Team Robin Castillo Sirrea Hayes Beth Nichols Ofe Walker Nike vs. Adidas Team Robin Castillo Sirrea Hayes Beth Nichols Ofe Walker

Mission Statements Nike To bring inspiration and innovation to every athlete* in the world * If you have a body, you are an athlete Adidas To be the leading sports brand in the world *Impossible is Nothing http://www.youtube.com/watch?v=EPO20PkSztE The adidas brand attitutde:

History Nike 1964: Bowerman/Knight 1970: Waffle Iron 1972: Swoosh 1980’s: Sport Celebrity Endorsement & Growth Adidas 1920’s-30’s: Dassler 1954: Soccer 1960: 3-Stripe 1984: Summer Olympics & Mainstream popularity Nike 1964: 1970: revolutionized the running shoe using a waffle iron to make the shoe tread 1972:Swoosh-Caroline Davidson-Artist who designed the Logo 1980’s: Steve Prefontaine-long distance runner, Michael Jordan-Nike Air, Bo Jackson-cross trainer, Tiger Woods-Golf 1989-Nike became Industry leader Adidas Dasler-started making shoes-11 sports and 30 styles of shoes by mid 1930;s 1954: German Soccer team won Soccer world cup 1960: expanded athletic balls and clothing: Brand Recognition with 3 stripe design 1984: 89% of the teams wore adidas shoes-expanded into equipment-Celebrity endorsements such as Modonna (Not sports figure)

Key Leaders Nike Chairman of the Board: Phil Knight CEO Nike: Mark Parker CFO: Don Blair President Nike Brand: Charlie Denson Global Operations: Gary M. DeStefano Adidas CEO Adidas-group: Herbert Hainer Finance Adidas-group: Robin J. Stalker CEO Adidas brand: Erich Stamminger Global Operations Adidas-group: Glenn S. Bennett

Industry / Products Nike Athletic Shoes Apparel Sports Equipment Accessories Adidas Footwear Sportswear Sports Equipment According to Market Research firm NPD Group-The Running shoe market in America is $ 5 Billion annually

Business Structure Nike NIKE Five Subsidiaries Adidas Two Subsidiaries Cole Haan Converse Hurley International NIKE Golf Umbro Adidas Two Subsidiaries Reebok TaylorMade Nike Nike brands – football, running, training, basketball, and originals (two divisions that reflect two distinct market segments – sport performance & sport style) Cole Haan – dress and casual footwear, apparel, accessories for men and women Convers – premium lifestyle men’s and women’s footwear and apparel Hurley International – action sports apparel for surfing, skateboarding, snowboarding and youth lifestyle apparel and footwear NIKE Golf – golf equipment, apparel, balls, footwear, bags, and accessories Umbro – designs, distributes, and licenses athletic and casual footwear, apparel, and equipment for soccer (includes exclusive endorsements and distribution rights for playing kit, apparel and equipment, including playing and training kits for England’s National Team Adidas Adidas-2 div sports performance (football, running, training and bskball) Sport Style: Street fashion to High fashion- Reebok-global brand-own women’s fitness and challenge men’s sport category (hockey and rockport) TaylorMade ALL GOLF: adidas golf (serious golfers equipment & shoes) and Ashworth Upscale golf sportswear pro-shops, golf resorts & specialty stores-NOT Walmart

Market Segments Nike Adidas Running Sport Performance Sport Style Golf Footwear Clothing Golf Soccer Adidas Sport Performance Footwear Sport Style Clothing Nike: has segmented into Specific market divisions. Segment division manager is responsible for their owns segments. They can not blame the Mktg department for poor sales, because the Mktg department is under their leadership.

Competitive Strategy Nike Premium Price Strategy Sponsorship Agreements No Manufacturing Adidas Premium Price Strategy Sponsorship Agreement Adidas & Nike clearly position themselves as a top notch brand in all markets Nike: Celebrity athletes & college and Professional teams. Adidas: Niketown

Core Competencies Nike Outsourcing Adidas Implementation of Joint Operating Model in Europe Nike By outsourcing Nike has taken out supply chain cost in manufacturing, raw materials and Labor Cost. Adidas: 2009 restructure in Europe to eliminate regional offices

Distinctive Competencies Nike Adidas

Competitive Advantages Nike Adidas

Industry Trends / Key Issues Nike / Adidas Sales are Flat Low Consumer Confidence in the Economy China accounts for 68.3% of imports – low manufacturing costs: labor costs is primary. Overall: trend is decreasing, particularly in the US, even though revenues were over $5 billion in 2008 Weak Sales-due to consumer confidence

Global Issues Nike 2008: Trade Deficit with China Adidas 2008: Global Sports Partnerships 2009: International Day of Peace 2009: DJSI Winner Nike: 68% of all shoes sold in the US are manufactured in China Adidas and Puma the employees played football for the United Nation’s International day of Peace—an annual day of cease fire and non-violence. 1st event in 60 years. Adidas: Dow Jones sustainability indexes (DJSI) rated industry leader in sustainability issues and corp. responsibility 7th time in a row, 10th time recognized. Adidas: Global Partnerships: include: NBA< WNBA. Development league, Germanys football association, Russia Football Union

International Ethical Issues Nike / Adidas China: Child Labor Critics charge that China uses Child labor in factories

Sales Strategy Nike Nike.com United States: 25,000 Retailers International: Distributors, Licensees, and Subsidiaries Adidas Nike – sells in 160 different countries

Key Customers Nike Adidas

Key Competitors Nike Adidas New Balance Athletic Shoe, Inc PUMA AG Rudolf Dassler Sport Adidas Nike Amer Sports Corp Callaway Golf Company Puma was started by Adi Dassler brother Rudolph originally manufactured together until the companies split. ***Nike is the largest sports and footwear apparel company in the world.***

SWOT- Strengths Adidas Nike 3-Stripe Logo Swoosh Logo Purchased Reebok to gain presence in North America Leader in Corporate Responsibility & Sustainability Buyer Loyalty Nike Swoosh Logo Innovative Technology Focus LIVESTRONG Campaign Niketown Conservative Finances NIKE Innovative technology focus with Flywire and Lunarlite, reduced wt by 18% (shoe and wt experiment-demo) Livestrong: $80million has been raised for cancer so far 1984 -(Nike Factory Stores) In 1990 created Niketown: 30,000 sq ft, interactive immersive environment: Closest store: Michigan Ave, Chicago, IL Stores in Hollywood CA,San Franscisco CA, Las Vegas NV, New York, NY, Uk, London Nike did some lean thinking, perhaps a 6 Sigma project and were able to hold the bottom line 2nd quarter 2009, even though revenues are down, but Nike is looking better than their competitors and are gaining market share by being conservative: Job Cuts, Inventory Mgmt and spending less on Marketing-

SWOT- Weaknesses Nike Male Dominate Executive Board Labor Costs Adidas

SWOT- Opportunities Nike Growth in Men’s Footwear Recent Growth in US Market Share Adidas Grow Reebok men Continue Partnership Development

SWOT- Threats Nike Under Armour Economy Adidas Economy US Market share shrank 2009 Kevin Plank’s CEO for Under Armour had revenues of $725 million in 2008 -cornered the underwear market and now entering the athlete shoe market. Because he is entering the High Tech shoe market. (Under Armour is the only footwear and active lifestyle company whose revenues grew 2nd quarter in 2009 by 5%)

Porter’s – Product Substitution Nike Adidas

Porter’s – Rivalry Nike Adidas

Porter’s – Buyer Power Nike Adidas

Porter’s – Supplier Power Intense competition among suppliers keeps manufacturing costs low Fredeen Knowing Nike’s Customers In 2000 supplier power was LOW Customer’s over-forecasted sales leaving excess finished goods inventory Also Venator, largest footwear retailer in the world, closed 150+ stores like Footlocker If suppliers go out of business it costs companies like Nike money b/c they’ll have to pay more for rush orders or a dominant company could hurt Nike’s profit margin by demanding higher prices.

Porter’s – Threat of Entry Nike / Adidas Under Armour

Financial Analysis Nike Adidas

Ratio: 2 Nike Adidas

Ratio: 3 Nike Adidas

Ratio 4 Nike Adidas

Acquisitions Nike 1995: Bauer 2002: Hurley International 2003: Converse 2004: Starter Brands 2008: Umbro Adidas 2005: Reebok To increase market share in North America Adidas acquired rival Reebok for $3.8 billion

Divestitures Nike 2007: Starter to Iconix Brand Group 2008: Bauer Hockey to Kohlberg & Co Adidas Nike: Iconix 60 million cash purchased 2004 Bauer $200 million purchased in 1995

Current Events Nike Adidas 2009: Cirque de Soleil 2012: London Olympic and Paralympics Partnership Adidas: Cirque de Soleil

Sustainability Nike Adidas

Strategic Direction / Changes Nike 2007: LIVESTRONG Challenge http://www.youtube.com/watch?v=RDfCTJQTpXs 2009: Profitable Stock Split 2 for 1 Adidas 2008: Beijing Olympic Partnership 2009: Business Realignment 2009: Sold $15.7 million shares of stock 2009: Cirque du Soleil Partnership Nike Whole website, join the team, share your story: walk, run, ride or tri with Team Livestrong (ON LINE Presence) Adidas: 2009: New Restructure: Review key operations: wanted to be faster, effective and more flexible: Joint operating model, Adidas/Reebok eliminated one complete level of management “the regional office”, New view: Global direct to local. 2009: Sold stock to cover bond debt in order to reduce company debt leverage 2009: example: if stock $100 and now worth $300, give stockholders more shares rather than having increase the stock and everyone running and selling the stock and devaluing the company

Recommendations Nike Adidas

M Nike Adidas

Bibliography Adidas – Impossible is Nothing. (2006, May 10). YouTube video posted by sktube. Retrieved November 27, 2009 from http://www.youtube.com/watch?v=EPO20PkSztE Fredeen, B. (2000, Feb. 1). Knowing Nike’s Customers. Retrieved November 18, 2009, from Fool.com. Footwear Industry in USA. (2008). Retrieved November 22, 2009, from http://www.infomat.com

Bibliography Hoover’s Inc. (2009). Company Discriptions. Retrieved November 22, 2009 from http://www.hoovers.com LIVESTRONG Challenge 2007 Video. (2007, June 1). YouTube video posted by livestrongarmy. Retrieved November 27, 2009, from http://www.youtube.com/watch?v=RDfCTJQTpXs Mehta, S. (2009, March 5). Fortune. Under Armour reboots. Retrieved November 28, 2009, from http://www.money.cnn.com/2009/01/20/technology/mehta_underarmour.fortune/index.htm?postversion=2009012613

Bibliography 40 under 40. (2009, October 22) Fortune, Retrieved November 28, 2009, from http://money.cnn.com/galleries/2009/fortune/0901.40_under_40.fortune/index.html Pienciak, M. (2009, September 2009). The Motley Fool. Nike’s still got no bounce. Retrieved November 28, 2009, from http://www.fool.com/investing/general/2009/09/30/nikes-still-got-no-bounce.aspx?source=isesitlnk0000001@mtt=1.00

Bibliography Conerly, B. (2008, February 5). Seeking Alpha website. Nike strategy: divide and conquer. Retrieved October 19, 2009, from http://seekingalpha.com/article/63099-nike-strategy-divide-and-conquer Burke, M. (2008, January 17). Forbes Magazine. On the run. Retrieved October 19, 2009, from http://www.forbes.com/forbes/2008/0211/082.html