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AdidasNike Company Analysis
AdidasNike Company Analysis
REPORT
COMPANY
ANALYSIS
REPORT
COMPANY
ANALYSIS
SPORTSWEAR INDUSTRY
Lisa Wurden
Veerle Hessels
M2Ei
1
TABL E OF CONT ENT
I. Introduction
Barriers to entry
Competitive Rivalry
Threats of substitutes
Profile
Strategy
5P’s of Mintzberg
Profile
Strategy
5P’s of Mintzberg
Profile
Strategy
5P’s of Mintzberg
Positioning
Benchmarks
2
3
IV. Market Analysis
DESTEP
Developments
Distribution Channels
V. Conclusion
Appendix
A. NIKE LISA
Organisational Structure
B. ADIDAS CAMILLA
Organisational Structure
C. ASICS VEERLE
Organisational Structure
Sources
4
5
I . I NTRODUCT ION
Sport apparel is starting to become a trend, fashionable and to be worn as normal day wear. Where
even designers are creating collections inspired on sportswear and showing these on the catwalk. This
made us curious, which let us deicide to take the sports market under the loop.
To make sure athletes and sportsmen and women will reach the best performance sports apparel is
improving often by innovating and developing to get the most comfortable and functionality. Moreover,
this is one of the most competitive markets where big brands such as Nike, Adidas and Asics are
playing.
In our report we will compare, observe and analysis these brands to learn more about strategies,
theories and identities. How do we see these brands and how do these brands make sure they will be
6
I I . I ND USTRY ANA LYSIS
C O M P ETITIVE R IV ALR Y
B A R G A I N I N G POWER OF SUPPLIER S
7
Porters Five Forces is a framework to analyze the the age group 23-24 is mass merchants (37%),
level of competition within an industry and busi- followed by chain stores (15%) and sports retailers
- The global market for sporting goods and per- nam, China, Indonesia, Argentina, Brazil, India and
tition and a large number of players in the field - With these suppliers that based all across the
such as, Puma, Adidas, Asics, Nike, ect. globe for the larger companies the bargaining pow-
ments in consumer preferences and technological - For the smaller players in the industry the bar-
advancements. If the companies in the industry gaining power is higher as for them it would come
are unable to adapt to these changes it will turn extra costs and a higher loss by switching suppli-
- There is a rising competition for smaller emerg- - Switching costs in changing suppliers is signifi-
ing companies such as Under Armour and Lulu- cant, even tho suppliers in general share the infla-
lemon, these focus more on a niche market such tionary pressure due to material costs and labor
goods. These might take away some of the mar- - In the industry two large competitor Nike and
ket share from the bigger players Adidas, have a large amount of resources available
- In the industry two large competitor Nike and at their hands, which makes it easy for them to
Adidas, have a large amount of resources avail- pay with the performance of sportswear and gaining
able at their hands, which makes it easy for them market share
to pay with the performance of sportswear and - Statistics tells that Nike and Adidas are the most
- Statistics tells that Nike and Adidas are the goods worldwide, a combines revenue of almost
sporting goods worldwide, a combines revenue of - The big competitors such as nike, asics and
almost US$50 billion in 2013/2014. adidas hold fabric and process patents, hence their
- The big competitors such as nike, asics and product portfolio cant not be copied in the future.
adidas hold fabric and process patents, hence - The preferred place to buy athletic apparel for
their product portfolio cant not be copied in the the age group 23-24 is mass merchants (37%),
8
PO RT E RS FIVE F OR CES II
B A R G A I N I N G POWER OF C USTOM ER S
TH R E A TS OF NEW ENTR ANTS
TH R E A TS O F SUB STITUTE PR ODUC TS
9
BARGA I NI NG P O W E R O F C US - competitors to enter the market.
- Nike, Adidas, Puma, Asics and the bigger players participation over the previous year had increased;
caters to their customers both in their wholesale indoor games increased by 11%, snow sports de-
sectors and in their direct-to-customer channels. creased by 11%, fitness activities increased by 5%
- Out of all wholesale consumers, only some hold Physical fitness participation have been showing
the bargaining power to become partners with com- substantial growth in popularity. Where amateur
petitors or start their own private label to earn a participation in team sports grew 29% from 2011-
- Bargaining power of the end-customer is quite - Financial forecasting company Trefis predicting
low in the industry as the bigger companies already the global sportswear market to grow to $178bn
have a very strong brand image and holds already by 2019. However more existing companies in the
a wide product portfolio with new innovative solu- apparel industry are trying to enter the sportswear
tions. However, customers choose brands on sever- market and in the future could try to penetrate
al factors such as price, advertising, product spon- the performance apparel market because of this
- The big competitors such as nike, asics and - Another big factor that can come to play are
adidas hold fabric and process patents, hence their E-Businesses, that could start selling competitors
product portfolio cant not be copied in the future. footwear, sporting apparel and equipment as the
- The preferred place to buy athletic apparel for barriers to entry are quite low in this business.
the age group 23-24 is mass merchants (37%), TH R EAT OF SUB STITUTE
followed by chain stores (15%) and sports retailers PR ODUC TS
(14%). - The demand for sporting goods and apparel
- In sportswear large capital costs are spent on ture as customers can not substitute these prod-
product demand. This restricts the entry of new - The problem of counterfeit products is an area
- The amount of capital investment a compa- improved over the recent years and this could
ny would need to enter this segment of sporting threaten the rest of the companies in the indus-
goods and performance wear, suspecting that the tries sales in emerging markets, and potentially
threat of new entrants are fairly low in this industry change the brands value.
due to the fact of such a huge company market to - Another big factor that can come to play is In-
choose from consumers have already gotten their ternet companies, that could start selling compet-
feel of the different brands out there. itors footwear, sporting apparel and equipment as
- For brands such as Nike they already have the the barriers to entry are quite low in this business.
10
I I I . COMPANY A NALYSIS
NIKE is a worldwide well-known and established owned laboratories and data exchange systems in
sports brand. Due to the general Health Trend, their supply chain.
also sports and being sporty in general turned The Mission of the company owned laboratories
into a very attractive topic. That’s just one of the the so-called “Sport Research Lab” can be short-
biggest key players in the boom of sports brands ly explained as the following, by Matthew Nurse,
and Nike as the market leader profits most. What Senior Director of the Nike Explore Team Sport
makes Nike not only special but much more Research Lab, “Our function is to provide knowl-
unique is their Research Centre. Nike invests a edge and insights. We are the global repository
big deal into testing, improving and innovating for the science of human performance and po-
„NIKE, Inc. fosters a culture of invention. We cre- Nike makes sure to be on top of innovation at
ate products, services and experiences for today’s all times and specifically enable the athletes to
athlete while solving problems for the next gener- perform new best levels with their product.
ation.“ (Nike.com, 2015) Nike is also one of the first companies next to
With this statement it comes very clear what the IKEA to incorporate a data exchange system in
core of Nike Inc. represents: Innovation, Supply their supply chain to track how much pollution
The key to their success as they state though is this tracking system they can reduce the size of
“Data is the new voice of the athlete.“ (Nike.com, they managed to get themselves at the top of
11
HISTORY
In 1964 at the University of Oregon, track-coach
VISION MISSION
“To help Nike, Incorporated and our customers “To bring Inspiration and Innovation to every Ath-
thrive in a sustainable economy where people, lete* in the world. *If you have a body, you are
profit and planet are in balance.” (Nike.com, 2015) an athlete” (Nike.com, 2015)
At Nike the focus lies on creating a high quality athletic product not only for the footwear but also
apparel for athletes of all kinds. Nike highlights the fact of no differentiation between human beings and
11 MAXIMS OF NIKE
Building the Core Philosophy and a guideline for epmloy-
ees.
3. Nike is a brand.
6. Be a sponge
7. Evolve immediately.
12
5P’s OF MINTZBERG developed geographies, which are North America,
In May 2010 NIKE published it´s current “Global to put high investments into their developing mar-
Growth Strategy” for 2015, with the goal to reach kets, which are Greater China, Central & Eastern
a sustainable, long-term growth across it´s world- Europe and the Emerging Markets.
unveiled their key-initiatives to reach a revenue Concerning Nike´s direct consumer contact, the
target of $27billion at the end of fiscal year plan is to open round about 250-300 additional
2015. Their key-initiatives are called Category NIKE-branded stores allover the world to broaden
Offense, Geographic Opportunities and Direct to the consumer experience especially in premium
“We’ve never been more inspired, innovative and focus on the digital commerce to explosively
aligned to achieve our goals,” said NIKE, Inc. grow the NIKEID.
innovative and compelling products, brands that Nike´s plan to outmaneuver the competition is set
are distinct and relevant to their consumers, and on several levels of operation. Firstly as men-
the world’s greatest athletes and teams. Our fo- tioned in the strategy, more brand shops will be
cus is to build, fuel and accelerate the power of opening in the number one locations around the
our portfolio.” (Nike.com, 2015) globe to deepen the consumer’s ability to experi-
The powerful and competitive advantages in the seen performance and innovation will be devel-
NIKE Incorporated Portfolio will be strengthened oped and launched. Additionally on the digital
to reach the targeted revenue in this plan of front there will be more incorporation in the daily
strategy. The so-called “consumer-focused cate- life of the costumer in form of helpful apps and
gory strategy” is splitting up sports into different “do it yourself” design shoes and competitions.
categories and offense tactics. While doing that Lastly there is to say that the market presence
they try to be as present as possible due to due to various sponsor ships with athlete celeb-
increasing market place capacity and penetra- rities, campaigns with African track athletes and
tion. The categories are as the following: Action NIKE runs in all major towns around the globe
Sports, Athletic Training, Basketball, Football, are the easiest catch of consumer engagement.
share of the revenue it has and what will be new NIKE´s pattern to outwit it´s components and com-
things that are being developed. petitors are based on three fundamental pillars
GEOGRAPHIC OPPORTUNITIES that hold the company and help gain the market
Nike first wants to broader expand in it´s furthest 1. Sustainability and business growth are
13
misunderstanding that growth in revenue and ranges
sales goes up with growth in greenhouse gas - wide range of choices for individuals
value and innovation but at the same time to - sponsorships and personal engagement for
mense amount of waste while producing. The evaluated strategy of NIKE is planned to
2. Materials Matter. “Six years ago we identi- reach a goal. This goal consists of several attri-
impact of a pair of NIKE shoes was in materials Firstly, NIKE has already shown it´s performance
used to make it“ (nikeresponsibility.com, 2015) at the top of the greenest companies worldwide
That is insight that gave reason for improvement and will now have the challenge to stand it´s
and since then NIKE has it´s own research lab to point there since the competition will follow. This
develop new less polluting materials. Further they means to keep up with innovations and reach a
with for example NASA or the US Agency for In- Secondly, performance and innovation can only
ternational Development to get insight and knowl- go that far. For NIKE it is important to see what
edge from other industries. more there is. The goal is to think out of the
3. Climate change requires business change. box and create something that is not the usual.
NIKE highlights the fact that the on-going climate More than just an aid to sport.
changes are also influencing the athlete and And thirdly they will have to fight for their con-
his performance. Those new conditions require sumers. Trends and mood driven purchasing
new products that are adjusting to the different could threaten revenues as well as brand image.
ties.
P O S I T I O N
due to:
being sustainable
14
MARKETING STRATEGY
COMPETITIVE
ADVANTAGE
PRODUCT DEVELOPMENT
GLUE VALUE
NIKE´s product development can be considered
NIKE is categorized in GV III and IV since the
as very strong, since they are constantly adding
brand is understood in a very broad social con-
services as well as products in already existing
text in terms of the sneaker trend and is reflect-
markets. For example the NIKE app´s and various
ing the zeitgeist but also recognized in smaller
collaborations and events are pushing conscious-
niches due to high performance value.
ly.
ANSOFF MATRIX
The Ansoff Matrix is existing of four strategies:
MARKET DEVELOPMENT
market penetration, product development, mar-
Market development is a rather weak topic for
ket development and diversification. By using the
NIKE. Due to their fast product development
Ansoff matrix as a tool in relation to NIKE, it will
phases and always new, innovative collections,
be visible how the brand can gain market share.
they won´t use existing products on their new
MARKET PENETRATION
markets.
NIKE´s market penetration is strong, but might be
15
fresh and desirable. The NIKE swoosh is world-
appendix)
TIER 4
TIER 3
16
FINANCIAL ANALYSIS
The four most important KPI´s of NIKE
investment is required.
is doing well.
17
Nike has half as many liabilities than there
liabiliaties.
18
B. ADIDAS BY CAMILLA LINDHEIM NILSEN
Adidas works in a unique way to help athletes one of many facets and talents. Adidas serve a
perform better, play better, feel better. Their multi-brand strategy enabling Adidas to do just
products are breaking records, setting trends and that, grabbing opportunities from various points
making history, every day all over the world. This in the market, as both a mass and niche player.
products. It doesn’t matter it you’re the fastest in Germany founded Adidas. Originally the com-
person or all about being a style setter. pany name was Dassler shoes, in 1948 Rudolf
Their consumer’s brand love is because of the together and start up the company PUMA. That
employees of Adidas and their passion for the is when Adi Dassler changes the name to Adidas
brand, their vision, mission and culture. With ded- and came up with the three stripes logo. At first
ication, commitment and team spirit. the three stripes were made to keep the foot
19
VISION
To enhance social and environmental performance in the company and the supply chain to become
an industry leader, thereby improving the lives of the people making our product and wearing them
MISSION
“The Adidas Group strives to be the global leader in the sporting goods industry with brands built on
in the sporting goods industry with brands built is noticeable that they have 4 set values which
on a passion for sports and a sporting lifestyle.” are: Performance, Passion, Integrity and Diversity.
Five mission pillars within the company in all the 160 countries they
share. Performance
2. Innovation and design that seeks to help all built upon, creating excellence in all segments is
ceed consumer expectations and to provide them We are honest, open, ethical, and fair. People
environmental responsibility. Rewarding the em- We know it takes people with different ideas,
ployees and shareholders for creativity and diver- strengths, interests, and cultural backgrounds
sults.
20
5P’s OF MINTZBERG
- PLAN Today Adidas is working together with organiza-
Every fifth year Adidas sets a new plan (strategy), tions such as Stella McCartney, Kanye West, BASF
New standards on speed to market, by reduction and coming athlete or the big stars to scare the
of production lead times and increasing in-sea- competitors and create sales. Save more on pro-
son creation. The company plans to work this duction by using open source this allowing them
throughout the whole organization, and further to gain market share as customer engages into
and expanding product customization for consum- a technique for dealing with things, most
Having 80% of the Gross Domestic Product, Adi- ing true. These actions have been a consistency
das want to reach out and grow in all geograph- in the behavior of Adidas.
Los Angeles, New York, London, Paris, Shanghai 1. Being relevant: Keeping up with the trends,
and Tokyo. Here investing in talents, attention following marketing campaigns. Planning up to
group will focus their investments on the core 2. Being resourceful: for Adidas just about every
brand portfolio: Adidas, Reebok and Taylor Made. company is competition, they’re selling the same
Opening open source, they created a stronger kind of things. But for Adidas staying true and
commitment with the consumers, and engaging keeping true to their customers, they work on
the consumers desire in creation, designing and the whole market to cover all the needs of the
product presentation in making them a part of consumer but also thinking environmentally and
21
ful and better knowledge of the consumer and Being responsible and accountable for develop-
3. Staying true: Adidas have stayed true to their And according to Forbes is seen as the 2’nd
statement for decades and through decades of most sustainable brand amongst their consum-
competition and changes. Making sure the desire er, meaning that their view on the world around
to grow and increase revenue doesn’t blur their them reach the consumer and they read the
German roots with a mission to be the best and engaged. Using performance, benefits and
- addressing multiple consumer needs Adidas received ECRA’s middle rating for their
- less affected by one-dimensional market of the impacts they have. And showing commit-
Adidas is mainly targeting competitive sports and product life cycle by the year of 2020.
casual footwear.
- PERSPECTIVE
mance
22
COMPETITVE
ADVANTAGE
advantage by following
ANSOFF MATRIX
Looking at the Ansoff Product Market Growth matrix relating to Adidas, it shows which ways they can
and growth.
- Market Development
Most likely this will not affect Adidas on a larger
23
GLUE VALUE Tier 4:
Adidas belongs to the glue values of nr.3 and 4 Sporting events such as the NBA, Golf tourna-
by serving the bigger part of the market share ments, Sponsorships of popular athletes and
and the niche market with their diverse brand clubs such as FCB(FC Barcelona), also events to
and Diversity.
Tier 2:
their performance.
word.
Tier 3:
and strong.
24
FINANCIAL ANALYSIS
As the four main financial KPI’ of Adidas are: Revenue, Operating Margin, Gross Margin and Return on
Equity.
Looking at figure 1: Revenue we
expenses.
25
Figure 3, shows the 3’rd KPI
As Adidas had a lower ROE in 2014 it can make it harder to grow without a large capital. In gen-
eral the wanted ROE ratio would be between 15-20% before growing further. One of the reasons
for a lower ROE in 2014 was the decision to buy back their shares and in 2014 they bought back
4.889.142 shares.
26
C. ASICS BY VEERLE HESSELS
PROFILE
Number of employees: 6585 (consolidated basis Asics is established in 1949 as Onitsuka Co. by
VISION
PHILOSOPHY
- Provide valuable products and services through sport to all our customers
- Fulfill our social responsibility and help improve conditions for communities around the world.
- Share profits brought by our sound services with our shareholders, communities and employees
VALUES
Sportsmanship
Respect Rules
Be Courteous
Be Persistent
Be prepared
27
HISTORY This slogan made them the first sports manufac-
in 1949 Kihachiro Onitsuka established the com- turer targeting the world. Fast afterwards in 1979
pany Onitsuka Co. Where he produced sneak- offices of ASICS opened in South-Africa and
Corpore Sano”, which stands for you should pray To create more coherency Onitsuka Tiger and
for a sound mind in a sound body. This kept Asics emergede as one and ASICS tiger co.
Onitsuka driven and would be the inspiration for established in 1981. And started to be listed on
his new brand name later on ASICS. many stock exchanges next to the already list-
in 1950 Onitsuka started to produce basketball 1964. They got listed on the Luxembourg stock
shoes under the brand name Onitsuka Tiger and exchange (1981), Signapore exchange (1982),
in 1953 he released the first Marathon shoes Frankfurt and Vienna (1983) and Paris (1988).
To create the best shoes in performance and research institute of sports science. This is great
function, Onitsuka collaborated with some great advantage for Asics, where they can establish
established manufactureres such as GTO Co. theirselves as one of the most innovative and
and Jelenk Co., which all three together in 1969 most specialized sports brands in the world.
ASICS. Where the production, promotion and sell- To grow further, Asics starts opening own stores
ing are managed in one company. in name of ASICS starting in 2002 and with Onit-
With their new brand strategy they created the overseas store opens in 2008 in London.
THE COMPANY
Asics is established in 1949 as Onitsuka Co. by Kihachiro Onitsuka, with producing sneakers later
on developing into sport shoes. The name Asics is inspired by the saying “ Anima Sana In Corpo-
re Sano”, which stands for you should pray for a sound mind in a sound body. This brand name is
used after the emirging of three companies GTO Co., Jelenk Co. and Onitska Co. in 1969.
With their Japanese roots, this company produces footwear and sports apparel for athletic uses and
is designed for a wide target group in generally the upper-middle to uper range. ASICS has been ran-
28
5P’s OF MINTZBERG
Plan: Pattern:
Asics made a growth strategy for 2015, where o ASICS has been opening flagship stores and
they want expand their business on a global headquarters around the globe.
scale and increase their net sales up to ¥400 o Opening Asics institute of sports science to
billion. By operating globally, ASICS wants to innovate and develop new and better products.
create a global company with equal goals and o They have started to create IT platforms to
terms. Divided in five sales regions: Japan, USA, combine al the systems and immerge them into
EMEA (Europe, middle east, Africa), Oceania/south one ERP system to promote efficiency, increase
Moreover, they want to grow in e-commerce by o They are Strengthen the recruitment to enrich
increasing their sales with 2%. the core of ASICS spirit by recruiting personnel,
Create more brand awareness and broaden their which is globally orientated and want to play an
Ploy: Position:
The ASICS group created a new foundation, to Asics provides sports wear and shoes in high
called ASICS SPIRIT, and is created to add extra By producing it in their own factories and also
To grow globally, the company has been opening partment stores etc. store business to customer
better relation with the retailers whom sell their They want to keep up with the big companies, to
products. Moreover, ASICS and Onitsuka Tiger are reduce the gap in the market share and become
opening more flagship stores around the globe to third in the ranking. To show their true values
create more brand awareness. and their competitive strategy compared to for
ASICS also wants to focus more on other sports They are applying all of these strategies to im-
next to running. Which can complement and prove quality and broaden their already existing
strengthen the running business. These other target group. To give this target group the feeling
sports are Tennis, track and field, Volleyball, and they are engaged to the brand and provide them
rugby. In these specific sports markets ASICS with new innovational products. Next to that,
foresees a potential achievement to place itself in they are creating a department in south-Africa to
the top three of the global market share and in reach the African market and spread their geo-
29
Value connection pyramide
Market Strategy
Tier 1:
Asics prioritizes the developments for marketing
what is the core of the value proposition?
in the United States. By focusing on growth in
Sound mind, Sound body
women’s products and e-commerce. By starting of
Create quality lifestyle through intelligent sport tech-
with the United States, they want to influence the
nology
other markets with success. To accomplish this
base.
the managers.
30
Financial analysis / 4 KPI’s
Net Sales:
bigger sales.
Operating margin:
31
Gross profit margin:
32
POSITIONING
We have made two positioning matrix’s to show where our brand stand compared to other brands in
the market. Focusing on price/usability and usability/quality. As you can see are the brands we are
analysing all focused on the sports market in the same price range. However, they have a different
perception on the fashionability. Where Nike wants to offer a more fashionable product and Asics is
more focusing on the performance of the shoe instead of the fashionability. We choose the compa-
nies H&M and Hema in our positioning matrix as well, to compare the price/fashion ratio next to that
33
BENCHMARKING
BENCHMARKS
MEASURES ADIDAS NIKE ASICS
three companies. For example the gross profit margin where Adidas has a 3-3,5% higher gross profit
margin, which means the company is the most healthy of the three and has the most profit. Secondly,
we looked at the operating margin there are big gapes between the companies, where nike is rising
with the highest margin. What means have a larger amount of the revenue available to use for cost
As a conclusion you can say that Nike with their biggest share of the market with 27,8% is the
healthiest of all. This is all been possible by their great margins which are many procents higher than
Adidas and Asics. They are the most healthy because of their high revenues. This makes them the
most likely keep up and stand on their own. Next to that they will stay healthier over a long period
of time.
34
I I I . MARK ET ANA LYSIS
DESTEP
DESTEP is short for demographic, economic, social-cultural, technological, ecological and political factors. It
is a tool used to create an image of the eternal (macro) environment of which the cooperation is active in.
Demographic
Economical Ecological
Economic growth has been 0% in the first quarter of More brands are using ecological materials in their
2014.[1] designs
In just one year (from the second quarter of 2013 till Where they are trying to reduce or recycle the water
the second quarter of 2014) the willingness of con- and chemical consumption
sumers to buy something has increased. It is still not Brands are joining the organizations IFAT or EUR-
in positive numbers but it has escaped the deep pit ATEX to get checked on their sustainable perfor-
of Holland has an average of -6 while the western area World trade is founded on rules laid out by the
has -2. [3] World Trade Organisation that help ensure that
The ration of running man/female changed from 60/40 ly at EU level. The Commission negotiates agree-
There are 50 million runners in Europe, spending over works closely with national governments and the
10 billion on running apparel and accessories. European Parliament to maintain the global system
There are a lot of new innovations in product devel- rules, this means that a single country can block
functionality such as heat absorbance or elasticity. In dealing with the aftermath of the global financial
However, there is also an increase of in innovations in crisis, a movement against globalisation has ar-
automated machinery. This will improve the productivity rived. This new nationalism takes different econom-
and reduce labor activity. Nevertheless, in the apparel ic forms: trade barriers, asset protection, reaction
industry there will always stay a part labor intensive, against foreign direct investment, policies favouring
while not possible to automate it. domestic workers and firms, anti-immigration mea-
35
TRENDS
Healthier and sporty life
Technology: People want to start living a healthier life, the number
With the great developments in technology, they are of runners is increasing, supermarkets are broadening
improving and making our lives easier to live. By imple- their biological assortment and health blogs are hot
improve and challenge physical actions. Technologies This to have a fit and relaxed feeling, to get rest
in the way of devices are the most common and used and feel awake for our busy lives. With increasing of
by the leading brands. For example, Nike with their own obese people, people start to notice how important
Nike+, this is a chip and app to track your activities. a healthy life is.
weather circumstances.
36
SUSTAINABILITY
ADIDAS
Adidas has a global sustainable team existing out of 70 people who are making sure that the company is
developing keeping up with their sustainability program. Next to their focus on reducing water and using the
most sustainable chemicals they are trying to differentiate themselves from other sportswear brands is that
they are very concerned about improving workers rights and the labor circumstances. They also engage with
They have been providing services to make sure the workers by their suppliers are working in good conditions.
Creating a SMS worker hotline for factory workers where Adidas can act on concerns or questions has done
this. Next to this initiative they have started an online university, where employees can learn in a informal
surrounding.
NIKE
In Nike’s point of view, you have to improve and innovate what you got into more sustainable products or
services. They have done a lot of research on materials to create a more sustainable production. This has
been done by implementing lean manufacturing. This means you will get the maximum value out of your
productiveness.
Herby, they want to deliver profitable growth through sustainable manufacturing and sourcing.
Nike believes sustainability is the world’s greatest innovation opportunity where materials and manufacturing
ASICS
Asics has 3 prioritized goals firstly, reducing environmental impact throughout the value chain. Secondly,
improving chemicals management in our supply chain. Thirdly, improving labor practices in our supply chain.
These goals are for longer term and are applicable for all sectors.
37
CONSLUSION
Sportswear brands can contribute to improve sustainability mostly within the materi-
ing part. These parts use the most water, CO2 and other waste we want to de-
crease. With decreasing these points you will have the most influences on workers,
community and environment in a positive way. These are the goals the industry
wants to achieve. Within sustainability you have different direction, as we have said
before waste, but what is also a very important issue is the working conditions
at the factories. To provide good working conditions the sports industry is putting
a lot of pressure on the suppliers in the way of setting guidelines and arranging
trainings. Which hopefully will all lead to a great and better world in the end.
38
MARKET SURVEY
target group:
The sportswear industry includes everyone and almost everyone wants to be part of that group. Practicing
sport is a way of relaxation, staying healthy or a social gathering. But the focus is mostly on people in
between the age of 15 until 65. It starts with 15, because that is the age you will start to understand the
importance of good quality sporting goods and will choose selectively and it ends with 65 because around
These people use the sportswear for fanatics sporting, casual sporting including all kind of sport activi-
ties or casual/loungewear. Sportswear is worn around the whole globe and the industry is now starting
to introduce their brands in Africa as well, which makes in a universal market without excluding anybody.
Therefore are there many brands competing in different price segments, with diverce range of products and
39
We have done a survey over 31 persons to gain more knowledge about the buying interests in the sports-
wear industry. In addition to this information, we wanted to know what their interests in sports and sports
brands were, to know where are brands stand and what kind of influences are important to choose our
brands.
Over the people who have filled in our survey you see that people are not consistent in buying at one
brand. This is interesting, because you want to know, by whom or what they got influenced. 32% gets
influenced by the specialization/function of a product and 26% is convinced buying a product by the ad-
vertisements in magazines or on the television. Next to that, reviews are very important. 58% recommends
friends to buy from a certain brand and 13% does give friends bad reviews about brands as well. What
means the customer service and the help offered in a store to find the perfect fit is very important as
well.
40
MARKET SHARE
Last year
Statistics tells that Nike and Adidas are the most dominant companies within sportswear and sporting
Nike generated the most revenue in the sporting goods market in 2014 with around 27,8 billion dollars in
revenue.
2014 statistics:
sportswear market has a market share of 15% the global fashion industry:
- nike: 27,8
- adidas, 19,95
- VF corporation 7
- puma 4,38
- asics 3,2
This statistics we can compare with the newer statistics from 2013/2014
This statistic shows that in 2011 Adidas was the biggest athletic apparel vendor with an estimated global
market share of 11,2 percent compared to in 2013 Adidas had a market share of 19,5% but then were
Sportswear/sporting goods were marked by region according to the market and sales in 2013.
According to research shown the global sportswear market is growing strong with the trends coming. The
41
Market share 2013/2014
42
GROWTH RATE
From 2010-2015 the market share of sports, sportswear and sporting goods have improved its economic
Counting the whole market size in US$ the global retail sales in 2013 were at $263 billion where sports-
wear sales constituted to 15,3% of the overall clothing market. From 2012 to 2013 its estimated that
sportswear sales grew 6,9%, compared to the growth of the overall apparel industry with a growth of only
5,1%.
Sporting goods can mean different things for different people, it is now a global growing industry with
spectators and players all around the globe. Sports is an experience but its an personal experience, that
is different to all. For the industry sports is a merging marketplace that is worth investing in. NSGAs 2013
research report shows that participation in sports have grown over the previous year.
DEVELOPMENTS
In the apparel industry there have been major developments and the sporting goods companies are tak-
ing them all in and keeping up with the switching market and trends. Some of the developments that are
emerging more are: wearable technology, smart textiles, recycled garments especially in the footwear of
sporting goods companies are looking at using recycled materials for production and of course then you
have the virtual fitting that is coming and will make it a question of will we even need to go to the shops
In all of these developments the biggest players on the market are also in development with medical care
seeing how performance can be improved and if there are some factors that might harm you and then
your clothing in the future can let you know before it even happens.
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OPPORTUNITIES THREATS
• Growing demand in sporting goods and their • Rise in international counterfitting
• Expand to Africa -> first South Africa • Negative image created by the sponsored
Asian Countries
DISTRIBUTION CHANNELS
Existing distribution channels: Retail, Wholesale, Online, specialty stores, specialty fitness, department stores,
This statistical result shows the sporting goods sales by different channels of distribution only in the U.S
from 2008-2013.
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APPENDIX
Appendix Nike by Lisa
COMPANY CULTURE - Very strong financially seen while having a
NIKE´s human resource management system is cre- very small number of long term debts
ated to diminish competition in-between co-work- - High customer engagement, enabling them
ers at the company. It clearly separates every to design their own shoes online
individual from its competition. Further there is to - the company NIKE itself is a very competi-
say that NIKE promotes diversity at a high scale tive organization and has a healthy dislike to their
The motivation for the HRM team is built up on egy in all markets
1. To foster the professional development does not own its own factories, they don´t have
2. To enhance the work performance of every any money stuck in buildings or workers and can
4. To assist in recruiting diverse professionals have no own factories which means that the pro-
5. To develop community interaction of the duce wherever they get the highest quality for the
For NIKE the most important slogan every day market share would decrease and they can´t keep
and innovative product and that they run a very - Due to the general individualism trend, con-
strong, healthy and efficient business. sumers might get sick of NIKE at some point and
45
BUSINESS MODEL CANVAS
46
PORTERS 5 FORCES The pricing is designed to be competing with
In the following 5 Forces analysis I quickly their competition. Their prices are vertically
summed up which would be the strongest and integrated and considered high premium. Due to
what would be their reasons. their vertical strategy in the pricing, they have
- athletic shoes necessary for sports but online across the world. Nike sells its product
other products interchangeable for comfort to over 20000 retailers in almost 200 countries.
- competitive products all compete on dif- ASIA and other operational unites around the
ferentiation globe.
- strong and well established brand name Endorsements with athletes, commercials, news-
- high capital requirement papers, online and in “person” via events. Due
factories
The marketing strategy of NIKE consist of a and evaluates a company´s credit risk. A score
high investment into commercials and product of 1.81 or less is not good and a score of 2.67
promotion. Further explanation by using the or greater is an indication for the company´s
Nike started selling sport goods in 1979 and is 10,93171964 which indicates that NIKE is a
and equipment products. All of these products In the following image you can see the ALTMAN
PRICE
In the upper two images you can see the financial analysis calculations, which have been the founda-
tion for my previous statements. The first one is a general overview over year 2014, like a zoom in,
the second one are an overview of all numbers from the last ten years which were published about
CONSUMER
PERCEPTION
NIKE NON FIANCIAL KPI
CARBON FOOTPRINT
greenhouse gasses.
NNOVATION
of things.
MARKET SHARE
NIKE´s Market Share has raised 3.8%
therefore leading.
ORGANIZATIONAL STRUCTURE
NIKE worldwide.
Appendix Adidas by Camilla
Company profile
Adidas works in a unique way to help athletes perform better, play better, feel better. Their products are
breaking records, setting trends and making history, every day all over the world. This is the Adidas group.
“We strive to help you perform at your best. Your success is our ambition. Your defeat spurs us on to be
better” is the simplest thought of their products. It doesn’t matter it you’re the fastest person or all about
Their consumer’s brand love is because of the employees of Adidas and their passion for the brand, their
vision, mission and culture. With dedication, commitment and team spirit.
Adidas is currently employing more than 53,731 people divided over 160 countries, producing more than
Thinking that no one should be reduced to just one of many facets and talents. Adidas serve a multi-
brand strategy enabling Adidas to do just that, grabbing opportunities from various points in the market, as
both a mass and niche player. Providing distinct and relevant products to either the sporting fanatic or just
and shareholders
47
Strengths Weaknesses
OPPORTUNITIES THREATS
- A growing demand in sporting goods and their - Increasing raw material costs
- Increased interest on the female sporting market - Continuing challenges in import and export duties.
- Strong competition
48
49
Balanced Scorecard
50
51
Strategy analysis extra
ADIDAS STRATEGY
According to the corporate strategy of Adidas their focus is based on innovation and giving the market a
new product to talk about. But their focus is not only in the product itself, their focus goes beyond that
and into the services offered and processes made in order for them to keep their market share. As in
2009 Adidas changes a structure and went from being an vertically integrated brand structure into a func-
tional multi-brand strategy with sub brands such as Reebook.
Implementing the multi-brand strategy they created a diverse brand portfolio, which has allowed them to
cater all segments of the market. Keeping a unique identity and concentrate on their core competences.
52
Adidas keeps a focus on investments in marketing, supply and distribution in different countries by con-
stant evaluation of consumers buying behaviors and keeping their shelf space. Adidas embraced the e-com-
merce business understanding the efficiency and appeal of the consumer they have put in a click and
collect function, making their customers able to order online and pick up in store. Therefore if something
would be wrong with the order or the shoe the consumer would get immediate help. Adidas sets their sup-
ply chain as a key point indicator by OTIF(On-time In-full) measuring how many orders comes on time and
keeping the level of supply on 80% On-time In-full, achieving a new level of efficiency. The supply chain
is also very closely communicated which helps them to customize their products to an appeal for a wide
range of customers.
Adidas set six key strategic pillars to understand their choices and priorities in investments:
- embracing a multi-brand strategy, prioritizing the difference in needs, habits, fitness level, motivation and
- Being both a mass and a niche player applying their competencies in a goal-oriented manner reaching a
larger target market, and allowing them to set and respond to trends in an efficient and effective way.
- Targeting the leading market position in both the mass and niche market.
- Prioritizing the investments based on those markets that offer the best growth and profit opportunities.
While expanding the activities in emerging markets, such as China and Russia, and building market share in
- Tailoring the distribution strategy to present the brand to the consumer in the most effective and effi-
cient way.
- With speed and agility setting as their key elements to outpacing the competition.
- Shortening creating and production lead times by continuously improving the infrastructure, processes and
systems.
- Connecting and integrating all the elements of supply chain in a more efficient way, they are able to
- The founder of Adidas Adi Dassler developed the first shoes back in the 1920s, setting the attitude of
innovation in not only the product but in every part of the brand.
- Fostering a culture of challenging convention and embracing change, as a requirement they set that all
areas of the Group to generate at least one new meaningful innovative improvement per year.
- Continuously shaped by the influences from the past and the present as well as their future goals and
aspirations. Focused on the founders commitment to the athletics, pride, quality and love of sport.
53
- Fostering a corporate culture of performance, passion, integrity and diversity at the work environment
stimulating innovative thinking, team spirit and achievement based on strong leadership and employee en-
gagement.
- Committed to find the right balance between shareholder interest and the needs concerning their employ-
- Reporting publicly on the steps their taking to have a positive impact on society and the planet.
1. Wholesales & franchise; driving a long-term partnership with dynamic retailers, sporting good chains,
department stores, buying groups, lifestyle retail chains e-tailer and franchisees. With this focus their cre-
ating a joint effort on early trend identification, joint campaign planning, shared inventories and seamless
consumer journeys.
2. Direct to consumer; a new differentiated and consistent customer service model with concept stores and
3. Key cities; focus on their key selling points and cities, making sales more efficient and effective by tak-
ing action.
4. Omni-channel strategy; using click and collect a purchasing method where you buy online and pick it up
in store. Integrating different customer data bases such as global CRM/Loyalty program.
5. Speed; taking immediate action when responding to sell-out and new lifestyle & fashion trends, creating
6. Innovation; using big data to analyze and generate actionable insights on the consumer demand, work-
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FINANCIAL ANALYSIS: RESEARCH
With researching into Adidas and their financials all the way down to 2007, giving some conclusions on
findings and research from the annual reports from 2011 up to 2014
2011:
- sales went up 13% this year, and just the brand Adidas had an increased sales position of 14%
- the gross margin decreased 0,28% from 2010 when it was 47,79% to 2011 being 47,51%
2012:
- Gross margin improved by 0,2 pp, despite significant pressure from input costs
- Management purposed a 35% raise of the dividend of the share from €1,00 per share up to €1,35 per
share by 2013
- Accounts receivable increased due to the groups business reduction in allowances for doubtful debts due
2013:
- Dividend per share went up 35% to €1,35 per share from previous year standing at €1,00
- Revenue increased by 3%
- Management want to keep the operating margin between 8,5% and 9,0% the following year
- The gross profit margin went up because of favorable pricing and regional sales mix.
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2014:
- Sales increased 6%
- Gross margin decreased 1,7% points to 47,64% due to negative currency effects, higher input costs and
- Group inventories went down 4% as a result reflecting the focus the group had on inventory manage-
ment.
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Organizational structure
Adidas is based on 3 structures; functional, divisional and matrix
This strengthens the organization within specializations and productivity, as it is possible for employees to
strengthen their skills and performance. Because of the expertise, the employees can perform tasks quickly
Divisional structure: this is needed for Adidas to have companies in different geographical areas.
By using a divisional structure Adidas allows the different geographical areas to focus on their markets
with a leadership that supports them. And allows them to focus on the culture and product portfolio, mak-
Matrix structure: as the employees are both required to report to their functional and product managers to
Using the matrix structure Adidas creates a company culture that brings the employees and managers from
separate departments to work together The Matrix structure combines the functional and divisional struc-
tures of a company.
57
Supply chain analysis
Most of the production at adidas is outsources. They work with 1200 independent factories around the
With a multi-layered and global supply chain, it created new types of partnerships. Some are direct con-
58
Appendix ASICS by Veerle
Strengths Weaknesses
o Has it’s own training app, MY ASICS o Is only focusing on the countries where they are
Opportunities Threats
o Applying E-business in the distribution channel o Indirect competitors are entering the sport
59
Business model canvas Key activities:
o R&D
o Stores
o Social media FB, Instagram, twitter o Physical: employees, sponsored Pro’s, Teams
o Financials: shareholders
Customer segments:
o Sales o Salaries
o Events o R&D
innovation, developemts)
60
61
Organizational structure
Asics has a flat organizational structure, where managers have a lot of responsibilities. This lets the em-
ployees be more involved in the companies situation. Moreover, they get more involved in all the sections
of the business. This is an advantage for the company, because this creates a whole and the concept is
The board of directors include important stakeholders, whom can create opportunities for the company.
Next to that, they have great knowledge in different markets. The board of directors is also the final re-
sponsible for the CSR & sustainability departement. They will be integrated and supported by the manage-
ment teams.
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Marketing mix 4 P’s
product:
Where Asics is creating sports wear and accessoiries for the whole sporting segment, they are focussing
mainly on the footwear. Their products are in a broad range of sports orientated. By focusing on a niche
of the segment they want to be the best in this area with being the most innovated and developed one
with applying technologies and best fittings. Next to the tangible products they also offer the service of the
app MY ASICS, which is a free app for runners to create their personal training and tracking down their
own performances.
Price:
Price is the only one in the marketing mix which let ASICS make profit, with their tangible products. Target-
ing the middle-upper to upper segment ASICS want to reach people who want to buy performance prod-
ucts. The reason for this choice is made by the psychological underlying thought of paying for quality. If a
shoe is to cheap, people will refuse to buy the shoe. However, they focus on different price segments to
Place:
Asics has different distribution channels, where different third parties are playing a big role such as depart-
ment stores, multi brand stores and smaller retailers. Since a few decates they also have their own flagship
stores around the world selling their brands ASICS and Onitsuka tiger.
Promotion:
They are mostly known by promoting sportmen, teams and events. Next to that, they have promotors in
every flagship store, which will promote and introduce the customers to the products face to face. Howev-
er, their is a lack of promotion in the way of advertising through magazines or television. This makes them
63
Financial analysis extra
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65
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