Adidas-Salomon
Executive Summary
Since its inception in 1949, adidas have been a leader in innovation; which is also their main competitive advantage in the market place. Along with innovation, the company differentiates itself in the market place with its strong brand equity, supported by a strong global marketing and advertising program.
With their 1998 acquisition of Salomon, the company became adidas-Salomon, and the number 2 sporting goods company in the world. Although there were good strategic fits between adidas' and Salomon's core competencies, its obvious that the divisions failed to uncover these synergies. The future performance of Salomon have lagged behind expectations and It failed to provide much anticipated growth. Even more so, it dragged down the growth rates for adidas-Salomon overall.
To recover the ground it lost, adidas-Salomon needs to go back to its core business which is the footwear and apparel, and exploit opportunities in this division; namely the heritage and sports style footwear and apparel lines which expect 40% growth. The company also needs to increase its market share in North America to be able to substantially increase its growth rates and profitability.
The debt used to acquire Salomon has been an important issue for the finances of the company. Although financially storng and unlikely to default, the company needs to look into reducing its debt to increase its profitability.
1 Adidas-Salomon Strategy Overview
Since its inception in 1949, adidas have been a leader in innovation; which is also their main competitive advantage in the market place. Along with innovation, the company differentiates itself in the market place with its strong brand equity, supported by a strong global marketing and advertising program.
At the first glance, the acquisition of Salomon (and vicariously, Taylor-Made, Cliché, Mavic, Arc'Teryx, Bonfire and Nordic) seems to be a good fit for adidas. Both companies are in the sporting goods industry and have well-known brand names. Both of them have strong apparel lines, and have presence in similar geographical regions. However, it's also obvious that the hard-goods categories of Salomon (skis, bindings, boots, and like.), Taylor-Made (irons, woods, and like), and all Mavic products, are unlikely to create synergies with the apparel and footwear industries of adidas. The company will have administration and management cost savings all across the board by consolidating the management of the companies. The combined purchasing power of all the business units will also provide a better bargaining power overall.
2 Strategic Fit of adidas-Salomon Businesses
In an increasingly competitive market with strong rivals such as Reebok, Adidas, Nike’s latest strategy is offering consumers the shoes they desire. This is done by providing customers with the option of designing their own shoes. At Nikeid.c...
At the meeting, management revealed plans to address both top-line growth and operating performance. To boost revenue, the company would develop more athletic-shoe products in the midpriced segment3a segment that Nike had overlooked...
In conclusion the last few years companies like ADIDAS has innovated and has changed the way to see and to play soccer because the soccer balls it is the most important thing when playing. From pigs bladders to synthetic foam and micro textures the technology being used has suffered many changes to fulfil the FIFA requirements but also to improve them like the Brazuca did. Even from ancient times they had the desire to play and to have fun with a beautiful sport like soccer so this is why companies have made a better experience from this sport and they develop better and better technology to make the game more interesting and more enjoyable to play.
Not as strong brand recognition as Nike and Adidas. Product line not too wide. Narrow target market. Opportunities: Expand their product lines.
The corporation should invest more money in research and innovation since this is what has helped them to make a product that rivals their competitors. At the same time, it is imperative for them to improve their machinery for cheap labor costs which will help the company increase its production allowing it to meet the demand in the market. By improving production leading to lower costs of making shoes, apparel, and equipment, Nike will achieve higher demand assuming a quality product is maintained in that process. They will stand a better chance of competing in the industry (Hill, 2009). The organization is already in a better position for meeting the demand, customer taste, and needs. The company should improve quality by focusing on developing lightweight products that are more durable compared to those offered by the competitors. Also, Nike can keep up their success by continuing to reinvent and improve their items and continue to meet the current demand by using new technology. It can also use the Internet to communicate with consumers (Hill, 2009). By developing new technology, Nike will allow the customers to suggest and design their shoes online. To achieve this goal, it is fundamental to enhance areas such as their website to make it more user-friendly. Finally, the company should pay attention to small startup organizations that enter the
A portfolio manager, Kimi working for a large cap fund company called NorthPoint Group, had a difficult decision to make while looking at Nike Inc. financials: whether Kimi should buy Nike shares or not for the fund Group she was working for. Kimi needed to consider all aspects of Nike Inc. financial position. On July 28,2011 Nike Inc. held a analyst’s meeting to disclose their fiscal year 2001 as well as to revitalize the company who wasn’t performing well. Thus, the meeting showed that Nike Inc. experienced some difficulties during the past years. First, Nike Inc. revenues have reached a plateau since 1997 of $9 billion and its net income has decreased from $800 million to $520 million. Also, it showed that Nike Inc. market share for their US athletic shoes had decreased from 48% in 1997 to 42% in 2000, their supply chain systems wasn’t efficient enough and a strong dollar has drove the company’s profitability/revenue down.
Nike’s Asian operations had previously continued to soar generating US$300 million in 1994 in revenues to a whopping US$1.2 billion in 1997. However based on the Asian economic crisis, this had adversely affected revenues, while regional layoffs were inevitable. Nike also performed well in the European market generating about US$2 billion in sales and a good growth momentum was expected, however, some parts of Europe were only slowly recovering from an economic downturn. In the Americas (Canada and the U.S.A.), Nike experienced a growth rate for several quarters. The U.S. alone generated approximately US$5 billion in sales. The Latin American market at this point was exposed to economic volatility; however Nike still saw them as a market with “great potential for the future”.
In reviewing the case of New Balance Athletic Shoe, Inc. it is clear that there are a few major problems that the company is facing. First of all, New Balance falls behind its other major competitors, Nike, Adidas and Reebok, in the area of marketing. Unlike its competitors, New Balance does not undertake celebrity endorsements. This puts them at a disadvantage when it comes to brand building. This also causes the company to lose out somewhat on gaining awareness on a global scale as it lacks endorsements in major sporting events. Most global brand names generate strong brand recognition through celebrity endorsements in sporting events that would give them the needed momentum to carry their brand name further into the global market.
Nike Inc. is a very successful publicly traded sportswear and equipment company based in the United States. Nike is a multi-national and Fortune 500 company. It has reached achievements in their innovation in products that Nike has become one of the most recognized companies today and companies dream to have what Nike has created. The main headquarters for the company is in the Portland area near Beaverton, Oregon. Nike leads the world in supplying athletic apparel and shoes. Nike shows how devoted they are in the satisfaction of their customer’s needs that it shines upon their mission statement and encompasses their vision. Nike ensures to go far and
Adidas comply with International Labor Organization, and follow the code of conduct of the World Federation of Sporting Goods Industry. Adidas`s workplace standards applies to its sites globally, and to their supplier factories across the world. The standards cover health, safety, labor rights and environment protection. They revise the standards from time to time to meet the changing environmental requirements. (Adidas11, 2015).They made sure that their suppliers are following the standards properly by conducting audits from time to time across all of their facilities across the world. This shows their consistent effort and drive to maintain the sustainability efforts within their control. Adidas being a member
Adidas AG (German pronunciation: [ˈadiˌdas]) is a German multinational corporation that designs and manufactures sports shoes, clothing and accessories. The company is based in Herzogenaurach, Bavaria, Germany. It is the holding company for the Adidas Group, which consists of the Reebok sportswear company, Taylor Made-Adidas Golf Company (including Ashworth), Rockport, and 9.1% of FC Bayern Munich. Besides sports footwear, Adidas also produces other products such as bags, shirts, watches, eyewear and other sports and clothing-related goods. Adidas is the largest sportswear manufacturer in Europe and the second biggest in the world, after
Nike American Sportswear generated revenue of 7495 million US dollars in 2014, which was almost double of 2009 revenue of Nike Sportswear (Statista, 2015).The sales of (Athletic) Sportswear of Nike 90 million US dollars, however, the sale of Adidas Sportswear (Competitor of Nike) was 25 million US dollars, which was not even one third of Nike Sportswear sales (Statista, 2015).Nonetheless, the return on assets and equity are 13.41% and 26.43% respectively (Yahoo Finanace, 2015).
Executive Summary Introduction Kimi Ford, a portfolio manager at NorthPoint Group, a mutual-fund management firm, was considering buying shares in the fund she manages, the NorthPoint Large-Cap Fund, with an emphasis on value investing. Ford held an analysts’ meeting to disclose its fiscal-year 2001 results and, most importantly, to communicate a strategy for revitalizing the company. Nike has maintained revenue of about $9 billion since 1997. However, its net income had fallen from almost $800 million to $580 million. Moreover, Nike’s market share in U.S. athletic shoes has fallen from 48% in 1997 to 42% in 2000.
The first recommendation for Under Armour is that they should build on its relationship with veterans and first responders. In order to do this they should continue to offer the ten percent discount to these groups. Additionally Under Armour will develop a marketing campaign that appeals to veterans and first responders, and builds Under Armour’s reputation as the brand that supports those that support us.
Nevertheless, Nike is an extremely diverse company with outstanding organizational structure, impressive marketing strategy, and innovative products. The organizational structure of the Nike Corporation helped them become a leading innovator for the world with creative apparels and shoes. Their intelligent marketing strategies assist them in advertising their products to motive their customers and sell them. Their innovative product motivates customers with great performance footwear and quality designs to take on any obstacles. The Nike Corporation discovers various ways to improve their organizational structure to inspire the world.