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Adidas in 2009 Case Study

History
• In 1920, its founder Adi Dassler made his first shoes using the few materials available after first world war. • In 1949 adidas is registered as a company, named after its founder: 'Adi' from Adolf and 'Das' from Dassler. • In 80s The transition After Adi Dassler's death, Adi's wife Käthe, his son Horst, and his daughters carry on the business. • In 90s With a new management Under the CEO Robert Louis-Dreyfus, adidas is moving from being a manufacturing and sales based company to a marketing company.

• In 1995 Adidas goes public on the Frankfurt and Paris Stock Exchange. • in 1997 adidas AG acquires the Salomon Group with the brands Salomon, TaylorMade, The new company is named Adidas-Salomon AG. • In 2005 The Salomon Group is being sold in October 2005. The new Adidas Group is focusing even more on its core strength • In 2006 Adidas AG acquires Reebok

Adidas Group

Marketing Inovation
Product innovation enabled marketing innovation.
Gave shoes to German athletes in 1928 Olympics

75% of track and field athletes wearing adidas in 1960 Olympics

2 stripe (and later 3 stripe) brand

78% of athletes wearing adidas at 1972 Olympics

External Environment: PEST

Porter’s 5 Forces
Threat of Substitutes Bargaining Power of Suppliers Low Intensity of Competition High Bargaining Power of Buyers High

Low

Threat of New Entrants Low

Nike vs Adidas
Nike Nike emerging in the 70’s Aggressive launch new styles – going after youth and fitness craze Large endorsement contracts – sign Michael Jordan Focused, aggressive, dedicated leadership Outsourcing of manufacturing to Asia Adidas

Innovative leader dies in1978 – quality declines, innovation drags
Dedicated to competitive athletes Passed on Michael Jordan 8 years of management and ownership changes Costly German manufacturing facilities

Adi’s Leadership

Loss Of focus Return to form via restructuring…

Adidas Stock Price
Stock price fell soon after acquisition in 1998, Salomon divested except for Taylor-Made Golf line. adidas overpaid for acquisition.
60 50
Stock Price (in euros)

40 30 20 10 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Year
Adidas Stock Price

Adidas Product line after solomon divested

Reebok Swot analysis for Acquisition