- The German sports apparel company Adidas (Reebok) is facing an uphill battle in competing with Nike, the industry leader. For the past four years they have been experiencing falling revenues as they have failed to reap any benefit from its acquisition of Reebok in 2005, suffered recent losses of prestigious college contract bids to Nike and Under Armour, and loss of market share in the US which is where sportswear trends are born. However, the Egyptian tycoon, Nassef Sawiris and US investor Mason Hawkins believe in its future and formed an investment partnership to drive change. This, along with immediate improvements from third quarter financials has given the company and investors reason to be optimistic.
Some of their recent developments include:
- The development of a five-year turnaround strategy,
- Constructive talks and directives with management and investors on major changes, including the need for quickly finding a successor for CEO Hainer (leaving in 2017) who has been in charge of Adidas since 2001,
- The potential sales of its some of its non-core businesses such as golf (TaylorMade) and hockey divisions (Reebok – CMM), and
- Focus on core business with additional marketing, speedier supply chain and share buybacks helped third quarter results showed revenue up 13% and net income grew 20%, with revenue growth of 14.2% in Western Europe and 18.4% in China.
Corporate and the new investors have vowed a rapid makeover to include changes to its market presence, product lines and operations.
The success of new strategic actions is critical as it will impact Adidas’ ability to maintain a strong presence in a highly competitive industry in the future. Conduct research on some of the strategies they are implementing and on trends for the sports apparel industry and 1) determine what are some of its biggest problems or the key issues it should address, 2) suggest some key goals and objectives, 3) corporate/business level strategies, and 4) a few supporting and corresponding functional level strategies that could help management continue to improve Adidas’ results and boost its reputation in this competitive segment of the global sports apparel industry. Include citations for your research. This can be done in bullet format and by being direct and succinct, but make sure you support your suggestions; tell me ‘how’ and ‘why’. This should be no longer than two pages.
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