HISTORY Puma and Adidas had become bitter business rivalry

HISTORY

Adidas is a multinational company and it was founded,
and its head office is located Herzogenaurach which is in Germany, the company
designs and manufactures various commodities like shoes, clothing and
accessories and said to be the largest sportswear manufacturer in Europe and
the second largest in the world after Nike, which is its rival company.

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Adolf Dassler in his mother’s house started the
company and was joined by his elder brother Rudolf later in 1924 under the name
Dassler Brothers Shoe Factory. In 1949, due to the breakdown in the
relationship between the brothers, Dassler created Adidas, and Rudolf
established Puma, which became Adidas’ business rival.

The three stripes logo by Adidas, which is used on the
company’s clothing and shoe designs as a promotion logo – The branding of
Adidas was bought from Finnish sports company Karhu Sports which Dassler
described Adidas as “The three stripes company” as the branding
become very successful.

After the split up in relations between the two
brothers in 1947 which led to the formation of new firm by Rudolf which he named
Ruda and was derived from Rudolf Dassler which was later rebranded as Puma, and
Dassler formed his company on 18 August 1949, which was formally registered as
Adidas AG, derive from Adi Dassler. “All Day I Dream About Sports” is said to
be the acronym for Adidas, though it is a myth but in real, the name is formed
due to the combination of two words i.e. “Adi” (a nickname for Adolf)
and “Das” (from “Dassler”).

Puma and Adidas had become bitter business rivalry
after the split of Dassler Brothers Shoe Factory in 1947, and due to this even
the town of Herzogenaurach was divided on the issue which lead to the nickname
“the town of bent necks” and at that time people looked down to see
which shoes strangers were wearing. Even two football clubs of the towns were
divided as Adidas supported the ASV Herzogenaurach club, while Puma supported 1
FC Herzogenaurach. When an odd-jobber were called to Rudolf’s home, the used to
wear Adidas shoe deliberately so that Rudolf Dassler would tell them to go to
the basement and pick out a pair of Pumas shoe for free.

 

PRODUCT
PROFILE

APPAREL

A wide range of clothing items is sold by Adidas
ranging from tracks, t-shirts, leggings, socks, jackets, hoodies, etc.

Franz Beckenbauer tracksuit was the first
Adidas item of apparel created in 1967. The largest manufacturer of sports bras
in Europe is Adidas, and is also the second largest manufacturer in the world.

 

SPORTSWEAR
AND SPORTS EQUIPMENTS

A wide range of sportwear required in different sports
like cricket, basketball, football, tennis, skateboarding, khabaddi is also
manufactured by Adidas. Moreover, adidas also manufactures sports equipment
like cricket bat, football and has been official supplier of the match ball in
FIFA world cup.

Since different sports games require different outfits
and so a wide range of different shoes are also manufactured by Adidas like
boots worn by football players, running shoes for athlete, shoe worn by cricket
players, tennis players, etc.

Sports equipment of golf are also manufacture by
Adidas under the sub-head ‘Adidas Golf’.

ACCESORIES

Adidas manufactures accessories for both men and women
ranging from watches, eyewear, bags, baseball caps, and socks. As well, Adidas also
has a branded range of male and female deodorants, perfumes, aftershave and
lotions. Mobile accessories also manufacture by Adidas.

 

CLIENT
PROFILE

Client of Adidas includes athletes, sports
personalities from different sports and also Adidas is the official sponsorship
of various teams in different sports, players from different sports field, etc.

Adidas has also provided baseball equipment and
sponsors numerous players of Major League Baseball and Nippon Professional
Baseball in Japan.

From 1997 to 2008, Adidas sponsored New York Yankees.
In
the 1990s, Adidas signed the superstar Indian batsman Sachin Tendulkar and made
shoes for him. From 2008 till his retirement, Adidas had sponsored the cricket
bat used by Tendulkar. It created a new bat, ‘Adidas Master Blaster Elite’,
personalized for him. In 2008, Adidas made a concerted move into
English cricket market by sponsoring English batting star Kevin Petersen after
the cancellation of his lifetime deal with Woodworm, when they ran into
financial difficulties.

The following year they signed up fellow England
player Ian Bell, Pakistan opening batsman Salman Butt and Indian Player
Ravindra Jadeja.

 

In the Indian Premier League (IPL), Adidas sponsored
the team Mumbai Indians from 2008 to 2014 and Delhi Daredevils from 2008 to
2013. They were the official sponsors of Pune Warriors India in 2011 and 2012,
however the team was banned from IPL due to payment issues. In 2015 Season,
Adidas sponsored Royal Challengers Bangalore.

USA Olympic team members McKayla Maroney, Jordyn
Wieber, Jake Dalton and Danell Leyva are all sponsored by Adidas gymnastics.

 

ORGANIZATION
STRUCTURE

 

The company consists of several senior levels,
mid-level and entry level executives which handle its functioning and
operations. A strict organization or hierarchical structure is followed within
the company to ensure that everything remains in order and that the
responsibilities and roles are properly divided and distributed.

CEO

At the topmost position comes with Chief executive
officer or CEO which is the highest level in the corporate company who is the
senior most employee of the company and the one who is responsible for all the
successes and losses of the company. 
Directly within the CEO, there are many positions which are occupied by
those who report directly to him. They are:

 

CFO

Chief corporate communications officer

General counsel

Global head of brands

Head of public relations

Member of management board, global operations

Member of management board, global sales

Chairman of Board

This is the second highest position in the company and
is also a senior level position in the company. The chairman has a supervisory
or decision-making role in the company. One needs not just experience but also
skills and knowledge to get to this position.

 

Vice
Chairman of Board

After the chairman comes the position of the vice
chairman of board. The vice chairman of board directly overseas the various departments
and ensures that they are working smoothly. Vice chairman of board looks after
board related activities and takes part in the major decision making of the
company.

 

Vice chairwoman of the supervisory board, employee
representative

Vice chairman of the supervisory board

Member of the supervisory board, employee
representative

 

The director of employee representative or member of
the supervisory board is the next position in the hierarchical order of Adidas
corporate hierarchy. This individual looks after employee relations, employee
management and employee welfare at Adidas.

 

Member
of the Supervisory Board

The member of the supervisory board is also known as
the director and is the person who is responsible for supervision of different
departments. There is a director each for each of the Adidas head office and
this too is a senior level position.

 

PRESENT
MARKET SHARE

Adidas AG is the largest sportswear manufacturer in
Europe and the second largest in the world. The company employed approximately
60,617 people worldwide in 2016. The adidas Group’s global net sales amounted
to about 19.29 billion euros in 2016. In that year as well, the North American
region of the adidas Group generated 21 percent of the company’s retail net
sales.

 

 

Footwear and apparel are two of the adidas Group’s
biggest segments. In 2016, the company produced 360 million pairs of shoes
worldwide and 382 million units of sports apparel. As a result, Adidas has
become one of the most popular brands amongst men and women when it comes to
sportswear worldwide.

FUTURE
STRATEGIES

Anything and everything that can be digitalized will
be digitalized. Adidas promise it customers that the company will seize every
new technology as an opportunity to communicate even better with customers and
satisfy their wishes even more quickly. With the company new
e-commerce business, the company is already closer to the customer. Adidas know
that their customers are buying behaviour, their budgets, and their purchasing
rhythms and it’s completely clear that the company will be securing their short-term
requirements and production planning with this data.

 

However, according to the company it is crucial that they
should use this digital connection to swiftly detect even the smallest changes
in the moods of young consumers and react to them accordingly and the core
target group of 14- to 19-year-olds renews itself every five years. In these
five years, the company is trying their best to master every trend, and at the
same time understand the regrowing core target group.

 

Regardless of where and how the customers shop, any
company will want to inspire them always and everywhere and so Adidas have more
retail stores than any other competitor, and are the market leader in
e-commerce, they are even implementing franchising models in challenging
markets like China and Latin America.

 

With more than 2,700 retail stores (12 concept stores,
including the Running Store and the new OCS in Berlin, as well as 12 outlet
stores in Germany), over 11,000 mono-brand franchise stores (13 in Germany),
over 116,000 stores by the company’s wholesale partners, and around 50 of our
own e-commerce platforms, we have an unparalleled network of contact points for
our customers in our industry.

 

These customers thus experience adidas across all
sales channels, and with a uniform appearance at that. adidas isn’t divided or
quartered, it maintains one face for our customers.

Adidas is aiming to increase their consolidate profit
annually up to the year 2020 and to achieve these goals, the company is concentrating
in their strategic business plan “Creating the New” on the factors “Cities,”
“Swiftness,” and “Open Source.”

FINANCIAL
INFORMATION

 

 

 

ACHEIVEMENTS

DOW
JONES SUSTAINABILITY INDICES

In September 2017, for the 18th consecutive time,
adidas AG has been selected to join the Dow Jones Sustainability Indices
(DJSI), the world’s first global sustainability index family tracking the
performance of the leading sustainability-driven companies worldwide.

 

In the “Textiles, Apparel & Luxury Goods
Industry”, the company was rated industry best in the criteria

 

Brand Management

Customer Relationship Management

Impact Measurement and Valuation

Materiality

Risk and Crisis Management

Supply Chain Management

Environmental Policy and Management Systems

Corporate Citizenship and Philanthropy

Human Rights.

The indices serve as benchmarks for investors who integrate
sustainability considerations into their portfolios, and provide an effective
engagement platform for companies who want to adopt sustainable best practices.
The annual review of the DJSI family is based on a thorough analysis of
corporate economic, environmental and social performance, assessing issues such
as corporate governance, risk management, branding, climate change mitigation,
supply chain standards and labour practices.

 

FTSE4GOOD
INDEX SERIES

In December 2016, adidas was again included in the
FTSE4Good Index.

FTSE Russell (the trading name of FTSE International
Limited and Frank Russell Company) confirms that adidas has been independently
assessed according to the FTSE4Good criteria, and has satisfied the
requirements to become a constituent of the FTSE4Good Index Series. Created by
the global index provider FTSE Russell, the FTSE4Good Index Series is designed
to measure the performance of companies demonstrating strong Environmental,
Social and Governance (ESG) practices. The FTSE4Good indices are used by a wide
variety of market participants to create and assess responsible investment
funds and other products

 

VIGEO
EIRIS EURONEXT INDICES

As of May 2017, adidas AG is maintained in the Vigeo
Eiris Euronext indices

Europe 120 (the 120 most advanced companies in Europe)
and

Eurozone120 (the 120 most advanced companies in the
Eurozone region).

Vigeo Eiris’ indices are composed of the
highest-ranking listed companies as evaluated by the agency in terms of their
performance in corporate responsibility. Selected companies have achieved the
highest ratings in their reference universe. Ratings are weighted and reflect
the company’s performance with regards to the set of risks Vigeo Eiris defines
and evaluates to assess and measure corporate responsibility.

 

ECPI
INDICES

In December 2016, adidas AG has again been included in
the ECPI Indices. ECPI is dedicated to environmental, social and governance
(ESG) research and index development, calculation and publication. ECPI offers
a wide range of ESG indices built using its proprietary ESG Rating Methodology
(positive screening) and controversial sector exclusion (negative screening).

 

CARBON
DISCLOSURE PROJECT (CDP)

Adidas annually report our CO2 emissions and water
consumption reduction targets and strategies to achieve these targets via CDP,
which is an independent not-for-profit organisation that holds the largest
collection globally of self-reported climate change data. On a voluntary basis,
CDP requests information on CO2 emissions, reduction targets, risks and
opportunities of climate change from the world’s largest companies on behalf of
722 institutional investor signatories. The information provided is evaluated
and published by CDP to increase transparency around climate-related investment
risk and commercial opportunity, and to drive investments towards a low-carbon
economy.

 

In 2017, adidas again responded to the CDP Climate
Change questionnaire and was awarded with a ‘B score’ in the category
“Consumer Discretionary”. This good result signals that the company
is taking further steps to effectively reduce its emissions, indicating more
advanced environmental stewardship by measuring and managing its impact. In
addition, adidas responded to the CDP Water programme. For the second year in a
row, the company reported about its water reduction targets and strategies to
achieve these targets and was awarded with a ‘A- Leadership’ rating. The
excellent result shows that the company has implemented a range of best
practice actions to manage water and mitigate water risk, both in its own
operations and beyond them.

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