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Company History:

In 1925, in a small German village, the world got it's first taste of adidas. It was there, in a village by the name of Herzogenaurach, located 12 miles to the north and the west of Nuremberg, that those simple three stripes were brought to life by adidas' founder, Adolf "Adi" Dassler. Adi created adidas after realizing the need for performance athletic shoes. Adidas began small, producing soccer and running shoes, which ironically enough are still the main products that adidas is known for. As Dasslers experience grew, so did his reputation. Dassler became widely known as the"equipment manager of the world." His shoes were first worn in Olympic competition in 1928, and from then on he worked with everyone from Olympic athletes to national soccer teams. Some of history's greatest athletic performances are in debt to Dassler and his work. Jesse Owens wore adidas track shoes, during his spectacular Olympic performance in 1936, where he earned four gold medals. And Armin Hary was the first athlete to run the 100-m sprint in 10 seconds, also wearing adidas shoes. In 1949, Dassler created the first soccer shoe with molded rubber studs, adopting the trademark three stripes. The German National team truimphed in the 1954 World Cup wearing Adi's soccer boots with screw-in studs, which enabled the game to be played under vastly different conditions without slipping. Hundreds of world records, Olympic medals and World Cup victories stand as a testament to Adi Dassler's life work. One of Dassler's goals in producing athletic shoes was to design them according to each sport's specific demands. Dassler's drive to fulfill this goal resulted in more than 700 patents. His long list of sport shoe innovations includes nylon soles and running spikes. He considered any material that might enhance the performance of his shoes. Dassler experimented with sharkskin as a sole material and kangaroo skin for the sides of his shoes. Whatever the athlete's needs, Dassler took them into consideration when designing a shoe. Gold medals, world records and personal athletic accomplishments are the true testaments to Dassler's shoes and the effectiveness of Adi's innovations. Recognizing the genius of Dassler's work, the American Sporting Goods Industry Hall of Fame inducted Dassler in 1978 as its first non-American member. Today the world refers to Dassler as the founder of the modern sporting goods industry. Yet it was not Adi's creativity and mastery of shoe technology alone that catapulted adidas to the top of the athletic shoe industry. Dassler's wife, Kathe, and their five children all had a hand in the business. Horst, the Dasslers' first-born, perhaps made the most signigicant contribution to his father's company. While Adi's were creative talents, Horst had a head for marketing. With the combination of Dassler

shoe quality and Horst's ability to market that quality, adidas was bound for success in the athletic shoe market.

Dasslers Legacy.
Today, the legacy of the Dassler family lives on in the design and manufacture of contemporary adidas products. The same meticulous attention is paid to athletes' evolving needs. adidas keeps abreast of sport technology, incorporating the most advanced materials into its shoes and apparel to ensure performance and safety. And the company's aggressive marketing strategy is aimed at communicating adidas quality to as large and athletic an audience as possible. Though times and technologies have changed, the goal of adidas today is the same as Adi Dassler's nearly 80 years ago: to be the best sports brand in the world. Adidas has continued to gain momentum through the years. Many attribute this to adidas' quality, styling and reputation. Adidas is currently the largest supplier of athletic shoes in Europe. Adidas ranks second worldwide, with their products selling in almost 200 countries. In 1994 alone, adidas sales totaled 3 billion dollars. In late 1995, adidas went public with its stock. It was a tremendous success and continues to trade internationally. Adidas posted an amazing 40% increase in net sales in the first half of 1997. Adidas, always on the cutting edge, launched their own website in 1996. The site continues to evolve, yet maintains its simplistic and dazzling form, just like the brand with the three stripesthat is known the world over.

Logo History
For years the only symbol associated with adidas was the trefoil (flower) logo. This is the logo on top of the three you see on the right. In 1991 a new adidas logo was introduced. This logo evolved to become theperformance logo (on the bottom) featured on most adidas products today. The performance logo was actually a part of the logo used for adidas' higher line of product's called adidas equipment. The equipment line began in 1991 with a trio of soccer shoes. The trio consisted of the following.

equipment turf for turf surfaces (List $109.95) equipment hard ground for grassy surfaces (List $161.95) equipment soft ground for wet conditions (List $167.95)

These 3 shoes featured the adidas equipment logo (middle logo) and were the first of a long line of adidas equipment products. Products in the adidas equipment line were quite expensive (although not as expensive as today's Predator (List $181.95) ). At first the equipment logo was only green, but

soon a black version surfaced. The equipment line continued on for a few years and then all of a sudden adidas started using the performance logo on products that weren't part of the equipment line. The logo showed up mostly on running and workout shoes at first. The only difference was that the word "equipment" had vanished. Adidas continued to release shoes with the trefoil symbol as well. In fact, it wasn't until 1997 that adidas soccer shoes started getting the performance logo on them. This is ironic considering the performance logo started with the equipment soccer shoes. Adidas still releases products under the equipment line but they aren't as high quality (and cost) as they used to be.

Product Line
Adidas-Salomon produces under the following brand names: Adidas: footwear, apparel and hardware Erima: Apparel Bonfire: Apparel Newly acquired brands: Salomon: skis, snowboards, bindings, ski boots, cross country ski equipment, inline skates Taylor Made, golfclubs and accessories Mavic, bike wheels and rims
Eye protection Chili Cookie Cop Lizard Robin Sprocket Twini

Adventure Shoes Backlash Lo Backlash Mid EQT Arooga Lo EQT Arooga Mid EQT Badlander

Basketball shoes Downtown EQT Elevation Lo EQT Elevation Mid Squire Turnaround Violation

Cycling shoes Campiolo DirtSurfer Garda Ghissalo Off Ramp Vuelta

Tennis shoes Central EQT precision Response FYW Spitfire Lo The Open The Wells Top rank Mid

Track and Field Shoes Adistar Accelarator

Soccer shoes

Running Shoes

Training shoes

The World Cup Soccer Ball The World Cup Soccer Ball

Copa Mundial

Alfrescon Trail

4 by 1

Adistar Hammer/Discuss Adistar High jump Adistar Javelin

EQT Real Liga EQT Velez Liga Predator Traxion Cup Rapier Traxion junior World cup

Equipment Salvation

Bradenton Lo

Equipment Trident Dorsey Lexicon Extra Equipment

Adistar LD Adistar Long jump Adistar MD Adistar Race Walk Adistar Shot Put Adistar Sprint Adistar Steeple Adistar Triple jump Titan LD

Ozweego Response Response Trail Supernova

Extreme Fast Malice Roll Out Speed Trainer

Shoes/Socks

Samba Nubuc Beckenbauer Cup Etrusco Primo Studs Khaki Canvas Leisure Shoes Street Ball Basketball Shoes Samba Classics Torsion Cross II Equipment Turfs Removable Liner Turf Trainers Torsion Cross Adi Lite II Sandals Equipment Adventure Boot Malice training shoes Response IV running shoes Beach Slide Sandals Crew Socks Copa socks 3 stripe socks Logo Socks

Response Trail running shoes Loko

Shirts/Coats

Equipment T-shirt Label T-shirt "Good morning, Good bye" adidas running T-Shirt "Now that's a Red Card" T-shirt Basketball mesh tank top World Cup Hooded Sweatshirt Classic Long Sleeve T-Shirt Tread T-Shirt T-shirt with embroidered adidas lettering and stripes in a circle Burdette Jacket, Green Signature Hooded Sweatshirt Equipment Field Shirt Penarol Jerseys, one Red and one Black one Equipment Polo Slash T-Shirt Bayern Munich Jersey C4 T-Shirt Striper T-Shirt DC United Training Jersey Trefoil Logo Shirt-Original Classic, White/Sky Performance Logo T-shirt, white Performance Logo T-shirt, gray

Pants/Shorts

Retro Shorts, Black White Boxer Briefs M One Training Pants, black Field Short, green Mesh Shorts, Navy Mesh Basketball Shorts, Navy Azteca Shorts, black 3-Stripe Fleece Pants, gray Ventura Short, New Navy

Hats

Gasoline cap, Navy Visor, black Equipment Hat with suede bill, the original one (Back when equipment was the elite stuff) Navy Hat with a white trefoil White Hat with a puffed out black and silver trefoil All black hat with suede bill and raised rubber trefoil Gray fleece hat with blue logo Lil' Buddy Hat

Bags

Equipment medium bag, red Canvas backpack, navy Napali Backpack

Other

Equipment Stripe Classic Watch and box Sandstone watch Scorpion Soccer Ball Breezline Sunglasses Field Player Gloves (well not anymore, stolen at a game) Shoe Bag Baranne Shoe Polish adidas equipment keychain - Included with equipment turf soccer shoes 3-Bar Headband, white 3-Bar Wristbands, navy Soccer Bandana Lanyard, navy Footbag, green Can of adidas tennis balls

Sale of adidas footwear and apparel according to category and region:


Adidas footwear, net sales according to categories Running: 46.4% Training: 11.6% Basketball: 11.0% Soccer: 10.8% Tennis: 7.8 % Others: 12.4%

Adidas footwear, net sales according to regions Americas: 46.2 % Europe: 47.6 % Asia: 6.2 % Adidas Apparel, net sales according to categories All purpose: 62.5 % Soccer: 16.2 % Lifestyle: 7.9 % Workout: 5.2 % Others: 8.2 % Adidas Apparel, net sales according to region Europe: 64.4 % Americas: 29.5 % Asia: 6.1 %

Creation Of a product at adidas.


An immense amount of work goes into the creation of an adidas product. First, Marketing consults with the internal adidas sports and technical divisions and external sources, such as athletes and coaches, to find out where a product is needed, or where other products are falling short. After the consumers' needs and opportunities for product improvements are identified, Marketing presents the concepts to our design department, which creates products to fill these needs with innovative technologies and functional design. Development makes the actual prototypes. Marketing presents these prototypes to the retail market. Clearly, an adidas product is the result of the intense thought and creative energy of many different people at adidas. Our goal is to crate a product that is honest. In other words, adidas designs products that are intended to perform. The rule is simple, form follows function. The following is a gerneral outline of how an adidas product is created: 1. Marketing evaluates athletes' needs, develops a basic concept of how those needs should be met, and presents the concept to Design. 2. Design sketches possible prototypes to meet the needs expressed by Marketing. 3. Design and Marketing consider the prototype sketches together, narrowing the selection to those they anticipate will most successfully meet athletes' needs.

4. Design works with Development to create a prototype. 5. Marketing, Design and Development meet to review and improve the prototype. 6. Samples are wear-tested to ensure the product meets adidas standards for performance and durability and stands up to the demands of the sport for which it was designed. 7. Preview samples are presented to key accounts and consumer focus groups for feedback. Final changes are made. 8. Salesman samples are distributed to adidas sales representatives for presentation to retailers. 9. Product is delivered to retailers.

COMPANY PROFILEadidas Solomon.


In 1997, Adidas became Adidas-Salomon with its US$1.4 billion purchase of Salomon, a French manufacturer of skis and other sporting goods. The deal put Adidas one step closer to competitor and world market leader Nike, and one step ahead of Reebok. Salomon, aside from its Made and cycle brand largest sport marketeer currently very strong in market share in Europe. winter sport equipment, also owns golf club brand Taylor Mavic. The merger makes Adidas/Salomon the second in the world, and number one in Europe. Salomon is North America and Japan, and Adidas has the largest

Position and perspectives--Solomon Founded in 1947 by Georges Salomon, the Salomon Worldwide Group was established as a ski-edges workshop in the French Alps. Nowadays, the company is among the leaders in sports equipment with strong brands: Salomon (winter sports, hiking boots and rollerblade), Taylor Made (golf clubs and accessories), and Mavic (cycle components). Salomon Worldwides strength and philosophy lies in its reputation of designing true innovative products, with both technical advantages and esthetics, resulting in a true partnership with sport-oriented men and women. This strategy is supported by strong investments in R&D and marketing (respectively 5% and 20% of sales).

The company has proven its ability to quickly attain strong market positions and profitability. Its strategy is to become a leader in the "freedom actions sports":

Facing the decline of its traditional markets (winter ski and fixations), Salomon still world leader in winter sports has diversified its activities in the fast growing snowboard and in-line skates markets. Taylor Made is number two in metalwoods worldwide driven by the success of Burner Bubble irons, it is the golf brand with the strongest growth on the American market and expects to confirm its position as an innovative brand. Mavic is the world leader of top-level rims, and new products such as ultra-aerodynamic wheels are currently being studied by the company.

Corporate Responsibility
Compared to US companies Nike and Reebok, Adidas has been slow to respond to issues of corporate responsibility. It was only in June 1998 that Adidas adopted a code of conduct ("Standards of Engagement") and an internal monitoring system. Until then, Adidas had stated that it did not wish to develop a code of its own but favoured an industry-wide code similar to that drawn up by the World Federation of Sporting Goods Industry (WFSGI). To monitor these standards, Adidas has initiated an internal monitoring program, with subsequent audits of suppliers conducted all over the world by regionally located Adidas-Salomon personnel. The majority of Adidas suppliers have been evaluated for compliance with the SOE and other action plans developed with individual suppliers to improve working conditions. Adidas-Salomon has teamed up with Business for Social Responsibility, a non-profit organization which promotes corporate citizenship, to train monitors and suppliers' representatives. With the assistance of experienced environmental consultants, a manual on health and safety and environmental issues has been developed which will help to make the SOE effective in practice. Manuals on labour issues are also being developed. Next to that, Adidas-Salomon supports, through the WFSGI, projects which provide educational opportunities for working children in Pakistan and thus alternatives to stitching footballs. A similar project is being developed in India. Both involve local sports goods manufacturers, the ILO, Save the Children, UNICEF and local NGOs.

In January 1999, Adidas appointed David Husselbee as global director of Social and Environmental Affairs. Husselbee used to work for Save the Children Fund and worked on WFSGI child labour projects in Pakistan. Adidas sources most of its products from suppliers all over the globe. About 95% of its sports shoes and 60% of its garments are sourced from Southeast Asia. The increase in Adidas sales of sports shoes and garments is due to a "strict control" of international sourcing costs. The Adidas Annual Report of 1996 already states that sourcing is at the heart of the business and a crucial factor in reducing production costs. The consequences of this policy on working conditions in the supplier factories of Adidas has been described in detail which are as follow:
1. At the Formosa/Evergreen factory in El Salvador, there are about 1000

women who work 60-70 hours per week for a monthly wage of US$133. Women becoming pregnant are dismissed. Unions are being suppressed. (German TV broadcast "Monitor" 13 August 1998) 2. The monthly wage in the Chinese shoe factory Han Tin is between US$47 and US$72. Workers have to work seven days a week with forced overtime of up to seven hours a day - paid at the normal rate of pay. (Asia Monitor Resource Center and Hong Kong Christian Industrial Committee, October 1997) 3. The women workers at the Bulgarian knitting supplier Orfei earn 67 US $ per month.(Documentation of the International Forum on Clean Clothes 30 April - 5 May 1998 Brussels) 4. At the Tainan factory in Indonesia, neither the minimum wage nor the legally prescribed overtime pay are being paid. Overtime is forced and exceeds the legally prescribed maximum number of hours. Union activities are being hampered. Sanctions for mistakes are excessive in proportion to the wages paid. Health and safety are neglected. Female workers are sexually harassed. ("Cheap production in Indonesia for Germany's fashion TNCs: Steps towards alternatives", SDWIND-Materialien Nr. 7, Siegburg/Germany, November 1999) International pressure on Adidas has increased over the last couple of years, with the aim to press the company to go beyond internal monitoring. Subsequently, Adidas has started to respond to letters from international Clean Clothes Campaigns sympathizers and to talk to the German Clean Clothes Campaign. In 1999, Adidas became a member of the Fair Labor Association in the USA and applied for membership of the Ethical Trading Initiative in Great Britain. Although progress is slow and confined to selected cases of labour violations such as

Formosa/Evergreen, Adidas opted for corrective measures from the end of 1998. In June 1999 the US audit company "Verit", hired by Adidas, monitored Formosa/Evergreen and reported continued, gross violations of labour legislation. This report was communicated to the Clean Clothes Campaign by adidas, as well as a correctional action plan dated October 1999. Over a year after publication of the Formosa/Evergreen report, there is little progress, but at least first improvements are beginning to be felt by the workers: workers applying for a job are no longer asked if they are members of a union.

PROFILE OF THE COMPETITOR


Reebok, in terms of their products, is not entirely different from Nike. Reebok is involved in the design and marketing of both athletic and non-athletic footwear and apparel, as well as other various fitness projects. Reeboks market share is a distant third in the footwear industry at 11.2% (compared to 30.4% and 15.5% for Nike and Adidas respectively). Reeboks financial position has been gradually slipping for a number of years. This is evident in their declining stock price, which has fallen by over 80 percent in the last four years. Reeboks financial woes are illustrated in their declining net sales. Reeboks net sales declined 9% during the first three-quarters of fiscal year 1999. During that same period, net income declined 17%. Taking these and other factors into account leaves Reeboks current financial position, as a whole, looking bleak.

PROFILE OF THE INDUSTRY


Industry Size In 1998, Americans spent approximately $38 billion to purchase more than 1.1 billion pairs of shoes. The wholesale value of athletic shoes for the US market totaled $8.7 billion in 1998 down 8.5% from the year before. According to the Sporting Goods Manufacturers Association, athletic footwear accounts for almost 35% of all footwear purchases. In general, consumers are spending less worldwide for athletic footwear. The current domestic industry focus is on casual and comfortable shoes. Although athletic footwear sales appear to be recovering, demand is still leaning toward the "brown shoe" casual footwear with a comfortable and rugged design. This switch is due to the increasing number of workplaces adopting casual dress codes. Industry Profitability The athletic footwear industry is a challenging and saturated market. Intense competition, fashion trends, and price conscious consumers have slowed growth in this industry. Manufacturers are combating sluggish sales with radical new styles,

along with offering more styles at lower price points. Companies are looking for new ways to boost sales by capitalizing on direct Internet sales to consumers. Many companies are also increasing profitability by transferring production to cheaper offshore facilities. This segment has reached a point of maturity in the domestic market and can look forward to only modest sales growth for the long term. However, sales are improving slightly, especially in the areas of running shoes, cross-trainers and basketball shoes. Therefore, companies with strong brands will increasingly turn to international markets for growth. Industry Seasonality Overall, sales in the athletic footwear industry remain stable throughout the year. The global variance in our market balances the seasonal fluctuations. Typical trends in seasonality appear for spring apparel, the back-to-school season, and the Christmas holiday season. Industry Cyclicality In fiscal year 1999, the economy was relatively favorable for footwear manufacturers. The footwear industry and its profitability are closely tied to economic cycles. Modest inflation, low unemployment, and a booming stock market will all contribute to healthy consumer spending. The theory behind the slowdown in sales is that growth in athletic footwear and apparel is cyclically sensitive to the Olympics. Historically, years of the Olympic Games have demonstrated surges in growth followed by difficult sales periods. The outlook for increased sales trends is optimistic due to the upcoming Olympic Games slated for this year. Nike can also look forward to a boost in demand from the World Cup events.

Industry Entry and Exit Barriers:


Entry Barriers The athletic footwear industry is a very competitive and mature market. The leaders of this industry are very well established. Leaders like Nike and adidas have made the industry what it is today. Consequently, long-time competitors like Saucony and K-Swiss have been struggling for years just to keep their brands alive. This cutthroat environment has hindered the entry of new competitors. Economies of scale also contribute to the lack of newcomers into this market. In order to have an edge over the leaders, companies must be able to compete at all

levels such as reasonable pricing, efficient production, and high product quality. These things are difficult to achieve without the resources of an established manufacturer. Another key barrier to entry is the access of traditional distribution channels. When combing the shelves at stores like Sports Authority and FootLocker, it is evident that the leaders dominate the shelves. Lesser-known brands are viewed by retailers as being too risky to replace an established brand name like Nike or adidas on the shelf. These walls seem to be breaking down with the help of the Internet. The costs of overhead that come along with traditional brick and mortar retail distributors are being significantly diminished. New entrants are now able to slide into markets without these high startup costs, making it more profitable to begin production. Exit Barriers When a company decides to exit from this industry it must be aware of things such as indebtedness and its ability to meet those obligations. A company must also be cognizant of lawsuits filed by its stakeholders and claims made on any residual assets.

INDUSTRY ANALYSIS:
Opportunities

The athletic footwear and apparel industries will benefit from the currently strong economic backdrop in the United States. Spending is high and is expected to result in sales growth industry-wide. Athletic shoes and apparel have become a staple in wardrobes worldwide. This is due to both the increasing numbers of people exercising and the trend towards casual apparel. Competition is fierce at all levels in within the industry, especially among the leaders. This creates a sense of security for the companies that have been able to create a niche. Cost cutting due to restructuring of operations will give many companies the chance to price products more competitively. One area in the industry that is ever changing is research and development. The strong departments will surely capitalize on the trends of tomorrow if their efforts are successful. Increasing financial recovery in overseas markets proves to be an area of expansion for the athletic footwear and apparel industry.

E-tailing, or customer-designed internet merchandise, is threatening the traditional distribution channels, thus eliminating the "middle-man" distributors and allowing for increasing profitability.

Threats

The industry has reached a level of maturity. While style and technology in athletic apparel and footwear has reached a leveling-off point, the important aspect now is for companies to differentiate their lines. Inflation is looming over the U.S. economy, which may spark a cutback in consumer spending. Consumers are becoming savvier and may lean towards discounted items. In terms of market saturation, many of the key manufacturers in this industry have been around for many years. Consumers may be scanning the market for new and different footwear and apparel products.

ENVIRONMENTAL ANALYSIS: Top Competitor Analysis


Distinctive Competency - Marketing (Consumer Loyalty) Despite the tough times Reebok has recently come upon, reasons for optimism remain. Reebok has managed to hold the loyalty of a large portion of the industrys female consumers market. While Reeboks spending on advertising has fluctuated, individual product designs have come and gone, female consumers have, as a group, remained loyal to Reebok and their products. Can Reebok use this distinctive competency to inflict damage on adidas? Yes, Reebok can use their distinctive competency to wound adidas. If Reebok can expand their appeal to incorporate female consumers who are not currently Reebok customers, Reebok could expand their market share and take customers away from adidas products. Can adidas protect itself against this threat? Yes, adidas can protect its market share among female consumers within the industry by targeting some of our promotions to female consumers. Competitors Key Weakness Marketing (Advertising/Promotion) The leading cause of Reeboks recent tumbles stemmed from problems relating to poor marketing. Reeboks shortcoming in the area of marketing is their key

weakness. While other athletic shoe companies bombard the airwaves with commercials pushing their product lines, Reebok remains out of sight and out of mind. Can Reeboks key weakness damage their competitive position? Yes, Reeboks chances of growing their market share are slim as long as their advertising endeavors remain to be so unsuccessful. For Reebok to rebound from their current economic woes, they will have to improve the quality of their overall marketing operations. Can adidas take advantage of their competitors key weakness? Yes, adidas can take advantage of Reeboks marketing woes by doing extensive and aggressive marketing. Continuing its successful marketing programs should allow adidas to court the customers Reebok fails to draw in with their weak marketing initiatives.

Other External Forces


Demographics Opportunity Adidas once loyal market is currently aging. This means that its customers are not as athletic as they may have been in the past. However, this poses as an opportunity for adidas because they have the ability to influence the next generation of adidas customers. The older generation of adidas brand purchasers have the power to influence their children - part of the next generation of adidas loyalists. In addition, by marketing different types of shoes to this market, these existing customers will continue to be loyal to adidas. Threat The phenomenon of the aging of our most loyal market segment questions whether there is a threat that the new generation will not be exclusively loyal to adidas. In the current market there are a number of other competitors that are not mainly athletically oriented. Examples include such manufacturer-retailers as The Gap and Old Navy. Their clothing and shoes are competing with adidas. In addition, Nike is not keeping up with the latest trends and styles like some of its competitors have been. For that reason, the newer generation is attracted by Nike and Tommy Hilfiger.

Pressure groups

Opportunity An opportunity produced by pressure groups is the ability to react in a positive manner to concerns of the public as well as customers. Consumer watch groups are paying especially close attention to adidas use of sweatshops and child labor to produce our products. Adidas opportunity lies in being able to show the consumer force that they are indeed taking steps to reduce and eventually eliminate sweatshops and child labor through new policies and strict implementation procedures. Also, by responding to such consumer activism, they are portraying a positive image in that we are promoting ethics even while we are trying to be efficient and economical. Threat In the same manner, not responding to these consumer activist groups poses a threat to adidas. The negative publicity the potential to ruin a company permanently. By disregarding the voice of concerned citizens, means disregarding their customers, one of our most important stakeholders.

KEY OPPORTUNITY
The key opportunity for adidas currently is the booming economy of the United States. Currently the company has the ability and the resources to exploit this opportunity. Adidas has capitalized on the recent economic boom with higher sales and income. However, they are not using their resources to the fullest degree. There are currently many areas in which adidas is not paying attention. They have not catered to a large portion of the new generation that demand the latest trends and styles. Also, adidas must take into account the changing demographics in this country. There is a much higher proportion of Hispanics, Asians, and African Americans than there was before. These groups have somewhat different tastes that adidas should be able to satisfy. To exploit this opportunity, adidas needs to focus on who the next generation of loyal customers will be and cater to their needs. In addition, the world economy is recovering currently, which allows adidas to make an impression in foreign markets as well. adidas is strong in many foreign countries, but we need to focus on the younger market of consumers. Adidas has been doing a great deal of research and development, but if they want to increase their market share, they must look at trends while maintaining their high standards of quality.

KEY THREAT
The key threat for adidas. is market saturation. The problem is that the athletic shoe market is already full of different brands and companies. Now, there is very little

room for new companies. There is also very little room for new product innovation and growth of market share for companies like adidas. Since adidas is currently holding the second position in the market as far as market share, there is little room for them to expand. Adidas. is now competing with other athletic companies as well as companies that just sell clothing or other types of shoes. If all of these other companies merely gain a small percentage of the market, adidas will be one of the main companies to start losing market share. In response to this threat, they have to focus on keeping and increasing their market share and making sure that competitors like Nike, Rebook and Old Nay do not steal away the market share. They could do this by focusing their efforts on a broader market. This would include the younger generation that is interested in sports as well as extreme sports.