All About AdidasIn 1925, in a small German village, the world got it's first taste of Adidas. It was there, in a village by the name of Herzogenaurach, located 12 miles to the north and the west of Nuremberg, that those simple three stripes were brought to life by adidas' founder, Adolf "Adi" Dassler. Adi created adidas after realizing the need for performance athletic shoes. Adidas began small, producing soccer and running shoes, which ironically enough are still the main products that adidas is known for. Adidas has continued to gain momentum through the years. Many attribute this to adidas' quality, styling and reputation. Adidas is currently the largest supplier of athletic shoes in Europe. Adidas ranks second worldwide, with their products selling in almost 200 countries. In 1994 alone, adidas sales totaled 3 billion dollars. In late 1995, adidas went public with its stock. It was a tremendous success and continues to trade internationally. Adidas posted an amazing 40% increase in net sales in the first half of 1997.
|
EconomicsFrom famous athletes to school kids, adidas wants to help everyone get in the game. The company sells sports shoes, apparel, and equipment sporting its iconic three-stripe logo in 160 countries. The #2 sporting goods manufacturer (behind NIKE) focuses on football, soccer, basketball, running, and training gear and apparel as well as lifestyle goods including SLVR and Y-3 fashion brands. adidas' wholesale division gets adidas and Reebok products to retailers while the retail group runs its own 2,445 Reebok and adidas shops. Also the increase in demand brought about some competition for the Adidas company because more companies are now willing to produce high quality jerseys now that they realize more consumers are interested in this product. However, even with this increase in the supply of the jerseys, Adidas still remains supreme in the production of high quality, professional soccer jerseys, because it offers a lower price than its competitors while still retaining its level of quality. Countries like Germany is a big fan of Adidas, as its main sport is soccer the German government always wants Adidas in producing the finest soccer jersey thus interfering with Adidas. Adidas was able to make 14.53 Billion Euros just in the year 2011-2015.
|
Management
The adidas Group's ultimate goal is to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle. And also to be committed to continuously strengthen the brands and its products. Since Adidas is one of the biggest sport industry brands, it has numerous of managing sections. The main team/section in Adidas is called the Sustainability Team as they are in charge of facilitating, promoting and managing the development implementation of environmental initiatives across the Group’s own facilities. And also to ensure compliance with the Workplace Standards within the adidas Group's supply chain. The second biggest team in Adidas is called the Health and Safety Team where they serve to keep their sponsored athletics healthy both mentally and physically and safe as they pay for their health insurance and mental training once a week as well as having one of the best gyms around the world for their athletes etc. Also this team tends to build the safest work place for its employees, for example in Adidas headquarters has a fireproof carpet and anti-shock plug in cords. Lastly we have the most important team called the Marketing Team who is basically in charge of advertising and creating slogans. One of their most famous slogans, "Be Original" were founded by this team. Lastly, about the CEO, Herbert Hainer was able to be successful because he was money/success hungry as he treated his employees with great charisma and fear. Driving the team to a place of where they are right now. He has shown leadership in numerous of places, for instance he was class president for more than 3 years in his school as well as being a very famous stock and investor before he became CEO of Adidas.
|
This is one of the advertisements done by Adidas during the Olympics hosted in Beijing. As you can see, the player is colored while the background is black and white, also the player is colored only because he is wearing Adidas gear giving the audience the message that Adidas gear grabs great attention as well as making you stand out in many places. Not only that, the people in the background is underneath the athlete giving us the impression that they want the gear so badly that they are trying to grab on to him and drag him down.
|
MarketingPlace:
On the other hand, many multi brand showrooms will also have Adidas apparel’s and footwear on display. These multi brand showrooms get the products from a distributor. The third and last mode of distribution is online. The products are sold through online medium via fashion stores like myntra.com as well as the online website of Adidas. Also due to the excellent brand equity of Adidas, the operating margins are fairly high thereby keeping the distribution channel motivated. A happy distribution channel means better promotion for the company. Price: Apparel’s of Adidas constantly use skimming price and are higher priced due to brand equity of Adidas in the apparel’s market. The target customer for Adidas is the upper middle class as well as high end customers. Adidas never uses penetrative pricing because that will affect the brand equity of Adidas. In fact, the higher price point helps in the price quality approach and psychologically, customers think that a higher price will mean better quality as well. Thus, Adidas rarely drops its prices. Product: Adidas has various products. The major product of Adidas is off course their footwear. Coming in various design and style, Adidas footwear is robust and athletic. The secondary product of Adidas is apparel’s and accessories. Apparel’s like T-Shirts, jackets, sweatshirts, shorts etc are in great demand. Where Reebok is stronger in footwear, Adidas is stronger in apparel’s.The aim of Adidas is to give the best footwear to their customers which has the combination of technology and design. These products are not need based. In fact, the shoes are bought by customers to satisfy their wants and desires Promotion: Adidas markets through various marketing vehicles but the majority of marketing is concentrated on television and product placements. The creative team of Adidas is known to pump adrenaline in their customers through ads which are well made, very creative and filled with energy. These ads attract the customers towards the brand by sending the right marketing message to the customer. The tagline of Adidas “Impossible is nothing” is in itself a very powerful statement for the brand.. The popularity of the brand is because it ties up with the top players across the world such as Lionel messi, Ronaldinho, Sachin tendulkar and various others. At the same time, Adidas also sponsors teams and some of the top teams include Real Madrid, France, Great Britain (in football), England and South Africa (in cricket) and several others. |
Stock and InvestingAdidas started to sell its stock to the public in 1994, as the company started to succeed immensely, and of course many people were buying their stocks since the company was making a lot of money and thought that it was sustainable. Right now the stock of Adidas was boosted by World Cup-related revenue, and was not enough for Adidas to achieve its financial objectives for this year. On Thursday July 31, 2014, Adidas warned that its annual revenue and net income will be lower than expected. According to this press release, Adidas now expects net income to be around €650 million ($858 million), down from an earlier estimate that assumed net income to be in the range of €830 million ($1,095 million) to €930 million ($1,227 million).
Why you should buy Adidas AG Stock: - Adidas lowered its full-year guidance last month. - The shares already declined over 40% this year. - Adidas trades at a discount compared to its industry peers. - The recent pullback could be a perfect entry point for investors. |