Collette Maroussia Dubois Edouard Thonet Benjamin Van de Moer Anouk Strategic analysis Impossible is nothing Collette Maroussia Dubois Edouard Thonet Benjamin Van de Moer Anouk

Agenda A Brief History About the Market Focus on Adidas Segmentation & Offers Evolution around the world What are their challenges ? Business Model Complexity of the supply chain Q/A

Adidas, from birth to multinational corporation Foundation in 1949 by Adi Dassler 1970: Becoming a a true multisport specialist : more and more athletes trust adidas 1997: Acquisition Salomon Group 1995: Adidas group goes public 2001: New and current CEO Herbert Hainer: focus on innovation 1992: Death of Dassler: changing leadership 1993: New CEO: marketing driven company 2005-2010: Acquisition of reebok, five ten and taylorsmade. Salomon leaves the team 2013: endless innovation: energy boost running shoe

Adidas group AG today’s missions & values Performance Passion Integrity Diversity Adidas AG Reebok Adidas Taylor Made Rockport Adidas group AG focusses on brands with the same values Source: http://www.adidas-group.com/en/group/stories/

In wich market is operating Adidas? Market in 2014: 245 Billion $ Sports apparel Athletic footwear Sporting goods equipment Apparel: all kinds of clothing Footwear: sport and desing shoes Equipment: sport accessories

Main players in the market Focus on marketing: 2,75 bn $ expenses in 2013 11% of revenue 13,6% 56,500 19,83 9,5% 2,3% Market Share 50,728 10,982 Number of employees 14,5 2,99 Net sales 2013(bnE) Less spending on marketing: 1,45 bn € in 2013 9% of revenue Enormous focus on marketing: 544M € 18% of revenues http://www.reuters.com/article/2013/10/02/us-adidas-reebok-strategy-idUSBRE9911BZ20131002

Current trends in the global sportswear market Focus on high potential markets Enter emerging markets succesfully (China) Have a diverse brand portfolio Match every clients needs Have a flexible supply chain React quickly to changing consumer trends Constant innovation Be constantly at the cutting edge technology Be a sustainable company Satisfy shareholders, employees and partners + have a positive impact on society and the planet

Adidas’ own product segmentation & offers 1st segmentation Segmentation of the different product categories Adidas’ total sales Sport performance Sport style 2nd segmentation 75% Segmentation of the offer to the client 25% http://www.adidas-group.com/en/group/strategy-overview/

Adidas sales evolution around the world Clear influence of emerging markets: China and European emerging markets become a market of their own http://www.adidas-group.com/media/filer_public/ad/51/ad51977b-b143-4081-a8ba-e3f6ee5ea6f6/roadshow_q3_2014.pdf

The challenges Adidas has to face Need in innovation Embrace change and new technologies High R&D investments: 128 M € in 2013 Battle with competitors Fast growing emerging markets Problems linked to weak currencies ex: the Russian rouble Focus on investment in Russia and China Be a sustainable company for the environment Reduce relative environmental footprint by 15% by 2015 Need to have a credible Group Environmental Policy Better policies in case of child labour Supply chain control Complex problem of fair wages within the supply chain: Adidas should enhance its bargaining power Building a market share in the underpenetrated markets such as the United States (20% Adidas vs. 41% Nike) http://uk.reuters.com/article/2014/03/05/uk-adidas-results-idUKBREA240DT20140305

Adidas’ current business model Key partners AFIRM working group Better Cotton Initiative Production outsourced ZDHC FLA Key activities Sporting events Sport performance Sport style Sponsoring athletes Value proposition Innovation & cutting-edge design Be a sustainable Company for stakeholders Diverse brand portfolio Quick reaction to consumer trends Distribution channels Wholesale (66% of sales ) Retail (25% of sales) Other businesses (9% of sales) Customer segments and relationship Athletes or passionates about sports (20-29 years old) high school athletes: next generation of athletes (14-19) Occasional runners Adidas Group Customer Care Center

Complexity of the supply chain Product design & research and development Germany Manufacturing and production of shoes, apparel and equipments. 90% outsourced, mainly in Asia. Adidas Group Agent Supplier Licensee Sub-Contractor Challenge: Creating a flexible supply chain Source: www.adidas-group.com

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Q/A