Revenue and Adidas

 Revenue and Adidas Essay

" Case 22: Adidas-Salomon"

Table of Contents

Executive Summary3

1Adidas-Salomon Strategy Overview4

2Strategic Fit of adidas-Salomon Businesses4

2 . 1adidas4

2 . 2Salomon5

installment payments on your 3Taylor-Made5

3Financial Analysis6

4Issues Facing Management & Recommendations7

5Exhibits9

Exec Summary

Since its inception in 1949, adidas have been a leader in innovation; which is also their particular main competitive advantage on the market place. Along with advancement, the company differentiates itself on the market place having its strong brand equity, maintained a strong global marketing and advertising system.

With their 1998 acquisition of Salomon, the company became adidas-Salomon, as well as the number 2 shoe company in the world. Although there were good ideal fits between adidas' and Salomon's core competencies, it is obvious the fact that divisions did not uncover these synergies. The future performance of Salomon have got lagged at the rear of expectations and It failed to provide very much anticipated expansion. Even more so, it dragged down the growth rates for adidas-Salomon overall.

To recoup the ground this lost, adidas-Salomon needs to return to its primary business which can be the shoes and clothes, and take advantage of opportunities in this division; specifically the history and sports activities style boots and apparel lines which usually expect forty percent growth. The corporation also needs to boost its market share in America to be able to substantially increase its growth costs and earnings.

The debt used to acquire Salomon has become an important concern for the finances in the company. Though financially storng and not likely to default, the company needs to look into reducing its debt to increase their profitability. 1Adidas-Salomon Strategy Review

Since its inception in 1949, adidas had been a leader in innovation; which their key competitive advantage in the market place. Along with innovation, the business differentiates by itself in the market place with its solid brand equity, supported by a powerful global promoting program.

With the first peek, the acquisition of Salomon (and vicariously, Taylor-Made, ClichГ©, Mavic, Arc'Teryx, Bonfire and Nordic) seems to be an excellent fit for adidas. The two companies are inside the sporting goods market and have well-known brand names. Both of them have strong apparel lines, and have occurrence in related geographical areas. However , it's also obvious the fact that hard-goods kinds of Salomon (skis, bindings, boot styles, and like. ), Taylor-Made (irons, woods, and like), and all Mavic products, will be unlikely to develop synergies while using apparel and footwear industrial sectors of adidas. The company may have administration and management cost savings all across the board by simply consolidating the management with the companies. The combined purchasing power of each of the business units will likely provide a better bargaining power overall. 2Strategic Fit of adidas-Salomon Businesses

2 . 1adidas

Among the value sequence activities that adidas can be superior to the mediocre is all their know-how in apparel and footwear developing. Almost all adidas-Salomon's other businesses (Taylor-Made, Salomon, etc . ) have their very own footwear and apparel lines. adidas' skills and negotiating power in apparel and footwear companies means cost savings for all businesses across the board. Nike, on the other hand, (although possible) is definitely unlikely to benefit from virtually any synergies developed by the purchase. It is not likely that Salomon skis, or Nordic brackets, or Mavic bicycle parts are sold in the same stores that nike shoes and clothing can be purchased. It should be in mind that the retail industry is also changing with mega-retailers with bigger floor spaces are emerging. These kinds of retailers bring more SKUs than and could be inclined to handle the skis and other hard goods, as well as the shoes and apparel almost all under 1 roof. These kinds of retailers, nevertheless , are not but wide-spread, and most products are sold through niche stores (winter...