UNIVERSIDAD AUTÓNOMA DE NUEVO LEÓN

Facultad de Contaduría Pública y Administración

International Business

Strategic Management

2.1 Case analysis: Adidas in 2009: Has corporate restructuring increased

shareholder value?

Group 9Bi

Guerrero Ramos Jennifer Ivonne 1816241

Gutiérrez Martínez Andrea Marlene 1866736

Hernandez Gomez Mariana Monserrath 1811396

Montoya Ramírez Devany 1853408

Ramírez González Dayan Monserrat 1845668

Villaseñor Martínez Karely Nataly 1866132

March 11 st, 2023

 Introduction

The importance of a case analysis is more interesting than it might seem, since it is where the
defects of a specific topic are sought in order to deduce the problems that it has had or could
have. In this document we are trying to explain how we did our project, looking in different
sources of information in order to explain the analysis of the case that we did in which our
purpose is to leave knowledge in the audience that can visualize this project. After an
in-depth analysis, it should be noted that a case analysis takes time, effort and in-depth
investigations to reach the purpose and reach a conclusion.

A complicated but very interesting case is the case of Adidas, which we stopped to
investigate in depth a bit of the history behind this great shoe company and that has become a
millionaire company over the years, Hoping that everything explained is to the liking of each
person and that this can leave a clear and understandable knowledge.

We will talk a little about each problem that this company could face and likewise we will
provide a solution for each of the problems that could arise. This article faces the
complications of each scenario that this company could present itself as a solution to these,
using a methodology that is in accordance with each problem and each solution. It is a very
interesting case which could leave many things to learn and also to help reinforce our abilities
and skills to solve problems with a workable solution.
 Background and general analysis of the company

Adidas
The history of Adidas starts when German baker Adolph (nicknamed Adi) Dassler began
designing and producing footwear for athletes competing in sports like soccer, tennis, track
and field events. Then, 4 years later his brother Rudolph joined him in shoemaking and they
named it Gebruder Dasler Schuhfabrik (which means Dassler Brothers Shoe Factory).

The Dasslers made their first major innovation in athletic shoe design in 1925, they continued
to develop key innovations and ended up accumulating 700 patents and property rights
worldwide which we use in today's footwear.

In the 1928 Olympic Games in Amsterdam, they gave their shoes to German athletes
competing and by the 1936 Olympic Games in Berlin, most athletes would compete only in
Gebruder Dassler shoes.

The Dassler's sports shoe production ceased during World War II when Rudolph was drafted
into the army, he came back in 1847 and they continued with the company but in 1948 the
brothers entered into a bitter feud so the enterprise dissolved.

Then, Rudi established his own shoe company named Puma Schuhfabrik Rudolph Dassler,
while Adi renamed the company Adidas - a combination of his nickname and the first three
letters of his last name. This of course created a rivalry for Puma and Adidas for the rest of
their life. At the time of Adi Dassler's death in 1978, Adidas remained the worldwide leader
in athletic footwear.

Main actor for problem solving

Like every organization there is always a problem and it is important to identify those
problems, know who would be solving it and how. In this case, the main actor for problem
solving is Adidas’ management. Also, everyone involved in the company should put effort on
their opportunities to grow and that would help the organization to become more successful
and have more growth.
Nowadays, Adidas is a very famous brand but it is essential that they keep doing hard work
so they can continue being this good in the market.

Problems involved

As we know Adidas is a worldwide recognized sport shoes brand that has been in the market
for a long time but they have been through a lot of economic problems too, such as poor
financial performance, bad investments, market losses, etc. all of those inconveniencies have
help the brand to improve themselves and create a consolidated company.

Some of those problem were caused for bad decisions and this has been happening since the
beginning , an example of this is when founder Adi Dassler and his son Horst,
underestimated the entrance of nike in the market because they were more concerned about
his cross-town adversary Puma and this caused a big loose in the market.

They also passed on the opportunity of signing up the most famous NBA player Michel
Jordan and of course, Nike took the opportunity and since then, this collaboration has been a
success.

Another cause that worsen the situation was the acquisition of Salomon SA was no carried
out as planned and it brought losses to the company

Their company, TaylorMade Golf, suffered a decrease in sales and customers since the
number of golfers in the US declined from then $27 million 1198 to $25.6 million in 2008.

Hierarchy

1. The acquisition of Salomon SA was no carried out as planned

2. Founder Adi Dassler and his son Horst, underestimated the entrance of Nike in the
market
3. TaylorMade Golf suffer a decrease of sales and customer since the number of golfers
in the US declined from than $27 million 1198 to $25.6 million in 2008
 4. They passed on the opportunity of signing up the most famous NBA player Michel
Jordan

Main problems.

For Adidas the acquisition of Salomon was a great option to become and develop into the
world's leading sports brand and a merger was agreed that would go beyond sports footwear.

Salomon SA was a company that sold ski equipment, golf clubs, bicycle components, and
winter sports equipment. This company contained a variety of solid businesses and had very
positive numbers. Adidas acquired Salomon SA in 1998 believing that they would make a
profit and position the company as the number one in the industry.

This acquisition for 1.5 billion euros allowed the company to position itself as the second
largest company in the industry behind Nike.

However, people were not convinced because the high costs that Adidas had to pay to
Salomon seemed unrealistic for the company and they were worried about how they would
finance the acquisition. Investors became concerned because of Adidas' lack of experience in
winter sports.

This generated a loss of approximately 165 million euros during the first 9 months of the
acquisition.

Alternatives to find a solution

● Review and adjust corporate strategy regarding regional growth, market sector, and
business alignment.
● Divest the Salomon business units as part of a restructuring strategy.
● Maintain the marketing strategy, specifically advertising, and extend it to the
company's other brands.

Most convenient solution alternative

Maintain the marketing strategy, specifically advertising, and extend it to the rest of the
company's brands.
 Implement solution

To implement it, one must be aware that the losses that Adidas obtained were due to
investors' fear that the purchase of Salomon would not work and the loss of opportunities that
it had by not signing with Jordan.
It can be implemented by collaborating with artists currently recognized by anyone in the
world, also using the most current social networks such as Tik tok to create advertising with
influencers and with the company.
Thus, we know that winter sports are very few known, so a market study must be done where
publicity can be created for this specific case.

List expected results

1. Growth in sales in the different brands of the company.

2. A recovery of at least 30% after implementing the strategies.
3. Investor growth after showing stronger sales strategies.
 Conclusion

In conclusion, we can sum up that Adidas has been such a good company that has stayed in
the shoe market for decades, surely they went through some administrative, economic,
familiar, etc. challenges since the beginning such as the second World War, the fight of the
two brothers, the Salomon acquisition, the customer lose against Nike, etc. as we saw in the
text.

Despite all of that, they have known how to stay in the market with new innovations,
collaboration with celebrities, marketing, etc and all of that help them to improve themselves
and get knowledge in how to manage the company in order to have higher sales.

Also, with the analysis we could saw how they manage every obstacle and how they get
through it and this help us to get an idea of how big companies handle situations that are
harming the company like when they bought Rebook when had a bad reputation with quality
and was not a good brand for sport representatives and they turn the brand in a family brand
focus on woman and with a good relationship with hockey and baseball leagues.

Nowadays, Adidas is one of the principal companies and factories in the sports and daily shoe
market based in Germany along with Puma , with NIKE, Skechers USA and Wolverine
World Wide all based in the USA, Yue Yuen based in China, and a subsidiary of Pou Chen in
Taiwan.
 Bibliography

Thompson (2015). Crafting & Executing Strategy - The Quest for Competitive Advantage:
Concepts and Cases. McGraw-Hill, 20th Ed.