Adidas Industry Analysis

Adidas athletic shoes

1.

General History

The global footwear market is a growing market with an increase in consumer demand based on globally increasing consumer incomes. The sports footwear market is significantly characterized by the high speed of innovation, which forces the companies to invest more in development initiatives. At the same time the companies are trying to reduce costs through decreasing supplier prices in order to stay competitive. Looking forward, the footwear market is expected to steadily keep growing.

The Adidas Group is a worldwide operating German sports apparel manufacturer with its head office in Herzogenaurach. The company was founded in August 1949 and named after its founder Adolf (Adi) Dassler. With the winning of the World Cup 1954 in Bern by the German national team, the Adidas soccer shoes became world-famous. The German team played with Adidas soccer shoes where you could replace the studs вЂ" a new innovation in those days. In the following years Adidas expanded its production beyond athletic footwear and produced sportswear and equipment. In 1989 the company became a corporation. In 2006 Adidas took over their British rival “Reebok” with the goal to accelerate its drive in the U.S. market and to approach Nike, the world market leader in the athletic footwear industry. Today, Adidas is still trailing Nike. The Adidas Group consists of the brands Adidas, Reebok and Tailor-Made.

Important past trends:

Adidas has always been a company that stands for revolutionary inventions in the athletic shoe industry. Adidas reported in 1996 one of the most successful years in its history after implementing new sales and marketing strategies. This could only be topped in 2001 where Adidas-Salomon achieved record-breaking sales. Another significant trend lies in long-term sponsoring contracts that Adidas gained within the last few years. In April 2006 they signed a contract to become the official NBA apparel provider for the next 11 years. Moreover it was announced in September 2007 that Adidas would become the official sportswear provider for the Olympic games.

Major players

The major players in the athletic shoe market are Nike, Adidas, Reebok, New Balance, and K-Swiss. In the first quarter of 2004, Nike had the biggest market share with 40%. New Balance held the number-two spot with 11%. Reebok was ranked third with a little over 9%. Just behind them was Adidas with 9%. K-Swiss brought up the rear with 3.5%. These numbers are quite different from those of 2000. Nike still had the lead with 39% with Adidas holding the number two spot with 15.1%. The number three spot was held by Reebok with 10.9%. In fourth, New Balance had a market share of 9.4%. K-Swiss was 5th with a market share of 3.6%

New Balance has done very well and gained a large portion of the market share pushing out the previous second placeholder Adidas. While it would appear that Adidas has lost market share as a brand, the company bought Reebok. As a corporation, in 2004, Adidas held 20% of the market share between the two brands.

Technology/social/legal- brand

Adidas as a brand are utilizing a few forms of technology. Adidas shoes can be purchased online. When products are purchased online Adidas makes sure to protect you from identity theft. This gives their customers assurance when purchasing their products.

Adidas has established a new technology in their shoes called “Mega bounce”. This product is used to enhance your shoe experience. This shoe bounces with every step to give you more comfort and support. Adidas has to compete with large companies like Nike everyday. They try to increase their market share by using celebrity endorsements. Missy Elliott and Stan Smith each have their own line of shoes.

Adidas is constantly fighting to retain intellectual property rights as well as eliminating knock-off versions of their products. With Adidas being a multi-national company, they are required to adhere to different laws in different countries.