кейси для індивідуальної роботи 2014 н.р. / ADIDAS AG IN APPAREL

MARKET ASSESSMENT

Fashion products most dynamic

adidas AG: Apparel Presence and Growth Prospects by Category 2011-2016

Note: Bubble size indicates company share of category in 2011, range displayed: 0.2-5.8%

adidas AG is present across a wide number of categories. Its portfolio is primarily sports aligned; even its

Rockport footwear brand offers “outdoor” products. This means that its core opportunities are in footwear, men‟s outerwear and women‟s outerwear, the largest global categories and adidas‟ key opportunities.

However, women‟s products were the most dynamic for the company in 2011, with sales of women„s outerwear, clothing accessories and underwear, nightwear and swimwear growing by 12.6%, 17.8% and 21.4%, respectively, albeit from a lower base, as the company rolls out more of its adidas NEO stores.

Footwear is the company's core business, generating 60% of adidas‟ 2011 sales compared to 62% in 2006.

However, it was also the least dynamic category for the company, growing sales by 9.1% in 2011. This is still solid growth, but the company may need to investigate ways of adding value to the category in future.

MARKET ASSESSMENT

Well-balanced global presence

adidas AG: Apparel Presence and Growth Prospects by Region 2011-2016

0 100,000 200,000 300,000 400,000 500,000 600,000

Market size 2011 (US$ mn RSP)

Note: Bubble size indicates company share of region in 2011, range displayed: 1.2-2.9%

The scale of Western Europe, Asia Pacific and North America make them the greatest opportunities over the forecast period for adidas. The company has in fact identified Russia/CIS, Greater China and North America as its attack markets, and will focus most on them over the forecast period.

The apparent lack of dynamism in Western Europe is less of a problem for the company, which in its annual report claimed to have grown sales by 10% in the region. adidas‟ strong brand equity, heavy spend on marketing and its push into retail are likely to continue to drive growth in the region, despite its ongoing economic difficulties, and high levels of disposable income continue to characterise the region.

adidas‟ Asia Pacific operations could be improved; it ranked fifth in China in 2011, compared to second in

2006. However, it is well set up in India, and the boom in middle-class consumers in both markets offer plenty of marketing opportunity for the company. Other emerging markets, notably Latin America where adidas is the leading apparel company, offer similar trends and opportunities.

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

Evolving distribution for different markets

adidas outperformed all of its global markets over the review period with the exception of Latin America.

The strength of the company‟s offer and its branding in particular have driven this trend, even in more mature markets such as Western Europe that have seen consumer confidence undermined by the global recession and the Eurozone crisis.

Development of sales in emerging markets has been in many ways easier. Regions such as Asia Pacific have seen an explosion in numbers of middle-class consumers with rising levels of disposable income. Consumer response to marketing and branding has driven growth for many large global apparel brand producers as a result, and adidas‟ high visibility, brand credibility and rapid product development has given it a competitive edge.

The company followed similar brand strategies in developed markets, but operates different sales models. Company-owned retail operations in Western Europe, for example, generated 13% of 2011 sales for the adidas and Reebok brands; in Eastern Europe, retail generated 24%. adidas is seeking to change this, and with the help of the far more developed e-commerce systems in developed markets, as well as higher digital media penetration and use, should be able to do so over the forecast period. Developing marketspecific sales models as it seeks to drive harder at controlling retail will be a challenge for the company.

adidas AG vs Total Apparel: US$ Million Fixed Exchange Rate, % CAGR 2006-2011

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

BRIC economies are lead prospects for adidas

Brazil, Russia, India and China still hold the greatest potential for sales growth going forward in the global apparel market; all of them promise to deliver a CAGR of between 6% and 10% between 2011 and 2016.

However, the scale of the market in China makes it the number one target for manufacturers of international apparel brands. Exponential economic growth underpinning a rise in disposable incomes, a developing retail network and a large population of young Chinese eager for Western fashion will drive sales of apparel. adidas has identified the market as one of its primary development targets over the forecast period.

The debt crisis in the Eurozone (one of the company‟s largest export markets) and growing demands from trading partners for China to raise the value of its currency, making Chinese exports more expensive, may cool demand for consumer goods there. However, it is the scale of the consumer base and its long-term potential that makes it so central to adidas‟ strategy.

adidas also finds itself well positioned in the other nine leading global markets; of the 10 forecast to see strongest growth in absolute terms, adidas has a higher market share than Nike in four of them.

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

adidas needs to pick up the ball in China

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

Chinese investment to recapture share

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

Indian dominance may be in the balance

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

Russian strength underpins regional dynamism

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

adidas bucks apparel trends in North America

adidas significantly outperformed the North American apparel market over the review period, with the exception of 2008-2009 when weakened consumer confidence saw brands at higher price positions suffer. More importantly, it began to outperform domestic giant Nike by the end of the review period.

The company has been able to do so by focusing on the most dynamic parts of its market there, including running and training, and increasingly basketball. Historically, the adidas and Reebok brands have lagged behind Nike in the NBA; however, adidas has increased its spending on basketball sponsorship, providing uniforms for the teams, as well as tying up stars such as Derrick Rose to sponsorship deals.

Distribution strategy has also been crucial to brand growth for the company‟s portfolio; as in other geographies, it seeks to control its portfolio via a tightened grip on retail. Where possible, it has sought to expand retail operations into high-quality malls and sporting goods stores; e-commerce is also a key part of its regional sales. As such, North America has been designated one of its key attack markets for the future, despite a CAGR of only 0.7% forecast for the region between 2011 and 2016.