adidas, on the other hand is less popular, putting it at risk of losing
premium shelf space and market push with retailers.

Competitive Environment of Adidas:

Adidas’s two primary competitors are Nike and Reebok. All three companies have
attempted to establish themselves as leaders in supplying a high quality brand of
athletic footwear, apparel, and gear.

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 and Hexalite Technology. Torsion
Technology. The market and sales department contains the R&D department.

Marketing Athletic Endorsements:

10% of Sales.

$180 mm U.S. vs. $100 mm Europe.

Primary TV ads with ‘Just do it’ logo:

$80 mm in U.S. $25mm in Europe, and $10mm in Asia.

Equal TV and publication ads.

Athletic endorsements. Events marketing:

6% of sales

75% of budget spent on promotions.

TV is ineffective.

DISRIBUTION

77% of products are pre-ordered. Distribute to different market segments through

segment specific stores (e.g. specialty stores for athletes). Offer incentives to get
50% of products pre-ordered. Unreliable delivery discourages pre-order, which
makes inventory hard to control. Selling, General, and Administration expenses are
22.3%. 26.7% and 39.7% of Revenues respectively.

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.
Adidas weakness
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 huge colourful 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 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.

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.

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.

Adidas Strategic Intent and Mission

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.

Key Results Areas:

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. 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.

EXTRA FINDINGS

A) Financial Key Performance Indicators:

a. Target vs. Actual (Store vs. Indicators)

b. Average Transmission Value (ATV) = Total value of bills/ Total

number of Bills.

c. Items/ Transaction= Total number of pieces/ Total no. Of bills.

d. Conversion = (Total no. Of bills/Total no. Of walk-in)* 100

B) Objective: To have an excellent and standardization among

all stores of Adidas.

C) MSP is to evaluate the service quality of Adidas front line vis-

a-vis competitors in terms of the following:
a. Welcome greeting
b. Staff grooming

c. Bulling Rapport

d. Product selection

e. Actual Selling

f. Fitting

g. Team work

h. Cashier service/ upon departure

i. Environment (housekeeping, display area, fitting room etc. )

The research findings aim to help Adidas to benchmark current performance

against the competitors as well as to define areas for improvement and training
needs so as to maintain and enhance customer service.

MISSION: To be the leading sports brand in the world.

VISION: Our passion for sports makes the world a better place.
BRAND ATTITUDE: Impossible is nothing
BRAND VALUE: a) Authentic

b) Passionate

c) Inspirational

d) Innovate

e) Honest

f) Committed.

ADIDAS RETAIL SELLING SKILLS

STEP 1: First impressions

STEP 2: Customer interaction

STEP 3: Understanding customer needs

STEP 4: Convincing customer

STEP 5: Fitting experience

STEP 6: Maximising opportunities

STEP 7: Closing the sale

STEP 8: Final impression.

OPERATIONAL KPI:
Joint duty, Duty attitude, Attendance poster, Weekly Tracker etc...

India Head Office of Adidas

Plot No. 93 Sector 32
Gurgaon , Haryana 122001
Tel – 91 124 4569100

International Head Office

Adidas Ag world of Sports 91074
Herzogenaurach , Germany.

VARIOUS MANUFACTURER OF ADIDAS

1. Deyork Ltd.
 Kowloon Hong Kong, Manufactures Paddings.

2. High Street Fashions Pvt. Ltd

Jaipur , Manufactures Socks.

3. Gokaldas Images

7 & 12 Industrial Suburbs

Yeshwantpur Bangalore, Manufactures Shorts for Swimming.

4. The lower range of Adidas is manufactured by Lakhani Shoes &

Apparels Pvt. Ltd under technical supervision of Adidas.

5. Lower Range of T- Shirts is manufactured by Arvind Brands.

6. T- Shirts are imported by:

Adidas India Marketing Pvt. Ltd

C-2 Ansal Satbari

New Delhi 110074.

DISTRIBUTION CHANNEL OF ADIDAS

Plot
Malaysia,
No. 93,Thailand,
Sector32
Store China, Jaipur,
Store Store
Hongkong,3Bangalore, Poland, 3 3
Institutional Area
Lakhani
Gurgaon, Haryana 122001
Manufacturing unit
Store Store
1 2
Figures include Adidas,Reebok and Adidas Golf,but exclude local sourcing
partners,sourcing agents, sub-contractors,second tier suppliers and licensee
factories.

Figure only include Adidas, Reebok and Adidas Golf

Figure only include Adidas,Reebok and Adidas-Golf.
2007

2007
 PRODUCT LIFE CYCLE

MARKET MARKET MARKET SALES

INTRODUCTION GROWTH MATURITY DECLINE

TOTAL
INDUSTRY
SALES
TOTAL
INDUSTRY
PROFIT

TIME

As per the data available Adidas product are in the growth stage. In 2006 the
footwear production was 200 million pairs, where as it increased by 1 million pairs
in 2007 and in 2008 with a surprising increase of 21 million pairs.

REFERENCES:
 www.scribd.com

www.adidas.com

www.adidas-group.com

http://adidas-group.corporate-publication.com

http://www.wikinvest.com/stock/adidas_AG_(ADDYY)

Khatri,A.(Assistant Store Manager , Bhubaneswar)