Adidas was the dominating manufacturer of sporting goods. It achieved this success by developing cleated shoes for the soccer and track and field sports. The landscape of the sporting goods industry has changes, but Adidas has not changed with it. Sporting good textiles and footwear have become popular with younger individuals as a substitute for casual wear. Soccer and track and field sports are no longer the mainstream sports. These sports have been replaced in market share by sports such as baseball, basketball, football, and fitness activities like aerobics. Adidas has not developed the marketing mix to compete in these sports and fitness activities. The participation by women in these sports is growing, yet Adidas has neglected this market by remaining a preferred supplier of sporting equipment to the middle aged male population.
Nike and Reebok are two very aggressive marketing companies with the appropriate marketing mixes for today's sporting goods markets. Both have surpassed Adidas in sales during the past decade. If Adidas is to regain its lead in the sporting goods industry it must stop living in the past, develop a marketing mix that supports the current market trends, and drop its old style of promotional advertising for a more favorable endorsement approach currently being used by its competitors. Europe has been Adidas's primary playing field, but America is, by far, the largest market. Adidas must restructure its company and cut overhead costs to compete in the United States.
It is 1993 and the Adidas Sporting Goods Company is bankrupt. Since its inception in the 1920s, Adidas monopolized the sporting goods industry until the 1970s. During this time fierce competition emerged from rival companies like Nike and Reebok. In fact, both Nike and Reebok at the time of the case writing had taken the lead in market share over Adidas. Management of the Adidas Company is in disarray and the Company's new creditors have turned to Robert Louis-Dreyfus for help in turning the company around.
External Environment Analysis
Several trends are emerging at the time of this case writing that are reshaping the playing field in the sporting goods industry. The demographics of the industry are changing. Until the late 80s the demographics of the sporting goods industry consisted largely of males. The case study suggests that the early 90s have shown trends of considerable growth in the female population in terms of interest in sports and sporting goods, but no empirical data was presented in the case writing to support this statement.
American and European cultures have seen the rise of...