Adidas Revenue H1 2015 and H1 2016,
by Region (in million Euros)

Source:
https://www.statista.com/

The Adidas Group’s net Sales
worldwide from 2000-2015(in million Euros)

Source:
https://www.statista.com/

Brand Value of the Sports Company
Nike  from 2012-2016(in billion USD) Source: https://www.statista.com/

Brand Value of Adidas

Previous Close:

$78.90

Volume:

26.56K

Market Cap:

$31.61B

Enterprise Value:

$19.74B

Last Quarterly Filing:

30-Sep-16

Beta (5yr):

1.03

Shares Outstanding:

400.62M

Revenue:

$20.79B

Gross Margin:

46.25%

Net Margin:

5.31%

EPS:

$2.69

Price-to-Earnings:

$2.58

Price-to-Book:

9.41

EV/EBITDA:

15.63

Source:http://marketrealist.com/

Analyzing the Prospects of Nike’s
Geographic Segments

o   Nike in North
America

§  Most of Nike’s (NKE) incremental revenue was recorded in its North America market, Nike’s
largest geographical segment. Nike derived ~44% of its revenue from North
America in 1H15. In contrast, peers LululemonAthletica (LULU) and Under Armour (UA) derive over 90% of their revenues from the North American market.
Nike’s reported North American revenue grew 13.8% year-over-year to $6.8
billion.

§  Revenue
gains were a result of retail expansion in the
company’s direct-to-consumer (or DTC) channel, 10% store comps growth in
1H15, and higher e-commerce sales. Nike’s
market share also expanded in key product categories.

Ø  Overseas markets

o   Nike’s
performance outside North America in 1H15 was mixed. Revenue showed
above-average growth in Western Europe and Greater China—both key markets for
Nike. Western Europe and Greater China contributed 4% and 2%, respectively, to
the overall growth in revenue.Western Europe is Nike’s second-largest segment,
accounting for 19.7% of revenue. Reported revenue grew at 27.4%
year-over-year to $3.0 billion in 1H15. Nike has been expanding its retail
footprint rapidly in Western Europe. Growth in Western Europe was spurred by
higher DTC sales, which grew 40% year-over-year. Nike also recorded comps
store growth of 17% and higher e-commerce sales.

o   China is another
key market for Nike. Greater China revenues grew 19.4% year-over-year to
$1.4 billion in 1H15. DTC growth was strong, with comp sales growing at 28% in
1H15 and higher e-commerce sales. But all was not sunshine in China. The
company experienced declines in men’s training, action sports, and soccer.

o   Despite the
relatively healthy growth shown by the world’s #1 sports gear company in
overseas markets, macro fundamentals are undergoing a change. We’ll discuss
these changes in parts 8 to 10 of this series.

o   Nike (NKE) is part
of the select 30-stock Dow Jones Industrial Average and the broader
market–tracking S&P 500 Index. ETFs like the SPDR Dow Jones Industrial
Average ETF (DIA), the SPDR
S&P 500 ETF (SPY), and the SPDR
Consumer Discretionary Select Sector ETF (XLY) provide
exposure to Nike (NKE). DIA, SPY, and
XLY invest 3.5%, 0.4%, and 2.9% of their portfolio holdings in Nike (NKE).

 

Market Trends

Market Trends of Nike

Ø 
Nike’s initial product
advertising strategy of using professional athletes for increasing demand was
through word of mouth and also provides the good publicity.

Ø 
Nike changes its target
market from teenagers to younger consumers due to intense competition with
Adidas and Reebok and also to expand its target market.

Ø 
During the time of recession
consumers was willing to pay on that brand because Nike having superior
quality, style and reliability. Nike generates the higher revenue from its
competitors because of its Slogan “Just Do It” and strong product. (Deng, 2009)

Ø  It also introduces the digital sports and e-commerce in its recent years
due to changes in technology trends.

Ø 
It introduces the Nike+
running sensor in collaboration with Apple Inc. and other products like fuel
brand personalize the hi- tech experience for the customers. (Soni,2014)

Ø 
Nike has been launched its
technologically advance shoe models from time to time through innovative
advertisements , celebrity endorsements , successful association and event
sponsorships.

Ø  Company still faces many challenges in this changing fashion trends and its
sale is falling in the shoes category and increased competition. After these
changes though it is trying its best to create the good position in the market
and make products according to fashion trends (Aid, 2005).

Market Trends of Adidas

ERIC LIEDTKE, EXECUTIVE BOARD MEMBER RESPONSIBLE
FOR GLOBAL BRANDS Quotes the following: “We are closest to every consumer with our
unique brand portfolio.  In the future, we will not only talk to and talk
with our consumers. We will be the first sports company that invites athletes,
consumers and partners to be part of its brands. We will open up so that they
can co-create the future together with us.”

As a Group we have taken three clear strategic choices that we want to
focus on: Speed, Cities and Open Source. Our People will bring them to life.

?’Creating the New’
is the headline for our next five-year strategic business plan. ‘Creating the
New’ is the attitude that leads us into the future – an exciting future,
because our industry is growing in size and scope and will continue to do so.
In fact, the sporting goods industry is growing faster than most other
industries, including consumer electronics. This trend will continue. Sport is central to every culture and society and is
core to an individual’s health and happiness. All of this is very good news to
us because our core competency is sport. Through
sport, we have the power to change lives. We work every day to inspire and enable people to harness
the power of sport in their lives. We also translate our competence in sports
into streetwear and fashion because sport is an attitude and a lifestyle. Everything
we do is rooted in sports.  

At
the very heart of ‘Creating the New’ are our brands. Our brands are what
connect us with our consumers; therefore, the success of our brands defines the
success of our business. Our core brands – adidas, Reebok and TaylorMade – have
strong identities in sport. adidas appeals to athletes, Reebok focuses on the
fitness consumer and TaylorMade is all about the golfer. Through our
unique portfolio of leading sports brands, we cater for the needs and
desires of more consumers than any of our competitors. With ‘Creating the New’,
we will get closer to them than ever before. To achieve that, our plan is based
on three strategic choices:

Ø 
Speed: We will become the first true fast sports
company: Fast in satisfying consumer needs, fast in internal decision-making.

Ø 
Cities: We have identified six key cities in which
we want to grow share of mind, share of market and share of trend.

Ø 
Open source: We will be the first sports brand that
invites athletes, consumers and partners to be part of our brands.

‘Creating
the New’ is an ambitious, yet realistic plan that provides the layout for our
accelerated growth, both on the top and on the bottom line between now
and 2020.

MAKING IT SUCCESSFUL WILL BE A TRUE TEAM EFFORT. WE ARE
HERE TO WIN!

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