The story of Adidas all began in a small town in Bavaria, Germany in 1945. It is said that on the same day that Adidas was registered, the soon-to-become famous adidas 3-stripes which is still worn by millions today was also established. The German company experienced enormous success in its early years by targeting sport users and creating sponsorships with famous athletes to promote its brand. They soon became the top leader of the sport industry. Despite Adidas initial success, they would soon experience obstacles as new competition emerged and began to threatened its position in the market for years to follow. As companies such as Nike and Under Armour began to take Adidas spot as in the market, Adidas revenue also dropped putting the German company in a very difficult position moving forward.
Sudden Turnaround
What caused Adidas sudden growth?
Despite its years of decline, Adidas has recently experiences an tremendous turnaround this year. According to News.com.au, Adidas so far in 2016 has reported huge sales growth with sales up 13 percent over year and year and impressive earning growth with earnings per share up 98 percent. In addition, Adidas stock is up this year, while competitors such as Nike and Under Armours are down.Adidas has recently gain publicity for its partnership with athletes such as Dever Brocos player Von Miller and musicians such as Kanye West and Pharrell Williams. This strategic partnership has dramatically changed its position in the market as Adidas is now moving beyond creating only athletic wear but rather everyday wear. The iconic Superstars and Stan Smiths have gain huge attraction this year as many famous figures have been seen wearing the original Adidas sneakers. This has had a huge impact on Adidas sales this year.
The Future of Adidas
In addition to the new marketing strategy, Adidas has also experienced a change in leadership. With the old CEO stepping down and the introduction of a fresh new leader, Kasper Rorsted, investors are excited over what growth this could bring to the company moving forward. Rorsted past experience with divesting companies non-performing segments and brands to focus on those driving earnings has attracted investors, as they hope that he will bring this knowledge to Adidas where many of its current segments are nonperforming. Investors believe that this could significantly help Adidas regain its spot in the market by outperforming the current leaders Nike and Under Armour. It would also help the company move its focus to the US market which is critical for the growth of the company moving forward.
Sources:
http://fortune.com/2016/08/04/adidas-outperforming-nike-ua/http://www.adidas-group.com/en/group/history/http://www.news.com.au/sport/american-sports/adidas-hits-nike-where-it-hurts/news-story/997a9ea6f0cdb42bedba9bec88ebce4a
Team 4: Florine Bonduelle, Shensheng Dai, Arthur Jourdan, Erin Palmeter, Joséphine Peyre
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