business plan of adidas shoes

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Adidas Business Model

Adidas excels in the sportswear industry by offering innovative and high-performance products. With a focus on style, they combine fashion trends with sports functionality. Operating through a global supply chain and retail network , they generate revenue from product sales, licensing, and e-commerce. Their customer segments include athletes, active lifestyle consumers, and fashion-conscious individuals.

Table of Contents

Value Proposition:

Innovative and performance-oriented products:.

Offering innovative and high-performance sportswear and footwear to customers.

Brand Reputation and Authenticity:

Building a strong brand reputation and emphasizing authenticity in product offerings.

Style and Fashion:

Combining style and fashion trends with sports functionality in product designs.

Operational Model:

Global supply chain:.

Managing a global supply chain to ensure efficient production and distribution of products.

Research and Development:

Investing in research and development to drive innovation and product improvement.

Retail Store Network:

Establishing a network of retail stores and online channels for product sales and customer engagement.

Revenue Model:

Product sales:.

Generating revenue through direct sales of sportswear and footwear products.

Licensing and Sponsorships:

Expanding revenue streams through licensing agreements and sponsorships with sports events and teams.

E-commerce Sales:

Driving online sales through e-commerce channels and digital platforms.

Customer Segments:

Athletes and sports enthusiasts:.

Targeting professional athletes and sports enthusiasts who seek high-performance sportswear.

Active Lifestyle Consumers:

Catering to individuals with an active lifestyle who prioritize comfort and style in their apparel choices.

Fashion-conscious Consumers:

Appealing to fashion-conscious consumers who value the combination of sports functionality and trendy designs.

Key Activities:

Product design and development:.

Creating innovative sportswear and footwear designs that meet customer demands.

Marketing and Branding:

Implementing marketing strategies to build brand awareness and promote Adidas’ products.

Supply Chain Management:

Ensuring efficient supply chain operations for timely product delivery and inventory management .

Key Resources:

Brand equity and reputation:.

Leveraging a strong brand equity and reputation built over decades.

Research and Development Capabilities:

Investing in R&D to drive continuous product innovation and technological advancements.

Retail Infrastructure:

Maintaining retail stores and e-commerce platforms for product distribution and customer interaction.

Key Partnerships:

Suppliers and manufacturers:.

Collaborating with suppliers and manufacturers to ensure the quality and availability of materials and production capabilities.

Sports Teams and Athletes:

Forming partnerships with sports teams and athletes for endorsements and promotional activities.

Retail Partners:

Partnering with retail outlets and e-commerce platforms to expand distribution channels .

Cost Structure:

Material and production costs:.

Expenses associated with sourcing high-quality materials and manufacturing sportswear and footwear products.

Marketing and Advertising Expenses:

Investments in marketing campaigns, sponsorships, and brand promotions.

Retail Operations Costs:

Operating costs of retail stores, logistics, and e-commerce platforms.

Key Highlights

• Innovative and Performance-oriented Products : Adidas offers innovative, high-performance sportswear and footwear to customers.
• Brand Reputation and Authenticity : The company builds a strong brand reputation and emphasizes authenticity in its product offerings.
• Style and Fashion : Adidas combines style and fashion trends with sports functionality in its product designs.
• Global Supply Chain : Managing a global supply chain to ensure efficient production and distribution of products.
• Research and Development : Investing in research and development to drive innovation and product improvement.
• Retail Store Network : Establishing a network of retail stores and online channels for product sales and customer engagement.
• Product Sales : Generating revenue through direct sales of sportswear and footwear products.
• Licensing and Sponsorships : Expanding revenue streams through licensing agreements and sponsorships with sports events and teams.
• E-commerce Sales : Driving online sales through e-commerce channels and digital platforms.
• Athletes and Sports Enthusiasts : Targeting professional athletes and sports enthusiasts seeking high-performance sportswear.
• Active Lifestyle Consumers : Catering to individuals with an active lifestyle who prioritize comfort and style in their apparel choices.
• Fashion-conscious Consumers : Appealing to fashion-conscious consumers valuing the combination of sports functionality and trendy designs.
• Product Design and Development : Creating innovative sportswear and footwear designs that meet customer demands.
• Marketing and Branding : Implementing marketing strategies to build brand awareness and promote Adidas’ products.
• Supply Chain Management : Ensuring efficient supply chain operations for timely product delivery and inventory management .
• Brand Equity and Reputation : Leveraging a strong brand equity and reputation built over decades.
• Research and Development Capabilities : Investing in R&D to drive continuous product innovation and technological advancements.
• Retail Infrastructure : Maintaining retail stores and e-commerce platforms for product distribution and customer interaction.
• Suppliers and Manufacturers : Collaborating with suppliers and manufacturers to ensure the quality and availability of materials and production capabilities.
• Sports Teams and Athletes : Forming partnerships with sports teams and athletes for endorsements and promotional activities.
• Retail Partners : Partnering with retail outlets and e-commerce platforms to expand distribution channels .
• Material and Production Costs : Expenses associated with sourcing high-quality materials and manufacturing sportswear and footwear products.
• Marketing and Advertising Expenses : Investments in marketing campaigns, sponsorships, and brand promotions.
• Retail Operations Costs : Operating costs of retail stores, logistics, and e-commerce platforms.

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Three Stripes Business Model of Adidas

One brand that dominates the mindshare while consumers think of Hip Hop and sporty brands is Adidas. So much so that Adidas is now one of the most desirable sportswear brands. Adidas produces various sports equipment across different types of sports. But then the question is what is the business model of Adidas that is helping the brand rule the sportswear industry across all the sports (obviously next to Nike).

As of 2020, Adidas had a turnover of  €19.844 billion  and has approximately  62,285 employees  worldwide. From establishing itself as one of the best sportswear, it has also been working towards establishing itself as one of the best CSR companies globally (as of 2020).

How it all Began?

The foundation for Adidas was laid in  1920 by Adolf Adi Dassler , a 20-year old German who was an extremely passionate athlete. He started producing shoes outside his mother’s laundry room using limited materials available post WW1. Initially, he did not intend to sell sneakers and had completed his apprenticeship in a bakery before he started selling his sneakers to produce the best shoes for passionate athletes.

He understood the need for high-quality sports equipment and regularly visited the athletes to seek feedback on what these athletes truly desired. Such observations and a genuine desire to help athletes further encouraged Adolf to develop products that would better the consumers’ lives.

Currently, Adidas has products in the  following category  

• Accessories and Gear

In July 1924, the business was established as “Dassler Brothers Shoe Factory” (Gebrüder Dassler Schuhfabrik), which was later joined by his elder brother. It was only in 1936 that the brand found true success when Adi gifted shoes to the gold medallist Jesse Owen an American track-and-field star, who also made a world record in the 1936 Berlin Olympics. The business became quite successful and was selling 200,000 shoes each year until WWII hit.

After WWII in 1947, the brothers had a clash and they split. Rudolf formed another shoe company known as Puma, which is now considered one of the strongest rivals of Adidas.

Fun Fact: The complete form of Adidas is  ‘All Day I Dream About Sports.’ Initially, in 1949  the logo was a spiked shoe hanging in between the letter ‘d’

Adidas logo developed its famous three strips from the original founder Karhu Sports, who was short on capital post-WWII. The owners decided to sell the trademark of their logo for €1,600 and two bottles of whiskey. As per Economic Times , The three-stripes of the Adidas logo represent a mountain, pointing out challenges and goals people need to overcome.

It was only in 1971  that the brand unveiled the three-stripe Adidas logo in the form of a leaf called the “trefoil.” This version was later replaced in 1990 by the current logo, shaped like a triangle for the Equipment Line but later became the corporate logo, though the trefoil logo can still be found on some Adidas original products.

Adidas Business Model is based on integrating hip hop culture and sports

In 1970  the brand delivered its football for the 1970 World Fifa Cup and designed the ball in such a way that it would increase the visibility on the black and white screen, and this soon led to one of the most successful and famous partnerships of Adidas providing footballs to Fifa World Cup after that.

In 1986, the brand expanded and entered the hip-hop culture and soon became a household name and a lifestyle. Unknown to Adidas, the hip hop group Run DMC wrote a song about their shoes, “My Adidas,” and held up the 3-Stripes shoes during the concert in front of 40,000 fans – amongst which was an Adidas employee, and it led to an unexpected partnership.

It was the first time that sport and art were merging, which led to the brand’s growth over a much larger audience and customer base. This led Adidas to develop new ways of marketing, which was considered as of the critical areas of the company, which led to its success and allowed it to achieve a competitive advantage.

Adidas Marketing Strategy

One of the most famous taglines of Adidas is ‘ Impossible is Nothing,’  which focuses on the importance of fitness and the importance of striving for something that a person truly desires and is also one of the primary marketing strategies for the company.

Furthermore, it has also sponsored many world sports events such as FIFA, UEFA, NBA, Cricket & Olympics. At the same time, it is also known to provide the best products which are comfortable, long-lasting, and beyond the ordinary.

Moreover, it also takes advantage of 6 major cities, which helps shape the trend and the buying decisions of the targeted customers.  These cities are Los Angeles, London, Shanghai, New York, Tokyo, and Paris. In the UK, it primarily focuses on selling soccer products, whereas it focuses on basketball and baseball in the US. Adidas ensures that the marketing strategy meets the needs of consumers globally.

The collaboration of Adidas with various athletes and significant-tech companies has allowed it to enhance innovation with branding and marketing. This has led to the development of a more vital relationship with the customers ensuring customer loyalty. It also collaborates with celebrities which includes music and fashion icons. Thus, the strategy is to build must-have designs that reach out to more than just sports fanatics.

This can be seen when Adidas created Yeezy with Kanya West. It turned out to be one of the fastest-growing footwear lines and, in 2021, was valued between $3.2-$4.7 bn. This has allowed it to expand the customer base and reach out to those customers who are not sports fans.

Yeezy is worth as much as $3 billion, according to a Bank of America valuation. Kanye West made about $147 million from Yeezy shoe royalties last year. That's more than his entire music catalog is worth – valued at $110.5 million by the Valentiam Group. https://t.co/YJ90ZOvIbA — Kim Bhasin (@KimBhasin) April 27, 2020

Nike also has a powerful marketing strategy. Do check out!

Adidas’ powerful distribution network

Another competitive advantage that Adidas has is its distribution channel. Globally it has around 2500 stores. The global supply chain of Adidas extends to various tiers from manufacturing partners to raw materials such as cotton, leather, and natural rubber and the use of technology.

The majority of the products are produced by 132 manufacturing partners worldwide. At the end of 2020, 61% of the strategic suppliers had worked for more than ten years, and 30% worked for more than 20 years.

As of 2020, it outsources most production and has 500 independent factories globally that manufacture products in more than 49 countries. Its supply chain has different types of business partners and also has multiple layers. As of 2020, the top 4 countries in terms of sourcing volumes were:

How Adidas is adding sustainability to its business model

Back in 2015, Adidas collaborated with Parley for the Oceans, an environmental organization. One of the primary goals of Adidas is to double the number of recycled sneakers. In 2021, Adidas aims to produce 17 million pairs of shoes with recycled plastic waste collected from beaches and coastal regions, after more than 15 million in 2020.

Sustainability is an integral part of the Adidas business philosophy. We have continued to invest in sustainability initiatives during the coronavirus pandemic, and we will significantly expand our range of sustainable products in 2021. Adidas chief executive officer Kasper Rorsted in a press release.

Furthermore, it is also currently focusing on eliminating the use of fur and focusing more on using plant-based leather, recycled cotton, and eco-friendly shoes to achieve by 2050 complete global neutrality.

As per the company’s press release , six out of ten Adidas articles are made from sustainable materials. By 2025, nine out of ten will be sustainable as the company expands and further innovates its 3-loop system: recycled loop (made from recycled materials), circular loop (made to be remade), or regenerative loop (made with natural and renewable materials). adidas has been researching fully recyclable or biodegradable materials for some time already and aims to only use recycled polyester in every product from 2024 onward.

Moreover, the sustainability bond amounting to €500 million was issued in September 2020, which was five times oversubscribed. The proceeds from the offering are planned to be used in targets like achieving recycled materials, investing in renewable energy production, and supporting underrepresented communities.

Adidas 2021 Business Strategy- Own The Game

In 2021 Adidas released its next five-year strategic cycle where ‘ Own the Game ‘ puts higher preferences to the consumer than everything else by acknowledging the role they have in shaping the trends in the industry. The “Own The Game” strategy of Adidas centers around a shift towards a DTC-led business model.

As part of the new strategy, Adidas aims for its direct-to-consumer business to account for half of its total sales by 2025 and contribute more than 80 percent to the company’s targeted revenue growth until then. By 2025, Adidas aims to triple its members to around 500 million, all while doubling its e-commerce sales to around $10 billion. In addition, Adidas’ own retail stores will be digitized with fully-fledged omnichannel capabilities.

Furthermore, the successful delivery will also ensure brand credibility, improve the consumers’ experiences, and push the boundaries of sustainability. Another aim of this strategy was to begin the formal process of divesting Reebok, which was needed to ensure the independent growth of each other and exploit its capabilities.

In conclusion, Adidas surely has blended the culture of hip-hop and sports and has successfully captured the interests of the consumers, giving comfort its highest priority. Adidas has built a business model that observes consumer trends and maintains high-quality manufacturing and innovative materials. Adidas has already pledged to strengthen its innovation mindset across all areas of the company over the coming years in order to continue to enable ground-breaking innovations.

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Kashish M is an Undergraduate student from the Middle East. Apart from listening songs and learning new languages and exploring different culture over time she developed interests in writing and gained interest in exploring different parts of the accounting/finance world.

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• April 19, 2023

The Adidas Business Model. How is Adidas Structured?

In this article, we explore the adidas business model to explain and understand how the business model of adidas is structured and to learn about how adidas makes money..

Adidas, a global giant in the sportswear and apparel industry, has been at the forefront of innovation, style, and performance for decades. Founded in Germany by Adolf “Adi” Dassler in 1949, the company has grown to become a household name and a symbol of athletic excellence. In this blog post, we will delve into the story of Adidas, its founders, and its evolution over the years. We will use Alexander Osterwalder’s Business Model Canvas as a framework to deconstruct and understand the Adidas business model, which has enabled the company to maintain a competitive edge in a constantly changing market.

The Founders and the Origin Story

Adolf “Adi” Dassler was born in Herzogenaurach, Germany, in 1900. Adi was a passionate athlete and a skilled cobbler, which led to his interest in creating specialized athletic footwear. In 1924, Adi and his older brother Rudolf “Rudi” Dassler founded the Dassler Brothers Shoe Factory, producing athletic shoes for various sports, including soccer, running, and tennis.

However, the brothers had a falling out in 1948, leading to the dissolution of their partnership. Adi went on to establish Adidas in 1949, while Rudi founded Puma. The name “Adidas” is derived from Adi’s first and last names – Adi Dassler.

The early success of Adidas came when West Germany’s national soccer team wore Adidas shoes with screw-in studs during the 1954 FIFA World Cup. The innovative design helped the team secure victory against the heavily favored Hungarian team, bringing international attention to Adidas.

Now that we have an understanding of the company’s origins, let’s examine the Adidas business model using Alexander Osterwalder’s Business Model Canvas.

• Customer Segments

Adidas caters to a wide range of customer segments, including professional athletes, amateur sports enthusiasts, and casual wear consumers who value style and comfort. The company segments its customers into the following categories:

a. Professional Athletes: Adidas creates high-performance products for athletes competing in various sports, such as soccer, basketball, running, and tennis.

b. Sports Enthusiasts: Amateur athletes and fitness enthusiasts who engage in sports for leisure or fitness purposes.

c. Casual Wear Consumers: Individuals who appreciate the style and comfort of Adidas products for everyday wear.

d. Youth and Children: Adidas offers sportswear, footwear, and accessories for younger customers.

• Value Proposition

Adidas provides value to its customers through a combination of innovative design, quality materials, and strong brand recognition. The company’s value proposition can be summarized as follows:

a. Innovative Design: Adidas is known for its groundbreaking product designs, such as the screw-in studs for soccer shoes, Boost cushioning technology in running shoes, and Primeknit upper materials.

b. Quality Materials: Adidas invests in research and development to create high-performance products with durable, comfortable materials that enhance athletic performance.

c. Strong Brand Recognition: With iconic products like the Superstar, Stan Smith, and the three-stripe logo, Adidas has become synonymous with athletic excellence and style.

d. Collaboration and Partnerships: Adidas collaborates with renowned designers, athletes, and celebrities to create exclusive, limited-edition products, such as the Yeezy line by Kanye West and collaborations with Pharrell Williams and Stella McCartney.

e. Sustainability: Adidas has made a commitment to sustainability, with initiatives like its partnership with Parley for the Oceans to create products made from recycled ocean plastic and its goal to use only recycled polyester in products by 2024.

Adidas utilizes multiple channels to reach its customers and ensure a seamless purchasing experience. These channels include:

a. Retail Stores: Adidas operates its own retail stores worldwide, which allow customers to physically experience the products before making a purchase.

b. Online Store: The company’s e-commerce platform enables customers to browse and purchase products online, offering convenience and accessibility.

c. Wholesale: Adidas partners with sporting goods stores, department stores, and other retail outlets to sell its products.

d. Social Media and Influencers: Adidas leverages social media platforms and influencer partnerships to promote its products and engage with its customer base.

• Customer Relationships

Adidas focuses on building long-term relationships with its customers by providing personalized experiences, excellent customer service, and fostering a sense of community. Key aspects of the company’s customer relationship strategy include:

a. Personalized Experience: Adidas offers customization options for selected products, allowing customers to create unique designs and express their individuality.

b. Customer Service: The company invests in training its staff to provide knowledgeable, friendly service to assist customers with their purchases and address any concerns.

c. Community Building: Adidas sponsors events, such as marathons and local sports leagues, to connect with its customers and create a sense of belonging.

d. Loyalty Programs: The Adidas Creators Club rewards customers for their purchases and engagement with the brand, offering exclusive access to products, promotions, and events.

• Revenue Streams

Adidas generates revenue through multiple streams, including product sales, licensing agreements, and sponsorships. Key revenue streams include:

a. Product Sales: The primary source of revenue for Adidas comes from the sale of footwear, apparel, and accessories.

b. Licensing Agreements: Adidas licenses its brand and intellectual property to third-party manufacturers for products such as eyewear, watches, and fragrances, generating royalties.

c. Sponsorships: The company partners with professional athletes, teams, and events to promote its products and enhance its brand visibility, driving sales.

• Key Resources

Adidas relies on several key resources to maintain its competitive advantage and deliver value to its customers. These resources include:

a. Research and Development: Adidas invests heavily in R&D to create innovative, high-performance products that meet the needs of its customers.

b. Manufacturing Facilities: The company operates a global network of manufacturing facilities to produce its products efficiently and cost-effectively.

c. Distribution Network: Adidas has established an extensive distribution network, including retail stores, online platforms, and wholesale partnerships, to make its products accessible to customers worldwide.

d. Intellectual Property: Adidas owns numerous patents, trademarks, and design rights that protect its innovations and brand identity.

• Key Activities

Adidas engages in several key activities to deliver its value proposition and maintain its competitive edge in the market. These activities include:

a. Product Design and Development: Creating innovative, high-performance products that meet the needs of its diverse customer base.

b. Marketing and Promotion: Investing in advertising, sponsorships, and influencer partnerships to increase brand visibility and drive sales.

c. Supply Chain Management: Ensuring an efficient, cost-effective, and sustainable production and distribution process.

d. Customer Engagement: Building and maintaining strong relationships with customers through personalized experiences, customer service, and community-building initiatives.

• Key Partnerships

Adidas collaborates with various partners to enhance its product offerings, expand its market reach, and support its sustainability initiatives. Key partnerships include:

a. Athletes and Sports Teams: Adidas sponsors professional athletes and sports teams to promote its products and enhance its brand visibility.

b. Designers and Celebrities: Collaborations with designers and celebrities, such as Kanye West, Pharrell Williams, and Stella McCartney, create exclusive, limited-edition products that generate buzz and demand.

c. Suppliers: Adidas works closely with suppliers to source high-quality materials and maintain an efficient, sustainable supply chain.

d. Retail Partners: Partnerships with sporting goods stores, department stores, and other retail outlets enable Adidas to reach a broader customer base and increase sales.

e. Sustainability Partners: Adidas collaborates with organizations like Parley for the Oceans to develop innovative, sustainable materials and practices, supporting its commitment to environmental responsibility.

• Cost Structure

Adidas incurs costs in various areas to support its key activities and maintain its competitive advantage. Major cost drivers include:

a. Research and Development: Investment in R&D to create innovative, high-performance products.

b. Manufacturing and Production: Costs associated with operating manufacturing facilities and producing products.

c. Marketing and Promotion: Expenses related to advertising, sponsorships, and influencer partnerships.

d. Distribution and Logistics: Costs associated with maintaining an efficient distribution network, including retail stores, online platforms, and wholesale partnerships.

e. Personnel: Salaries, wages, and benefits for the company’s employees, including designers, engineers, sales staff, and customer service representatives.

Adidas has successfully navigated the competitive sportswear and apparel industry by developing a robust and adaptable business model. Through a deep understanding of its diverse customer segments and a relentless commitment to innovation, Adidas has cemented its position as a global leader in athletic performance and style.

By analyzing the Adidas business model using Alexander Osterwalder’s Business Model Canvas, we gain valuable insights into the company’s customer-centric approach, strong value proposition, and strategic partnerships. These elements have enabled Adidas to maintain its competitive edge and continue to evolve in a dynamic market.

As a company with a rich history and a promising future, Adidas serves as an inspiring example for entrepreneurs and business leaders seeking to build successful, enduring enterprises. By understanding the principles and strategies that have contributed to Adidas’s success, we can apply these lessons to our own ventures and drive innovation, growth, and impact.

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Decoding the Adidas Business Model Canvas

May 24, 2023

This article will delve into the details of this dynamic framework to help you better understand how Adidas operates and maintains its position as a leading sportswear brand.

Join us in our exploration of the Adidas Business Model Canvas, and learn how this iconic brand has managed to establish a unique niche in today's competitive business environment. If you want to know more about different business model, here you can read more about L'oreal!

Decoding Adidas Business Model Canvas

Key Partners

‍ Adidas relies on a network of key partners to support its operations and bring its products to market. Raw material suppliers provide the cotton, leather, and other materials used to make Adidas products, while manufacturing partners produce the products themselves.

Logistics and transportation partners ensure that products are shipped to retail partners and customers efficiently and effectively. Retail partners, such as sporting goods stores and online retailers, are essential to Adidas' sales strategy and help to expand the company's reach and customer base.

Key Activities

‍ Adidas' key activities include

• designing and developing new products and technologies,
• sourcing and selecting raw materials and manufacturing partners,
• producing and manufacturing Adidas products,
• marketing and advertising to promote Adidas products,
• selling products through retail partners and direct-to-consumer channels,
• and building and maintaining relationships with key partners and stakeholders.

Key Resources

‍ Adidas' key resources include

• its innovative designs and technologies,
• skilled employees in various departments such as design, marketing, and supply chain management, manufacturing facilities and equipment,
• distribution and logistics networks,
• strong brand reputation and customer loyalty,
• and financial resources for investments and acquisitions.

Value Proposition

‍ Adidas' value proposition is centered around high-quality and innovative products for sports and fashion. The company's strong brand reputation and recognition also help to differentiate its products from competitors.

Adidas offers a diverse range of product offerings for different sports and activities, and has made sustainability and eco-friendliness a key aspect of its business model, using recycled materials in product manufacturing.

Customer Segments

‍ Adidas targets several different customer segments, including athletes and sports enthusiasts, fashion-conscious individuals, kids and youth, and professional sports teams and organizations.

Customer Relationships

‍ Adidas prioritizes providing high-quality products and customer service to build strong customer relationships. The company engages with customers through social media and other marketing channels, offering personalized product recommendations and promotions, and supporting customers with returns and exchanges.

Adidas uses several different channels to reach customers, including retail partners such as sporting goods stores and online retailers, direct-to-consumer channels such as the Adidas website and mobile app, and social media and digital marketing channels.

Revenue Streams

‍ Adidas' revenue streams come primarily from sales revenue generated by its products. The company also earns licensing fees from collaborations and partnerships, and sponsorship revenue from professional sports teams and organizations.

Cost Structure

‍ Adidas' cost structure includes raw material costs for product manufacturing, manufacturing and production costs such as labor and equipment, marketing and advertising costs, distribution and logistics costs, and research and development costs for new products and technologies.

Adidas Company Overview

Adidas is a multinational corporation specializing in designing, manufacturing, and marketing athletic and leisure footwear, apparel, and accessories. Founded in Germany in 1949, Adidas has become a global powerhouse, with annual revenues worth billions of dollars.

History of Adidas

The story of Adidas began with its founder, Adolf "Adi" Dassler, who started crafting sports shoes in his mother's laundry room after serving in World War I.

With a genuine passion for sports and a keen eye for quality, Adi quickly gained recognition for his innovative and durable footwear creations. In 1949, he officially registered the Adidas brand and trademarked its distinctive three-stripe logo.

Adi's dedication to quality and innovation helped Adidas to become one of the most recognizable sportswear brands in the world. He was the first to introduce screw-in studs in football boots, which revolutionized the sport and helped Germany win the 1954 FIFA World Cup.

The company continued to innovate, introducing the first track shoes with spikes and the first shoes made from kangaroo leather.

Adidas' commitment to innovation has continued into the modern era, with the company investing heavily in research and development to create cutting-edge products that help athletes perform at their best.

Adidas' Global Presence and Market Share

Today, Adidas operates in over 100 countries and employs more than 60,000 people, with its products available in thousands of locations worldwide. Its global market share has been steadily growing, with the company considered a major player in the sportswear industry alongside other leading brands such as Nike and Puma.

Adidas' success can be attributed not only to its innovative product offerings but also to its strong brand identity, strategic partnerships, and commitment to sustainability and social responsibility.

The company has made significant strides in reducing its environmental impact, with initiatives such as using recycled materials and reducing water usage in production.

Adidas has also been a leader in promoting diversity and inclusion, with initiatives such as its "Creating Lasting Change" program, which aims to increase representation of underrepresented communities in the company's workforce and leadership positions.

Overall, Adidas has established itself as a global leader in the sportswear industry, with a rich history of innovation, a strong brand identity, and a commitment to sustainability and social responsibility.

Understanding the Business Model Canvas Framework

The Business Model Canvas is a widely used tool for mapping out the core elements of a business, presenting them in an easily digestible visual format.

Developed by Alexander Osterwalder, this framework allows companies to design, analyze, and adapt their strategies for better performance, guiding them through key components such as customer segments, channels, and revenue streams.

Adopting the Business Model Canvas as a strategic tool enables companies to identify potential gaps, weaknesses, or opportunities in their current models, facilitating informed decision-making and alignment of resources towards achieving their goals.

In the case of Adidas, the framework provides a comprehensive understanding of how the company creates, delivers, and captures value.

When it comes to strategic planning, the Business Model Canvas is an essential tool that can help businesses to gain a deeper understanding of their operations and identify areas for improvement or growth.

By analyzing the nine building blocks that make up the canvas, companies can develop a more detailed understanding of their target market, clarify their value proposition, and even spark innovative ideas for new products or services.

Key Components of the Business Model Canvas

The nine building blocks that make up the Business Model Canvas are:

• Customer Segments: This component refers to the different groups of customers that a business serves. It is essential to identify and understand the needs and wants of each customer segment to develop products or services that meet their specific requirements.
• Value Propositions: This component refers to the unique value that a business offers to its customers. It is essential to develop a compelling value proposition that differentiates the business from its competitors and meets the needs of its target market.
• Channels: This component refers to the different channels that a business uses to reach its customers. It is essential to identify the most effective channels for each customer segment and develop a strategy for delivering products or services through these channels.
• Customer Relationships: This component refers to the different types of relationships that a business has with its customers. It is essential to develop a strategy for building and maintaining strong relationships with customers to ensure their loyalty and satisfaction.
• Revenue Streams: This component refers to the different sources of revenue that a business generates. It is essential to identify and develop new revenue streams to ensure the long-term sustainability of the business.
• Key Resources: This component refers to the resources that a business needs to deliver its value proposition. It is essential to identify and allocate resources effectively to ensure the efficient operation of the business.
• Key Activities: This component refers to the key activities that a business needs to perform to deliver its value proposition. It is essential to identify and prioritize these activities to ensure the efficient operation of the business.
• Key Partnerships: This component refers to the key partnerships that a business needs to develop to deliver its value proposition. It is essential to identify and develop strong partnerships with suppliers, distributors, and other stakeholders to ensure the success of the business.
• Cost Structure: This component refers to the different costs that a business incurs to deliver its value proposition. It is essential to identify and manage these costs effectively to ensure the profitability of the business.

Importance of the Business Model Canvas in Strategic Planning

Utilizing the Business Model Canvas in strategic planning helps organizations clarify their value proposition, develop a more detailed understanding of their target market, and even spark innovative ideas for new products or services.

By providing a visual representation of the core elements of a business, this framework facilitates collaboration, communication, and understanding, making it an invaluable tool for strategic planning and decision-making.

Furthermore, the Business Model Canvas can help businesses to identify potential gaps, weaknesses, or opportunities in their current models, facilitating informed decision-making and alignment of resources towards achieving their goals.

By analyzing the nine building blocks that make up the canvas, companies can gain a deeper understanding of their operations and identify areas for improvement or growth.

In conclusion, the Business Model Canvas is a powerful tool that can help businesses to develop and refine their strategies, identify opportunities for growth, and achieve long-term success. By adopting this framework, companies can gain a competitive advantage in today's rapidly changing business landscape.

Are you in search of additional wisdom and knowledge?

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By delving into these posts, you'll gain a deeper perspective on different business models Canvas, enabling you to enhance your skills.

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Adidas Business Model (2024) | How Does Adidas Make Money

5 minutes read

Adidas has maintained its position as a prominent global sportswear brand for numerous years, characterized by substantial revenue and outstanding brand recognition. Originating from modest beginnings in a small German washroom during the early 1920s, the brand has consistently expanded and thrived throughout the decades.

One of the biggest reasons for the company’s success is its simple but very effective business model. The Adidas business model canvas has definitely evolved, adjusting to the changing times and consumer needs. Today, we will take a look at the business model canvas of Adidas  presently using and see how its elements contribute to the brand’s success.

A Brief History of Adidas

Adolf “Adi” Dassler began tinkering with shoes in 1924 in his mother’s kitchen. He was bent on the idea of providing top-quality sports equipment to athletes in order to boost their performance. He started a company called Gebrüder Dassler Schuhfabrik and was able to create gold medal-winning shoes, such as those worn by Lina Radke in 1928 and by Jesse Owens in 1936.

But it was only in 1949 that the Adidas brand was officially born. This time, Dassler started a new company called Adi Dassler Adidas Sportschuhfabrik in Herzogenaurach with 47 employees. This was also the time that the epic 3 Stripes Adidas logo was created. In 1954, Dassler’s football boots propelled the German national football team to a World Cup victory, and with that, th e brand became known around the world.

Today, the Adidas brand has a net worth of $34.66 billion . It certainly did not happen overnight, and the company had to overcome several challenges along the way before reaching this level of success.

Adidas Business Model Canvas

The Adidas business model is composed of multiple elements that are all vital for the company’s goals of profit generation. By taking a close look at all these elements, we can fully understand just how the legendary company has grown from its humble origins to the global brand that it is today.

Business Model Canvas Adidas (Created in Boardmix)

The first step in our analysis is to create a visual representation of the Adidas business model canvas, which we did by using the template from Boardmix .

Features of Creating a Business Model Canvas on Boardmix

Developing a  Business Model Canvas is a strategic activity often undertaken by startups and established businesses to identify and plan out different business aspects. Boardmix online whiteboard has numerous features that make this process more intuitive, efficient, and collaborative. 

1. Interactive Whiteboard Interface Boardmix's digital whiteboard allows users to visually layout and connect various components of the Business Model Canvas, like Key Partners, Value Propositions, Customer Segments, etc. The ability to write, draw, or annotate on the board facilitates clear expression of ideas. 2. Real-time Collaboration  Boardmix’s collaboration feature enables teams to work on the same Business Model Canvas simultaneously. This real-time interaction allows for immediate feedback, brainstorming, and iteration, which can significantly enhance the canvas’s quality and relevance. 3. Drag-and-Drop Functionality  Reorganizing ideas and elements is made easy with Boardmix’s drag-and-drop functionality. This feature helps to effortlessly structure or restructure the canvas, making the modeling process flexible and adaptive to evolving business strategies. 4. Multimedia Integration  Supplement your Business Model Canvas with rich multimedia content. Integrate images, documents, or even video clips directly into the canvas to provide additional context or explanation, enhancing comprehension and engagement. 5. AI-Enhanced Brainstorming  Boardmix’s AI enhancement feature can stimulate brainstorming by suggesting related concepts based on the inputs you provide for your Business Model Canvas. This innovative feature can contribute to developing a comprehensive and robust business model. 6. Ready-to-use Templates  Boardmix offers pre-made Business Model Canvas templates, accelerating the modeling process. These templates provide a well-structured format that can be readily filled in with business-specific details. 7. Secure Cloud Storage With Boardmix, you never have to worry about losing your work. Your Business Model Canvas gets auto-saved and stored securely in the cloud. This means you can access your canvas from anywhere and at any time. By utilizing these features of Boardmix Online Whiteboard, developing a comprehensive and visually engaging Business Model Canvas becomes an enjoyable and effective process.

Value Propositions of Adidas

The value that Adidas delivers comes in the form of top-notch apparel and footwear that always feature innovative designs and quality materials that have become synonymous with the Adidas brand. All products that Adidas brings to the market are the result of strategic partnerships and collaboration with expert designers and renowned athletes.

Customer Segments of Adidas

While Adidas primarily specializes in sports apparel and footwear, its appeal extends beyond professional athletes and sports enthusiasts. The brand’s enduring relevance is attributed to its ability to cater to a diverse customer base. In addition to athletes and sports enthusiasts, everyday individuals choose Adidas clothing and footwear for their exceptional comfort and style. Moreover, Adidas offers a product line tailored to youth and children, further solidifying its broad market reach and inclusive approach.

Key Partners of Adidas

Adidas relies heavily on independent contractors to whom they outsource the manufacturing side of the business. Hence, their biggest key partners are the more than 1,000 suppliers, most of which are located in Asia, that produce their lines of footwear and clothing. We can also see in the Adidas business model canvas that they also have long-standing partnerships with universities, athletes, and governments for the research and design of all their products.

Key Activities of Adidas

Adidas has only one major activity, and that is the design and development of its numerous products. But as you can imagine, and as the Adidas business model canvas shows, there are many key activities that are necessary to achieve this. It starts with product design, followed by marketing, promotion, supply chain management, and finally, customer engagement.

Customer Relationships of Adidas

Adidas maintains an excellent relationship with its customers by consistently delivering superior products. Basically, the relationship is of a self-service nature since there is no direct interaction between the company and the clients. However, they do provide outstanding customer service, both in their online and offline channels. Adidas also has loyalty programs that reward customers for purchases, encouraging them to keep coming back.

Key Resources of Adidas

Adidas is able to deliver consistently high value to its consumers with the help of several key resources that are vital to the operations of the company. As can be seen in the Adidas business model canvas, the list includes resources in research and development, manufacturing and distribution. Also among the valuable key resources of Adidas is its abundant intellectual property. This includes all the patents, design rights, and trademarks registered under the Adidas brand.

Channels of Adidas

In order to connect with customers and deliver value to them, Adidas makes use of a number of channels, led by their many retail stores worldwide. Currently, they have close to 2000 of their own retail outlets, spread across 160 countries . In addition, they also distribute products through thousands of sporting goods stores and other retail stores, to which they sell wholesale. Adidas also maintains an e-commerce platform that caters to customers from 58 countries .

As for promoting their products and maintaining an active connection with their customer base, Adidas has a very active online presence on various social media platforms, and also through partnerships with influencers.

Cost Structure of Adidas

With a highly value-driven business model canvas Adidas spends most heavily on creating top-quality products that will deliver the highest value to clients. This includes expenses on research and development, manufacturing and production, and warehousing and distribution. Other cost drivers as seen in the business model canvas Adidas follows are marketing, promotion, and advertising, as well as salaries and benefits of the workforce.

Revenue Streams of Adidas

Undoubtedly, product sales represent Adidas’ primary source of revenue. In 2022, the company achieved remarkable success, with footwear sales contributing a staggering $13.2 billion, followed by $9.3 billion from apparel, and $1.6 billion in accessories and gear. Beyond these impressive figures, Adidas leverages additional revenue streams through licensing agreements and royalties. Moreover, strategic sponsorships with renowned athletes, teams, and celebrities play a pivotal role in driving sales, further bolstering the company’s financial performance.

How Does Adidas Make Money

Analyzing the Adidas business model canvas and its constituent elements reveals that the primary revenue source for the company is the sale of its products. While Adidas operates some manufacturing facilities, the majority of production and manufacturing tasks are outsourced to independent suppliers, resulting in substantial cost savings. This efficient approach enables Adidas to maximize profits for each product sold, underlining its financial success in the market.

Adidas's market base also definitely helps drive more sales. Although their products are mostly designed for athletics, the style and comfort that they deliver make the apparel and footwear attractive even to non-sports enthusiasts. They have also been able to build a reputation around the brand that makes people want to be seen wearing Adidas, and this certainly propels sales even higher.

Key Takeaways

From very humble beginnings, Adidas was able to grow its business and overcome multiple obstacles along the way, ultimately securing a formidable place for itself in the global athletic footwear and sports apparel industry. Through constant innovation and painstaking research and development, they are able to continuously come up with new products that are relevant, up-to-date, and never lacking in terms of style and athletic performance.

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Using the  Boardmix Business Model Canvas Template , we were able to conduct a thorough and insightful analysis of the Adidas business model and discover exactly how they make money. And from everything that the company has done, Adidas is indeed an accurate embodiment of their own slogan: Impossible is Nothing.

References:

https://www.adidas-group.com/en/about/history/

https://w00931.wordpress.com/about/

https://cleverism.com/company/adidas-group/

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Shoe Store Business Plan Template & PDF Example

• August 28, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful shoe store. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your shoe store business’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of a shoe store business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the retail industry, this guide, complete with a business plan example, lays the groundwork for turning your shoe store business concept into reality. Let’s dive in!

Our shoe store business plan is structured to cover all essential aspects needed for a comprehensive strategy. It outlines the store’s operations, marketing strategy, market environment, competitors, management team, and financial forecasts.

• Executive Summary : Offers an overview of your shoe store’s business concept, market analysis , management, and financial strategy.
• Store & Location : Describes the store’s design, amenities, and why its location is appealing to potential clients.
• Supply & Products : Lists the types of shoes and related products provided by your store, including pricing structure.
• Key Stats : Shares industry size , growth trends, and relevant statistics for the shoe store market.
• Key Trends : Highlights recent trends affecting the shoe sector.
• Key Competitors : Analyzes main competitors nearby and how your shoe store differs from them.
• SWOT Analysis : Strengths, weaknesses, opportunities, and threats analysis.
• Marketing Plan : Strategies for attracting and retaining customers.
• Timeline : Key milestones and objectives from start-up through the first year of operation.
• Management: Information on who manages the shoe store and their roles.
• Financial Plan: Projects the store’s 5-year financial performance, including revenue, profits, and expected expenses.

Shoe Store Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary introduces your shoe store’s business plan, offering a concise overview of your store and its services. It should detail your market positioning, the range of footwear and accessories you offer, its location, size, and an outline of day-to-day operations.

This section should also explore how your shoe store will integrate into the local market, including the number of direct competitors within the area, identifying who they are, along with your store’s unique selling points that differentiate it from these competitors.

Furthermore, you should include information about the management and co-founding team, detailing their roles and contributions to the store’s success. Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be presented here to provide a clear picture of your store’s financial plan.

Shoe Store Business Plan Executive Summary Example

Business Overview 

When detailing the  business overview  in your executive summary, it’s crucial to provide clear and concise information. This includes the name of your store, its location, and an overview of daily operations.

These details not only introduce your business but also set the stage for its unique qualities. Indeed, a  unique selling proposition  ( USP ) is what sets your store apart from the competition. Whether it’s your focus on comfort, style, and durability, or a curated selection of premium brands, your USP should be a focal point of your executive summary. It’s what captures the interest of your audience and showcases the unique value your business brings to the market.

Example: For instance, “Foot Haven,” located in downtown Springfield, operates from a 3,000 sq. ft. space on Main Street. It offers a wide range of products including athletic footwear, casual shoes, formal wear, and children’s shoes. Their USP is the unique combination of comfort, style, and durability, ensuring that customers find the perfect shoes for any occasion.

Market Overview 

Understanding and presenting the  market size , growth trends, and industry dynamics are integral parts of the  market analysis . This section should highlight the potential of the U.S. shoe store industry, backed by relevant data like market value and growth rates. Discussing industry trends, such as the growing demand for stylish and durable footwear, provides insight into the evolving landscape and where your store fits within it.

Equally important is the competitive landscape. Your executive summary should identify  key competitors  and explain how your store positions itself in this environment. Whether you focus on premium brands, exceptional customer service, or a curated selection of footwear, this is your opportunity to showcase how your store is poised to stand out in a crowded market.

Example: Consider Foot Haven in the U.S. shoe store industry, valued at $88.5 billion with a 3.30% annual growth rate. While competing with local boutiques and national chains in Springfield, Foot Haven differentiates itself by offering premium brands such as Nike, Adidas, Clarks, and Timberland, catering to customers seeking both fashion and functionality.

Management Team 

The management team’s background and expertise are significant assets to your business. In your executive summary, highlight the key qualifications and experiences of your team members.

This might include your co-founder’s extensive experience in retail management or your head buyer’s expertise in sourcing high-quality footwear. Demonstrating the team’s expertise not only builds credibility but also assures potential investors and partners of your store’s capability to succeed.

Example: At Foot Haven, co-founders Jane Doe and John Smith lead the team. Jane, with a background in retail management, provides strategic leadership, oversees product selection, and ensures the store offers cutting-edge products that meet customer needs. John, with a background in finance and accounting, manages the company’s finances, including budgeting, financial reporting, and inventory management, ensuring financial stability and growth  opportunities  for the store.

Financial Plan 

The financial plan overview should succinctly summarize your financial goals and projections, including revenue targets and profit margins, to provide a clear picture of your store’s financial trajectory.

Example: Foot Haven aims for $2.3 million in annual revenue by 2028, targeting a 12%  EBITDA  margin. The financial strategy includes initial investments in high-quality store design and inventory, with sales growth driven by effective marketing and community engagement. We project steady growth, positioning Foot Haven as a leading footwear retailer in the local market.

Business Overview

For a Shoe Store, the Business Overview section can be concisely divided into two main slides: 

Store & Location

Briefly describe the store’s physical environment, emphasizing its design, comfort, and the overall atmosphere that welcomes customers. Mention the store’s location, highlighting its accessibility and the convenience it offers to customers, such as proximity to shopping centers or ease of parking. Explain why this location is advantageous in attracting your target clientele.

Supply & Products

Detail the range of footwear and accessories offered, from casual and formal shoes to sportswear and specialized footwear. Outline your pricing strategy , ensuring it reflects the quality of products provided and matches the market you’re targeting. Highlight any exclusive brands, seasonal collections, or limited-edition items that provide added value to your customers, encouraging repeat business and customer loyalty.

Market Overview

Industry Size & Growth

In the Market Overview of your shoe store business plan, start by examining the size of the footwear industry and its growth potential. This analysis is crucial for understanding the market’s scope and identifying expansion opportunities. Highlight relevant statistics and data that demonstrate the industry’s value and projected growth rates over the next few years.

Key Market Trends

Proceed to discuss recent market trends , such as the increasing consumer interest in athleisure footwear, sustainable and ethically produced shoes, and customization options. For example, highlight the demand for footwear that caters to specific needs like orthotic support or vegan materials, alongside the rising popularity of online shopping and augmented reality (AR) try-on features.

Competitive Landscape

A  competitive analysis  is not just a tool for gauging the position of your shoe store in the market and its key competitors; it’s also a fundamental component of your business plan.

This analysis helps in identifying your shoe store’s unique selling points, essential for differentiating your business in a competitive market.

In addition, the competitive analysis is integral in laying a solid foundation for your business plan. By examining various operational aspects of your competitors, you gain valuable information that ensures your business plan is robust, informed, and tailored to succeed in the current market environment.

Identifying Your Competitors in the Shoe Store Industry

Identifying competitors is the first step in understanding your position in the shoe store market. Begin by mapping out local shoe stores and footwear retailers. For instance, if your store specializes in high-end fashion shoes, your direct competitors include nearby boutiques known for their premium shoes, as well as larger retail chains that offer a wide range of footwear. Don’t overlook indirect competitors such as department stores and online retailers that offer extensive shoe collections.

Use online tools like Google Maps to get a geographical sense of competitor distribution. Platforms like Yelp and TripAdvisor offer customer reviews and ratings, providing insights into competitors’  strengths and weaknesses . For example, if several reviews commend the stylish selection and customer service at “Urban Sole,” this is a key strength of your competitor.

Shoe Store Competitors’ Strategies

Analyzing the strategies of these competitors involves several aspects:

• Product Range:  Examine their range of footwear. If “EcoStep” is gaining popularity with its sustainable and eco-friendly shoes, it indicates a market trend toward ethical fashion.
• Merchandising:  Consider the merchandising and display techniques. A store like “Footwear Trends” that focuses on trendy, seasonal displays might attract fashion-forward customers, while “Comfort First” might appeal to those looking for practical, comfortable shoes.
• Pricing Strategy :  Compare your prices with those of competitors. Are your shoes priced similarly to “Value Feet” or are they more aligned with the premium offerings at “Designer Shoes Boutique”?
• Marketing Tactics:  Look at how competitors market their products. Do they have a strong social media presence, or do they rely more on loyalty programs and in-store promotions?
• Customer Experience:  Assess the in-store experience. For instance, “Friendly Footwear” might be known for its personalized fitting services and knowledgeable staff, enhancing the shopping experience.
• Operational Efficiency:  Observe if competitors are using technology or innovative processes to streamline shopping and purchasing, such as “Quick Step Shoes” with its online inventory check and in-store pickup options.

What’s Your Shoe Store’s Value Proposition?

Reflect on your store’s  unique value proposition . Maybe your shoe store is known for its exclusive designer collaborations, or perhaps you offer a unique range of custom-fit shoes that aren’t available elsewhere in your area.

Identify market gaps through customer feedback and industry trends. For example, the growing interest in sustainable and ethically-made footwear could represent a market opportunity if competitors are not addressing this demand.

Consider your location: A shoe store in a busy urban area might focus on trendy, fast-fashion items, while a store in a suburban neighborhood could capitalize on offering a wide range of sizes and styles for families.

First, conduct a SWOT analysis for the shoe store , highlighting Strengths (such as a diverse product range and prime location), Weaknesses (including high operational costs or strong competition), Opportunities (for example, increasing trends in sustainable and customized footwear), and Threats (such as economic downturns that may decrease consumer spending on non-essential items).

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain customers through targeted advertising, promotional discounts, engaging social media presence, and community involvement.

Marketing Channels

Leveraging diverse marketing channels is crucial for building brand awareness and driving foot traffic to your shoe store.

Digital Marketing

Utilize online platforms effectively:

• Social Media:  Leverage social media platforms to showcase your shoe collection creatively. Engage customers with interactive content, behind-the-scenes glimpses, and influencer collaborations. Utilize platforms like Facebook and Instagram ads to reach a broader audience with targeted campaigns.
• Email Marketing:  Build an email list by offering incentives or newsletters featuring style guides, exclusive offers, and updates on new arrivals.
• Website and SEO:  Ensure a user-friendly website with intuitive navigation, high-quality visuals, and a seamless checkout process. Invest in Search Engine Optimization (SEO) to rank higher in search engine results for relevant shoe-related keywords, enhancing online visibility.

Local Advertising

Connect with the local community:

• Flyers and Local Print:  Distribute well-designed flyers in strategic locations, advertise in local magazines, and collaborate with local influencers to reach a wider audience.
• Community Engagement:  Participate in community events, sponsor local sports teams, or organize shoe drives for charity to foster community relations.
• Partnerships:  Collaborate with complementary businesses like clothing boutiques or wellness centers for joint promotions or co-marketing initiatives.

Promotional Activities

Engage customers with enticing offers:

• Special Deals:  Introduce seasonal promotions like ‘Back-to-School Shoe Sale’ or ‘Holiday Footwear Discounts’ to attract customers. Offer first-time visitors discounts to encourage trial purchases.
• Loyalty Programs:  Implement loyalty cards or digital programs where customers earn points for purchases, redeemable for discounts or exclusive merchandise.
• Referral Incentives: Provide incentives for customers who refer friends or family to your store, such as discounts or exclusive access to limited editions.

Sales Channels

Maximizing revenue through various sales strategies is essential for sustainable growth.

In-Store Upselling

Maximize sales during customer visits:

• Accessorize and Bundles:  Suggest complementary products like socks, insoles, or shoe care kits at the point of sale. Offer bundled discounts for multiple purchases.
• Personalized Recommendations:  Train staff to provide personalized recommendations based on customer preferences, enhancing the shopping experience.

Online Sales and Services

Leverage digital tools for streamlined sales:

• E-Commerce Integration:  Implement an intuitive online store for seamless purchasing. Offer online-exclusive discounts or promotions.
• Virtual Try-On or Fitting Tools:  Provide virtual fitting options to enhance the online shopping experience, reducing returns and improving customer satisfaction.

Membership and Loyalty Programs

Encourage repeat purchases:

• Membership Benefits:  Offer subscription-based programs providing early access to sales, exclusive collections, or free shipping.
• Tiered Loyalty Rewards:  Develop a loyalty program with tiered benefits based on customer spending, rewarding top-tier members with VIP services or personalized discounts.

Strategy Timeline

Finally, create a detailed timeline that outlines critical milestones for the shoe store’s opening, marketing efforts, customer base growth, and expansion objectives, ensuring the business moves forward with clear direction and purpose.

The Management section focuses on the shoe store business’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the shoe store toward its financial and operational goals.

For your shoe store business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your shoe store business’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your shoe store business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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Adidas Marketing Strategy: How Adidas lives by what they believe in "Impossible is Nothing"!

Learn about adidas's conic marketing strategy and advertising campaigns. read how adidas aces the 4ps of marketing mix - product, price, promotion & placement..

• overview#goto" data-overview-topic-param="adidas">About Adidas
• overview#goto" data-overview-topic-param="strategy">Adidas' Marketing Strategy
• overview#goto" data-overview-topic-param="vs">Adidas vs Nike
• overview#goto" data-overview-topic-param="unique">Unique Marketing Strategy
• overview#goto" data-overview-topic-param="campaigns">Memorable Marketing Campaigns
• overview#goto" data-overview-topic-param="key">Key Takeaways

Adidas is a recognizable name to not just sports fanatics but everyone, right from children to adults. Started as a shoe company in Germany, today Adidas owns a market cap of more than 21 billion euros!

Venturing into sports equipment and sporting apparel brand has made it the fastest-growing footwear lines. As of 30th June 2022, the company's sales were $24.559 billion .

Founded and headquartered in Herzogenaurach, Bavaria to sell soccer products to athletes, today Adidas is one of the best sporting goods company that is competing for neck-to-neck with Nike footwear in this monopolistic sportswear market .

In this article, we will understand how Adidas' manufacturing process and branding enable the Adidas marketing strategy to build a company that has lasted for 73 years.

About Adidas company

Source - GamePlan

Adolf Dassler founded the firm at his mother's house for selling soccer products, where he was joined by his elder brother Rudolf in 1924. Both the brothers split, post which Rudolf created the famous Puma brand, while Adolf continued with Adidas.

The company acquired Reebok in 2005 and repositioned Reebok to align with Adidas' brand values. A series of such acquisitions allowed Adidas to gain market share and dominance in the sporting goods industry.

Adidas' marketing strategy

Adidas has worked for more than 70 years to build the brand that it is today. The Adidas strategy for marketing emphasizes quality, innovation, diversification, and heavy-budget advertisements to stay as one of the best brand in a competitive market.

Let's analyze the same using 4P marketing analysis:

Adidas Brand Target Market

For its marketing strategy, Adidas' target audience includes athletes and youth between the age group of 20 to 30. Another target audience of the Adidas brand is 13 to 18-year-old athletes as they believe the youth are the future generation of prominent athletes.

Source - Adidas

But overall, Adidas has taken an approach of broad customer development as a result of which their target market includes people of any age or demographic passionate about sports culture and being fit.

Source - keishelleeadidas

Adidas' product lines include a range of t-shirts, hoodies, shorts, sporting equipment, etc apart from shoes. Their apparel includes sweaters, shorts, tracksuits, jackets, swimsuits, sports bras, hoodies, and other items.

To produce such products with good quality in a scalable manner, Adidas collaborates with many researchers, creators, designers, and open source innovations to shape its sporting goods. For example, Adidas partnered with Parley for the Ocean to use the plastic waste from oceans and beaches for manufacturing shoes.

You can learn more about the innovation and watch documentaries - Adidas X Parley shoes

Overall, the brand's product portfolio is well-rounded, offering outstanding options in many vital areas.

To compete with Nike which had started to sell sporting equipment, Adidas too released its collection of backpacks, sunglasses, goggles, and watches to capture the market. This includes training equipment and yoga accessories too.

Source - Adidas Hardware

As mentioned, the Adidas marketing strategy also targets young audiences as a part of diversifying its product portfolio. It has a dedicated collection called Adidas Neo that sells casual footwear for young adults and children.

Adidas, even though has premium pricing, indeed keeps in mind its major competition across Puma, Nike, and other upcoming startups to price its products. It also follows the skimming pricing strategy, where newly launched products are kept at premium prices, and their value drops as they get out of fashion.

The Adidas brand spends a ton of money on traditional advertising methods. This includes billboards, TV, newspapers, magazines, etc. To compete with Nike, one of its strategic growth areas is to leverage digital marketing with social media, influencer marketing, and paid ad spending.

Adidas is also very actively involved in sponsoring sports teams, which includes big names like Real Madrid, England, South Africa cricket teams, United Kingdom Football, etc. Many professional athletes also form a part of its influencer campaigns.

Distribution Strategy

Source - Infinity Mall

Adidas, with its high speed manufacturing prowess and production process, has more than 500 independent factories across 55 countries. All its products are available in its own retail stores in malls, independent showrooms, other mega marts like Walmart, online stores like Amazon/Myntra, and its own eCommerce store for direct purchases.

The two sportswear giants' competition - Adidas vs Nike

Adidas and its main competitor Nike have nurtured their own sports fans in a fierce competition ruled by marketing spending. Consumers are loyal and both products are in high demand, but looking at their marketing strategy, one can find many differences stemming from their business ideology and country of origin.

Adidas has focused on tennis and soccer players, while Nike has focused on basketball and runners as its target audience. Within their segments, both have diversified to make sporting goods and equipment to cater to all their needs.

Their country of origin also plays an important role in how these brands market themselves. Being a U.S-based Brand, Nike focuses on its domestic market and many of its products are suited to American taste.

While Adidas, which is a German brand, has designed its products more suited to European feet and weather conditions. Its speedy manufacturing processes and production processes are enabled by German technology. Their German branding which is known for product excellence is indeed a unique selling point that gains potential consumers' trust across the world.

What makes Adidas' marketing strategy unique?

Building a company that lasts more than 70 years requires consistent branding efforts and adaptive business operations. Some key aspects of the Adidas marketing strategy that helps it stand out include:

Adidas digital marketing strategy

Source - SocialInsider

Adidas has its own eCommerce store is today one of its fastest growing revenue channel. For targeting the younger crowd which is more online, it's even more important today to maintain a strong digital marketing strategy. Its social media posts promote sustainability, action, inspiration, and a modern outlook.

To achieve this, Adidas itself went into digital transformation to become a digital company. Today, the company spends most of its marketing budget on digital campaigns and social media - as per MarketingWeek digital analysis of the brand.

Strategic Cities

Adidas makes its presence strong in certain cities of strategic importance and that are culturally influential. This includes prominent names like Paris, Tokyo, London, Shanghai, Los Angeles, and New York.

It is known that these cities influence fashion trends across the world. Many other strong competitor of Adidas also focus on these cities to ensure success there, post which they distribute the product worldwide. This forms a concentrated marketing strategy that helps reduce overall marketing efforts and budget if done right.

Memorable marketing campaigns by Adidas

Adidas' ads successfully create excitement and espouse inspiration to its viewers. They have worked with several professional athletes, musicians, actors, and influencers who align with its brand values. Some notable ad campaigns include:

Your future is not mine

This ad targets the younger generation, a customer segment that is of growing importance for the Adidas company. With futuristic visuals, the ad inspires one to take the future into your hands.

Muhammad Ali VS Laila Ali

The Impossible is Nothing campaign is a unique one, where they use technology to rework Muhammad Ali's images from his real-life matches to compete against his daughter, Laila Ali. This Adidas-created ad is a great use case of using AI for taking creative execution for ads to another world.

Partnership with Kanye West

Adidas partnered with Kanye West to release branded footwear - Adidas Yeezy and accessories that would appeal to his fans. Recently, due to Kanye's unfavorable behavior, the company cut ties on this deal, though it will continue to sell its shoes.

Key takeaways from Adidas marketing strategies

If you're working on building a retail business, there is a lot to learn from the Adidas marketing strategy and the founding story as well.

Here are some major takeaways:

Focus on building a quality supply chain

The Adidas company is successful today due to its strong focus on ensuring its product quality is at par with what its upper middle class and above target market find appealing. If you have good quality products, you can always sell, upsell and cross-sell across the world. Adidas ensures its products are also consistently available worldwide.

Don't neglect digital marketing

Adidas started to lose its market share with Nike due to its lackluster digital presence. Recently, it has vowed to regain its share by making digital as a key part of its overall marketing strategy. In today's age, one cannot neglect to be a digital company, especially post-pandemic.

Target the root cause of trend formation

Adidas smartly focuses on key cities that are responsible for fashion trends than doing any spray-and-pray approach to sell across the world. Adidas works to ensure the people of these cities use its products, while the rest gets taken care of via word of mouth.

Adidas is today's world's number 2 brand, just behind Nike. With its recent digital transformation, the Adidas digital marketing strategy would again create fierce competition in the sports retail market. If you enjoyed this case study, you can also get more retail-marketing insights from Nike's marketing strategy or beverage brands like Pepsi , Gatorade , and Monster Energy .

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Marketing Strategies and Marketing Mix (7Ps) of Adidas

Marketing Strategies and Marketing Mix (7Ps) of Adidas 7 min read

Adidas is a multinational sportswear company that was founded in 1949 in Germany by Adolf Dassler. Prior to the founding of Adidas, Dassler had worked in his family’s shoemaking business and had developed a reputation for creating high-quality sports shoes. After a falling out with his brother, who had also worked in the family business, Dassler decided to start his own company.

The name Adidas comes from a combination of Dassler’s first and last names – Adolf and Dassler. The brand’s iconic three-stripe logo was also created by Dassler, who saw the potential for using stripes to create a distinctive look for his products.

In its early years, Adidas focused on producing athletic shoes for a variety of sports, including football, running, and tennis. The brand quickly gained a reputation for quality and innovation, introducing new technologies such as the world’s first screw-in studs for football boots.

Over the years, Adidas has expanded its product line to include a wide range of sportswear and equipment, as well as lifestyle and fashion products. The brand has also established a strong global presence, with retail stores and partnerships with sports teams and athletes around the world.

Today, Adidas is one of the world’s leading sportswear brands, known for its commitment to innovation, sustainability, and quality. The brand’s products are popular with athletes and sports enthusiasts, as well as with consumers who value style and quality.

Table of Contents

Marketing Strategies of Adidas

Adidas is a global sportswear brand that has developed a reputation for innovative design and quality products. To maintain its position as a leader in the industry, Adidas has developed a range of marketing strategies that are designed to increase brand awareness, build customer loyalty, and drive sales. Here are some of the key marketing strategies used by Adidas:

Sponsorship of Sports Events and Athletes:

Adidas has been successful in securing partnerships with several sports organizations and athletes across the world. Adidas has partnered with a number of high-profile sports organizations and athletes, including the NBA, MLS, FIFA, and the Olympic Games. These partnerships include long-term contracts and exclusive product lines that help Adidas to increase brand visibility and appeal to a wider audience. For instance, Adidas is the official kit supplier of several high-profile soccer teams such as Manchester United, Real Madrid, and Bayern Munich . Additionally, Adidas sponsors several individual athletes, such as Lionel Messi, James Harden, and Naomi Osaka . By aligning with these athletes and organizations, Adidas is able to tap into their fan base and increase its reach.

Influencer Marketing:

Adidas has recognized the importance of influencer marketing and has made a significant investment in this area. The brand partners with social media influencers and celebrities to create content that promotes Adidas products. Adidas has partnered with Kanye West, Pharrell Williams, and Beyonce to create exclusive product lines that appeal to their fans and followers. Adidas has collaborated with well-known figures such as Kendall Jenner, David Beckham, and Karlie Kloss to create campaigns that resonate with their followers. The brand also collaborates with popular Instagram influencers, such as @sneakerprophet_ and @yankeekicks , to showcase the latest Adidas products and generate excitement around new releases.

Product Innovation and Design:

Adidas is renowned for its innovative product design and uses this to differentiate itself from its competitors. The brand invests heavily in research and development to create new products that incorporate the latest technology and materials. For instance, Adidas introduced the Boost technology in 2013, which revolutionized running shoes by providing superior cushioning and energy return. The brand also collaborates with designers and artists to create unique product lines that appeal to a range of consumers. For example, Adidas collaborated with fashion designer Alexander Wang to create a collection that blends streetwear and high fashion.

Digital Marketing and E-commerce:

Adidas has embraced digital marketing and e-commerce as part of its marketing strategy. The brand operates its own e-commerce platform, which allows customers to purchase products online and have them delivered directly to their door. Adidas also invests in digital marketing campaigns to increase brand awareness and drive traffic to its website. For example, Adidas launched a Snapchat campaign to promote the release of its NMD sneakers, using filters and lenses to engage with its audience.

Customer Engagement and Loyalty:

Adidas places a strong emphasis on customer engagement and loyalty. The brand uses social media to connect with customers and build relationships with them. Adidas operates a loyalty program called “ Creators Club “ which rewards customers for their purchases and engagement with the brand. The program offers perks such as early access to new products, exclusive discounts, and personalized content. Additionally, Adidas engages with its audience through social media contests, where customers can win prizes by sharing their own content featuring Adidas products.

Overall, Adidas’ marketing strategies are designed to connect with customers and increase brand awareness, loyalty, and sales. By leveraging partnerships, influencer marketing, product innovation and design, digital marketing, and customer engagement, Adidas has been able to maintain its position as a leading sportswear brand.

Marketing Mix of Adidas

The marketing mix is a set of key marketing tools that companies use to promote their products or services to their target audience. Adidas’ marketing mix includes:

Adidas is known for its focus on product innovation and quality. The brand invests heavily in research and development to create new and improved products that meet the needs of its target audience. Adidas has also been successful in leveraging technology to enhance its products, such as with its BOOST cushioning technology and 4D printing technology .

In addition, Adidas has a range of sub-brands that cater to different segments of the market. For example, Adidas Originals targets the streetwear and fashion market, while Reebok focuses on fitness and lifestyle products.

Adidas uses a premium pricing strategy, positioning itself as a high-end brand. This strategy is based on the perception of quality and innovation associated with the brand. However, Adidas also offers products at lower price points through its sub-brands, such as Adidas Originals and Reebok.

In addition, Adidas uses a dynamic pricing strategy, adjusting prices based on factors such as demand and competition. This allows the brand to stay competitive while still maintaining its premium image.

Adidas products are sold through a variety of channels, including its own e-commerce platform, Adidas retail stores, and third-party retailers such as department stores and sports retailers. The brand has a strong global presence, with retail stores in key markets such as North America, Europe, and Asia.

In addition, Adidas has been successful in leveraging technology to enhance its distribution channels. For example, the brand has introduced initiatives such as “click and collect” and “ship from store” to provide customers with more convenient and efficient shopping experiences.

Adidas uses a range of marketing communication tools to promote its products. The brand’s advertising campaigns feature high-profile athletes and celebrities, such as Lionel Messi and Beyonce, and are designed to promote the brand’s values of innovation, performance, and style.

In addition, Adidas uses social media and influencer marketing to connect with its target audience. The brand has a strong presence on platforms such as Instagram, where it showcases its products and engages with its followers.

Adidas places a strong emphasis on employee training and development to ensure that its staff is knowledgeable and able to provide excellent customer service. The brand also partners with athletes and celebrities to act as brand ambassadors, helping to promote the brand’s products and values.

In addition, Adidas is committed to diversity and inclusion. The brand has launched initiatives such as “Creating Lasting Change” to promote equality and fairness in its workforce and communities.

Adidas’ process includes designing, developing, and manufacturing its products. The brand has a strong focus on sustainability and ethical practices, incorporating sustainable materials and production processes into its operations.

In addition, Adidas has been successful in using technology to enhance its production processes. For example, the brand has introduced 3D printing and automation to streamline its manufacturing and reduce waste.

Physical Evidence:

Adidas’ physical evidence includes its retail stores, e-commerce platform, and product packaging. The brand’s retail stores are designed to provide a premium shopping experience, with modern and stylish interiors. Adidas’ e-commerce platform offers a seamless shopping experience, with fast and reliable delivery options. The brand’s product packaging is also designed to reflect its values of sustainability and quality, using recycled and eco-friendly materials where possible.

Overall, Adidas’ marketing mix is designed to create a strong brand image and promote its products to its target audience. By focusing on product innovation, premium pricing, multi-channel distribution, strong promotion, trained staff, sustainable practices, and quality physical evidence, Adidas has been able to maintain its position as a leading sportswear brand.

Also Read: The Power of Branding: A Look at Nike’s Iconic Brand Campaigns

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Reebok Brand Strategy

Mission: to be the best fitness brand in the world.

Reebok is an American-inspired global brand with a deep fitness heritage and the mission to be the best fitness brand in the world. To realize this mission, Reebok has gone through a transformation from traditional sports to a focus on the sport of fitness. On this journey, Reebok continues to merge its iconic past with the new technologies that revolutionize both performance and lifestyle products. Reebok is positioned at the intersection of fitness and fashion, meeting the consumer where they are, as the consumer continues to blur boundaries. Reebok established a ‘Sport’ unit in 2018 that started its work in 2019. This Sport category combines product divisions focused on specialized fitness activities and functional innovation with a focus on style innovation for these products. These products are at the forefront of fitness and true to the culture and communities that Reebok consumers train, run, and live in. Reebok’s second category, Classics, reinforces the brand’s deep roots in fitness and pop culture across multiple iconic silhouettes and trend-right lifestyle products.

One voice, one brand to the consumer

In the fourth quarter of 2019, Reebok unified its brand under one logo and wordmark across both Classics and Sport. The vector and drop-R wordmark each represent Reebok unmistakably, connecting Reebok’s rich legacy to its exciting future. The brand exudes pride in its rich brand heritage and the vector logo, introduced nearly 30 years ago. The logo remains the most recognizable and beloved symbol of the Reebok brand and is linked to some of Reebok’s most iconic products, marketing and cultural moments. This evolution allows the brand to connect fitness, fashion and pop culture in one powerful Reebok voice across all products.

consumer obsession: the game changers

Reebok’s consumer obsession focuses on being distinctive, relevant, and authentic with its focus consumers – the Game Changers. For the Game Changers, fitness is the vehicle they use to explore life’s edges. The Game Changers don’t shy away from the unexpected. They are constantly evolving and looking to try new things – across all facets of their world in fitness and in life. They are truly changing the game and seeking to broaden their horizons. Reebok inspires and equips them to do just that.

The female consumer is at the forefront of Reebok’s consumer obsession. Rooted in Reebok’s heritage, this female-centric approach is reflected in content strategy, product creation, marketing activation and distribution. In 2019 alone, Reebok introduced extended sizing in its apparel as well as its first maternity collection to connect with women.

product franchises: leveraging the brand’s fitness Dna

Reebok recognizes the importance of building strong apparel and footwear franchises, establishing innovative but repeatable product lines that become annuities for the brand and essential items for the consumer. This is not only crucial for enhancing consumer perception and brand consideration, but for the efficiency of the Reebok brand.

In footwear, Reebok is further growing its iconic models that have authenticated their position in fitness and in their respective communities, such as the Nano in the CrossFit community and the Forever Floatride Energy in running. In 2019, the new Nano 9 was co-created with the CrossFit community. In the running category, Reebok won its fourth consecutive Runner’s World award, ‘Gear of the Year’. 2019 was also an exciting year for the Instapump Fury silhouette, as it celebrated its 25th anniversary with activations throughout the Asia-Pacific region and the release of the Fury Boost, a collaboration with the adidas brand. In addition, Reebok leverages its unique fitness DNA through iconic styles such as the Classic Leather and the Club C.

In 2019, Reebok set out to integrate footwear and apparel, leveraging the brand DNA, blending fitness and lifestyle looks to create the new uniform of fitness for consumers. In addition to innovative performance products , such as the award-winning PureMove Bra and the LuxTight 2.0, Reebok expanded the offering, creating apparel to support consumers at all stages of their fitness journey.

Reebok also puts a strong emphasis on innovation. The brand is committed to maintaining a full and innovative product pipeline, bringing new technologies, styles and processes to life. In this context, 2019 saw the launch of Zig, one-of-its-kind footwear built with a distinct zig-zag-shaped midsole, which provides maximum energy return to the consumer. At the end of 2019, Reebok announced Forever Floatride Grow – the brand’s first plant-based performance running shoe and latest example of sustainability innovation. The shoe is made with castor beans, algae, eucalyptus trees and natural rubber and thus builds on Reebok’s Cotton + Corn lifestyle collection of footwear. see Innovation

Marketing investments: sport the unexpected

In the industry, Reebok finds its strength in being a challenger brand. Reebok has always separated from the pack with bold product, personalities and moments. Through the new unified branding, Reebok can reach its consumer with a brand presence that is consistent across the products and the stories it tells. The Reebok brand is focused on connecting with the consumer in an authentic and unique way, creating inspirational marketing capabilities that build brand equity and consumer advocacy, while unleashing powerful brand messages. Reebok has always done things differently, and by combining the Digital and Marketing divisions in 2019, Reebok has been able to create award-winning breakthroughs.

• Sport the Unexpected campaign: Launched in 2019, Reebok’s ‘Sport the Unexpected’ campaign is one of the most recognized marketing campaigns Reebok has executed in recent years. The campaign celebrates Reebok as a historically known challenger brand, one that has always done the unexpected. Reebok’s short film ‘Storm the Court’ showed just how Reebok’s truly unexpected and witty nature can connect to consumers by winning 15 awards from Clio, Hatch (including a 2019 Best in Show Hatch Award), and a Cannes Lion. The campaign also featured one of the most high-profile personalities in the rap industry – Cardi B. In the short film ‘Nails’, Reebok broke convention and put the star in an everyday-type situation that shifts in an unexpected manner, spotlighting the iconic Reebok Club C in a completely unique way.
• Winning through digital: In 2019, Reebok sharpened its focus on the storytelling and product experience by completely re-designing reebok.com to resonate better with consumers. The tighter integration of marketing and digital drove some unexpected consumer moments – such as being the first brand to drop a new sneaker on Amazon Alexa or launching Reebok Unlocked, a first-of-its-kind membership program on reebok.com. Reebok is focused on continuing to optimize the digital customer experience, driving commercial results and delivering unexpected stories for the consumer.
• Authentic and influential fitness and fashion assets: To amplify the brand and increase its authentic connection with the Game Changer consumer, Reebok has partnered with some of the world’s most influential validators in the lifestyle and fitness space: fashion partners such as fashion icon Victoria Beckham and up-and-coming designer Kerby Jean-Raymond of Pyer Moss, artists such as female rapper Cardi B., and rapper and songwriter Future, and athletes such as American football pro bowler J. J. Watt and UFC superstar Conor McGregor. Partnering with powerful women such as Gal Gadot, Gigi Hadid and Nathalie Emmanuel rounds out Reebok’s strong roster of brand ambassadors. In addition, to validate its authenticity as the best fitness brand in the world, Reebok continues its partnerships with some of the fastest-growing and most innovative organizations in the fitness world, such as CrossFit, Les Mills, and Midnight Runners. Reebok continues to invest in the Boston Track Club, a professional running club with elite runners. Finally, continuing to build relationships with fitness instructors remains a crucial component of Reebok’s goal of connecting with the global fitness community. With over 220,000 fitness instructors currently being part of its global network, Reebok has made major progress toward its goal to be the brand of choice for instructors around the world.

MUSCLE UP: REEBOK TRANSFORMATION STRENGTHENS BRAND FUNDAMENTALS

Reebok announced a turnaround plan called ‘Muscle Up’ in 2016 aimed at accelerating Reebok’s top-line growth, particularly in North America, and improving the brand’s overall profitability. With efficient and effective distribution being key to Reebok’s future success in the all-important North American market, the company has significantly reduced its store base in the market. The company has closed nearly 50% of its own stores in the US market – both concept stores and factory outlets – since the introduction of Muscle Up. In addition, the brand has also streamlined its wholesale business, putting a clear focus on elevating brand equity and driving profitable growth.

In addition to progressing on the brand’s turnaround efforts in its home market, Reebok continues to execute on several transformational Muscle Up projects to enhance the profitability of the brand. Initiatives span marketing effectiveness, organizational efficiency and measures to improve product margins. Consequently, Reebok returned to profitability in 2018. In 2019, new initiatives were launched to further accelerate the transformation. They include re-branding and driving clarity with Reebok’s consumer on the brand’s positioning, shortening go-to-market timelines, strengthening go-to-market readiness, and building new platforms to drive e-commerce growth. In 2020, there will be enhanced focus on reducing complexity, increasing sales efficiency, and digital creation.

Through Muscle Up, Reebok will continue to drive relentless execution and discipline, build organizational capabilities, and accelerate the pace of change in order to drive sustainable profitable growth by the end of 2020.

Performance Products

In the sporting goods industry, performance products relate to technical footwear and apparel used primarily in sports.

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Birkenstock attributed the earnings miss to a rapid international expansion plan that temporarily squashed margins.

Birkenstock CEO Oliver Reichert said customers have been moving toward in-store purchases, so the company is focused on multiplying its retail fleet.

The retailer has been opening stores in newer markets like India and Japan to boost sales.

Birkenstock has also been building new manufacturing channels and updating its existing facilities, including its new plant in Pasewalk, Germany which began operations last year.

Gross profit margin dropped 220 basis points to 59.5% in the third quarter since the company honed in on production expansion. 

“They are investing for future growth and so they have introduced different factories and facilities to ramp up,” BMO Capital Markets analyst Simeon Siegel said.

Its revenue grew 15% in the Americas and 19% in Europe. 

Birkenstock has continued to gain market share at major retailers like Nordstrom and Foot Locker as demand stays high for its trendy cork sandals and closed-toe “Boston Clogs.”

“We achieved the highest quarterly revenue in our history, driven by unbreakable and growing demand across all segments, channels and categories,” Reichert said in a statement. “As a Superbrand we are gaining the attention of our key retail partners and their consumers, who are becoming increasingly selective and more intentional in their spending.”

The company kept its annual sales and profit forecasts the same.

With Post wires

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