Market Analysis of Sports

Apparels and accessories

manufacturers

VIT BUSINESS SCHOOL

Contents

VIT Business School: ..................................................................................................................... 3

Introduction to Adidas: ................................................................................................................... 4

Products ....................................................................................................................................... 5

Brand Image ................................................................................................................................ 7

Corporate information ................................................................................................................. 7

Current executive board ........................................................................................................... 7

Financial information .............................................................................................................. 8

Market Turnover Analysis .............................................................................................................. 8

Capital Labour Ratio ....................................................................................................................... 9

Conclusion: ................................................................................................................................... 12

VIT Business School:

VIT University was established in 1984 by well-known educationalist and former

parliamentarian, Dr. G. Viswanathan, Founder and Chancellor. Dr. V. Raju, Former Professor of

State University of New York, USA, currently the Vice Chancellor, Dr. Anand A. Samuel, Pro-

Vice Chancellor. Chennai Campus is in Vandalur-Kelambakkam Road.VIT University has more

than 17 Bachelor’s and 32 Masters’ programmes, 29000 (including 1000 foreign students from

44 countries) and 4000 faculty members

Accreditation:

The National Assessment and Accreditation Council (NAAC) of the University Grants

Commission (UGC) has accredited the university with a 'A'.

The Institution of Engineering and Technology (IET), and the Energy Institute, UK have

audited the teaching-learning processes at VIT and accredited the programmes in 2004, with

the highest validity of five years

Programmes at VIT are accredited by the Institution of Engineers, India (IEI).

The Accreditation Board for Engineering and Technology (ABET) of the USA accredited the

Civil, Mech, CSE, biomedical, ECE, EEE programmes.

VIT Business School, under the aegis VIT University has created a niche for itself as an

institution promoting excellence in management education and research with Dr. M J Xavier as

its Executive Director.

Introduction to Adidas:

Adidas AG is a German multinational corporation that designs and manufactures sports

shoes, clothing and accessories based in Herzogenaurach, Bavaria, Germany. It is the holding

company for the Adidas Group, which consists of the Reebok sportswear company, TaylorMade-

Adidas golf company (including Ashworth), Rockport, and 9.1% of FC Bayern Munich. Besides

sports footwear, Adidas also produces other products such as bags, shirts, watches, eyewear, and

other sports- and clothing-related goods. Adidas is the largest sportswear manufacturer in Europe

and the second biggest in the world, after Nike.

Adidas was founded in 1949 by Adolf Dassler, following the split of Gebrüder Dassler

Schuhfabrik between him and his older brother Rudolf. Rudolf had earlier established Puma,

which was the early rival of Adidas. Adidas and Puma are both currently based in

Herzogenaurach, Germany. The company's clothing and shoe designs typically feature three

parallel bars, and the same motif is incorporated into Adidas's current official logo. The name

ADIDAS was coined from "Adi" (a nickname for Adolf) and "Das" (from "Dassler").

The acquisition of Reebok also allowed Adidas to compete with Nike worldwide as the

number two athletic shoemaker in the world.

Adidas has many business locations around the world such as Portland OR, Hong Kong,

Toronto, Taiwan, England, Japan, Australia, and Spain. Mainly sold in the U.S., Adidas makes

lots of assets from these countries and is expanding to more overseas countries.

In 2005, Adidas introduced the Adidas 1, the first ever production shoe to use a

microprocessor. Dubbed by the company "The World's First Intelligent Shoe", it features a

microprocessor capable of performing 5 million calculations per second that automatically

adjusts the shoe's level of cushioning to suit its environment. The shoe requires a small, user-

replaceable battery that lasts for approximately 100 hours of running. On 25 November 2005,

Adidas released a new version of the Adidas 1 with an increased range of cushioning, allowing

the shoe to become softer or firmer, and a new motor with 153 percent more torque.

On 11 April 2006, Adidas announced an 11-year deal to become the official NBA

clothing provider. They will make NBA, NBDL, and WNBA jerseys and products as well as

team-coloured versions of the "Superstar" basketball shoe. This deal (worth over $400 million)

takes the place of the previous 10-year Reebok deal that was put in place in 2001.

On 3 November 2011, Adidas announced that it would acquire outdoor action sport

performance brand Five Ten through a share purchase agreement. The total purchase price was

$25 million USD in cash at closing.

By the end of 2012, Adidas is reporting the highest revenues ever and Chief Executive

Herbert Hainer expresses optimism for the year ahead.

Products

ADIDAS famous products are,

Apparel

Running

Association Football

Tennis

Golf

o Company timeline

o Product

Cricket

Basketball

Lacrosse

Jiu Jitsu

Rugby

Gymnastics

Skateboarding

o Team

Professional

Amateur

Baseball

Field hockey

Accessories

o Sandals

Adilette

Santiossage

Adissage

Other sandal brands

Apparel

The first ever piece of apparel created by Adidas was the Franz Beckenbauer tracksuit.

One of the main focuses of Adidas is football kit and associated equipment. Adidas remain a

major company in the supply of team kits for international association football teams and clubs,

including Bayern Munich, Real Madrid, Chelsea, Manchester United (starting in 2015-16) and

A.C. Milan.

Adidas makes referee kits that are used in international competition and by many

countries and leagues in the world. The company has been an innovator in the area of footwear

for the sport, with notable examples including the 1979 release of the Copa Mundial moulded

boot used for matches on firm dry pitches. It holds the accolade of the best selling boot of all

time. The soft-ground equivalent was named World Cup and it too remains on the market,

timeless and iconic.

FIFA, the world governing body of football, commissioned specially designed footballs

for use in its own World Cup tournaments to favour more attacking play. The balls supplied for

the 2006 World Cup, the Teamgeist, were particular noteworthy for their ability to travel further

than previous types when struck, leading to longer range goals.

Adidas also introduced another new ball for the 2010 World Cup. The lighter and more

aerodynamic ball led to many shots and passes being over hit. The Adidas Brazuca was the

match ball of the 2014 World Cup. In November 2009 World Number 4 Andy Murray was

confirmed as Adidas's highest paid star with a 5-year contract reported to be worth $24.5m.

Players sponsored by Adidas can take advantage of the Adidas Player Improvement

Program, where the company provides coaches, fitness trainers and sports psychologists to

players in order to further their careers. The program includes legendary coaches such as Darren

Cahill and Sven Groeneveld.

Adilette

Adilette was the first ever pair of sandals made by Adidas, originally developed in 1963.

Adidas claims that a group of athletes approached Adi Dassler requesting a shoe be made for the

locker room.

To this day, the resulting sandals are a best-seller. Since the original Adilette sandals

were created nearly fifty years ago, more varieties have been created in different colours (black,

red, green, grey, orange, brown, yellow, pink, golden, silver). Most recently, Adidas has

introduced a colour scheme that goes along with its Predator and adizero line; the scheme is

dubbed warning (orange) and purple. Usually, seven stripes appear on the strap of the classic

models. The most common adilette livery is in navy blue or black, mixed with white colours.

Also the Woodilette and Trefoil models follow the same design but without stripes on the strap.

The model provides a contoured orthopedic rubber sole with synthetic upper, and was

designed as an après-sport slide, but the adilette were quickly used everywhere out of sport's

world. Opting for a wide, over the foot strap rather than the design of flip flops, the adilette

sandals provide a fresh style and a different level of comfort for the wearer. The strap is also

glued to the sides of the sandal, which directs tension to less stressful areas of the sandal, which

gives the sandals more durability.

Santiossage

The Santiossage is a uni-sex slide-style sandal. The sandal has the trademarked three

stripes on a velcro strap toward the front of the shoe. Santiossage comes in black, navy, or red.

On the side of the shoe, toward the heel on either side, the manufacturer's name appears, as well

as on a round emblem in the actual heel of the foot-bed. Notably, there are tiny clear massage

nubs throughout the foot-bed for the purpose of massaging after-sport footaches, although the

sandals are worn casually among non-athletes. Seen through these clear nubs are Adidas' three

stripes.

Adissage

Adissage is also a uni-sex slide-style sandal. Available in black, navy, light blue, black

with pink, and other assorted colors, the sandal has the trademarked three stripes on a velcro

strap toward the front of the shoe. On the side of the shoe, toward the heel on either side, the

manufacturer's name appears, as well as on a round emblem in the actual heel of the footbed.

Like the Santiossage, there are tiny black massage nubs throughout the foot-bed for the purpose

of massaging foot aches after sport, although popular as a casual sandal amongst non-athletes as

well.

Brand Image

Adidas, like other sports brands, is believed to engender high consumer brand loyalty.

Brand loyalty towards Adidas, Nike, Inc., Puma AG and several other sportswear brands was

examined in a recent study. The study found consumers did not exhibit unduly high loyalty

towards such brands.

"Adidas is all in" is the current global marketing strategy for Adidas. The slogan aims to

tie all brands and labels together, presenting a unified image to consumers interested in sports,

fashion, street, music and pop culture.

"Impossible is Nothing" was the previous mainstream marketing slogan for Adidas.

Corporate information

Current executive board

CEO: Herbert Hainer

Chief Financial Officer: Robin J. Stalker

Global Brands: Eric Liedtke

Global Operations: Glenn S. Bennett

Global Sales: Roland Auschel

Company Analysis:

Financial information

Financial data in millions of euros

Year 2008 2009 2010 2011 2012

Sales 10,084 10,299 10,799 10,381 11,990

EBITDA 1,078 1,165 1,280 780 1,159

Net income 483 551 642 245 567

Net debt 2,231 1,766 2,189 917 221

Market Turnover Analysis:

Market Capital is the product of outstanding shares of the company and the current share

price, it is an important element in gauging the size of a company. The following pie chart is a

distribution of the market share for the top 5 sports apparels in India. It provides an insight to the

market capitalization of each company in terms of Crores.

Turnover (in $Billions)

27.04

44%

19.24

31%

8.2

13%

2.706

4%

1.58

3%

1.27

2%

1.5

3%

NIKE

ADIDAS

REEBOK

PUMA

FILA

ASICS

Capital Labour Ratio

Capital to Labour ratio measures the ratio of capital employed to labour employed.

Now let me show you the comparison of the capital-labour ratio of the top apparel

manufacturing companies as on Q2 2014.

Capital Labour Ratio

WEKA Forecast

Weka is a collection of machine learning algorithms for data mining tasks; Weka is used here to

forecast the share price of Adidas using data of the last traded price. The forecast uses data of

previous month. Horizontal axis indicates the last traded share price. The bold red line indicates the

last trade price until available data, and the jotted lines indicate the predicted price.

0 20000 40000 60000

NIKE

ADIDAS

REEBOK

PUMA

FILA

ASICS

CONVERSE

Capital Labour Ratio

SPSS Chart

SPSS Software package was used for statistical analysis of data using dependent and independent

variables to forecast the share price of Adidas. Different variables such as last traded price, Opening

price, High price were used to forecast the share price. Data for analysis was taken for a period of

months prior to analysis. The blue line indicates the actual opening price of the share whereas the

red line indicates the forecasted price.

0

10

20

30

40

50

60

70

80

Chart Title

ltp estimated

Employee Turnover:

The following bar chart is a graphical representation of number of employees and the

turnover of each company. Blue bar represents number of Employees in terms of thousands and the

Red bar represents sales turnover of the respective company.

Conclusion:

I have chosen ADIDAS as my dream company in the sector of Sports Apparels and

Accessories because of ADIDAS’s grand success in today’s market and the way in which their

products tend to be unique which in turn pans out to be its success point in selling. This makes

ADIDAS a perfect company for a person interested in this sector to pursue his/her career.

0 100 200 300 400 500

NIKE

ADIDAS

REEBOK

PUMA

FILA

ASICS

CONVERSE

TURNOVER(in $ Billions)

Bibliography www.moneycontrol.com www.wikipedia.com www.adidasindia.com www.equitymaster.com

For Further details Contact:

Dr P James Daniel Paul, Professor, VIT- BS, Chennai,

jamesdanielpaul.p@vit.ac.in

Tel: +91 44 3993 1040

HP: +91 98402 94590

Mr. Surendra prasanna.R , Student VIT-BS, Chennai prasanna.payne@gmail.com Ph: +91 8870735732