Adidas Group Is A Multinational Thesis

Length: 8 pages Sources: 1+ Subject: Business Type: Thesis Paper: #85534270 Related Topics: Multinational, Multinational Corporation, Michael Jordan, Multinational Companies
Excerpt from Thesis :

This is based on both historical precedent and the fact that the firm has started to see year-over-year revenue declines. The company remains highly leveraged and although they are expected to remain liquid, this reality will place some constraints on Adidas. The company is likely to remain in a holding pattern for the next year, awaiting both economic recovery and the two major marketing events in 2010 -- the Winter Olympics and the World Cup. Thus, the best trading strategy for Adidas in the short-term is to hold.

The long-term strategy, however, will be different. Going out as far as 2015, the decision needs to be made based on the broader trends in the company's business and the likelihood of it extending its competitive advantages and core competencies. As noted, the greatest strength of Adidas is the economies of scale it achieves, in particular with respect to its international marketing campaigns. With respect to this tactic, the company appears well-positioned for the future, although there remains doubt about their ability to rebuild the Reebok brand. Adidas has aligned itself with many top athletes and events, such that the company will continue to have a premium image that will allow them to command substantial margins for their products. In this respect, there does not appear to be a significant threat to the company's business model.

The firm's finances will continue to improve over this period. The company has a long-term strategy in place to reduce costs, improve margins and reduce the debt that it acquired via Reebok. As such, liquidity and leverage positions are expected to improve over the long run. Margins will continue to show incremental improvement as well. The company's marketing efforts have generated consistent revenue gains and this is expected to continue going forward as well, a function of their more focused approach and continued integration of Reebok.

The global economy will recover. As it does, share prices will improve as well. This rising tide will float all boats, that of Adidas included, especially in light of expected improvement in operating results. As such, the current low level of Adidas

...

The firm does not have a source of sustainable competitive advantage, so it remains at risk of losing market share to Nike or another competitor. However, it does have strong core competencies that will allow for consistent revenue and profit improvement. This will help propel the share price higher over the course of the next several years. Moreover, the overarching strategy of tighter focus and debt reduction is a strong strategy for the future. The company is pointed in the right direction and will therefore see an improvement in stock price that may exceed market improvement.

It should also be noted that there are few direct threats to the Adidas business. The company is not at any particular risk with respect to the political or legal environments. In the athletic footwear and apparel business, there are few risks with respect to technology. Game-changing technology of the kind that would severely compromise Adidas' market position is not expected to emerge as the focus of almost all players in the market is strictly towards marketing efforts, with technology relegated to a marketing ploy at this point. There is the risk that another athlete will become the next Michael Jordan and deliver correspondingly strong market share growth to a competitor, but there is just as much likelihood that Adidas would win that athlete for their own stable, given their strategy and capability with respect to signing such athletes.

Overall, Adidas is a strong company with solid growth prospects. In the short run, they can be expected to track the broader market closely, but their operational strengths will help them to achieve strong long-term growth. That said, it is unlikely that the Adidas of 2019 will look much different than that of 2009, so the buy recommendation comes with the caveat that by and large the firm's success will depend on its ability to outmarket competitors, especially Nike.

Works Cited:

Some financial data from Reuters. Retrieved June 18, 2009 from http://www.reuters.com/finance/stocks/incomeStatement?symbol=ADDDF.PK

Adidas Group 2008 Annual Report. Retrieved June 18, 2009 from http://adidas-group.corporate-publications.com/2008/gb/index.php?lang=en

No author. (2005). Cricket Australia and Adidas Ink Four-Year Partnership Deal. Indian Television.com. Retrieved June 18, 2009 from http://www.indiantelevision.com/mam/headlines/y2k5/may/maymam21.htm

Bajak, Frank. (2005). First Computerized Shoe Thinks on its Feet. MSNBC. Retrieved June 18, 2009 from http://www.msnbc.msn.com/id/7643818/

No author/Associated Press. (2006). Adidas Broadening Reebok Brand Identity. Money.co.uk.…

Sources Used in Documents:

Works Cited:

Some financial data from Reuters. Retrieved June 18, 2009 from http://www.reuters.com/finance/stocks/incomeStatement?symbol=ADDDF.PK

Adidas Group 2008 Annual Report. Retrieved June 18, 2009 from http://adidas-group.corporate-publications.com/2008/gb/index.php?lang=en

No author. (2005). Cricket Australia and Adidas Ink Four-Year Partnership Deal. Indian Television.com. Retrieved June 18, 2009 from http://www.indiantelevision.com/mam/headlines/y2k5/may/maymam21.htm

Bajak, Frank. (2005). First Computerized Shoe Thinks on its Feet. MSNBC. Retrieved June 18, 2009 from http://www.msnbc.msn.com/id/7643818/
No author/Associated Press. (2006). Adidas Broadening Reebok Brand Identity. Money.co.uk. Retrieved June 18, 2009 from http://www.abcmoney.co.uk/news/01200716548.htm


Cite this Document:

"Adidas Group Is A Multinational" (2009, June 18) Retrieved December 1, 2021, from
https://www.paperdue.com/essay/adidas-group-is-a-multinational-21097

"Adidas Group Is A Multinational" 18 June 2009. Web.1 December. 2021. <
https://www.paperdue.com/essay/adidas-group-is-a-multinational-21097>

"Adidas Group Is A Multinational", 18 June 2009, Accessed.1 December. 2021,
https://www.paperdue.com/essay/adidas-group-is-a-multinational-21097

Related Documents
Business Corporate and Global Strategies for Adidas
Words: 1214 Length: 4 Pages Topic: Business Paper #: 59640993

Adidas' Strategic Evaluation and Recommendation Adidas is a multinational corporation that deals with sportswear. The company deals with the production, designs and the creation of sports clothing and accessories. The company has been able to develop to become one of the leading companies in the world with its products being sold across the globe (Mahdi, Abbas, Mazar, & George, 2015). The company faces a lot of competition from some of the

Nike's Strategic and Financial Position Analysis
Words: 5968 Length: 22 Pages Topic: Business Paper #: 38851168

Nike's Strategic And Financial Position Analysis Nike is a globally recognized multinational corporation founded by the Stanford Graduate School of Business graduate, Phil Knight, and Bill Bowerman who was the track and field coach at the University of Oregon. The two appear to be a natural fit as each hailed from a background that would appreciate the underlying design that goes into creating a quality running shoe. Nike's global operations in aggregate

Social Media Summative Assignment Week 5
Words: 1964 Length: 5 Pages Topic: Psychology Paper #: 19779086

relevance of a well-developed social media policy cannot be overstated. This is more so the case given that in addition to ensuring that their public image and reputation is not tainted; organizations need to protect themselves against liabilities arising from the actions of their employees. A new employee could be overenthusiastic about their new position and deem it fit to post, blog, and tweet about the said position and

Branding and Communication
Words: 3429 Length: 12 Pages Topic: Business - Advertising Paper #: 34723326

Branding and Communication There has been significant criticism leveled against the branding practices of companies, and most particularly those of multinationals, which have been raised. Drawing on the academic literature this work will identify the primary arguments used in these critiques and will critically examine those arguments and discuss their implications for branding in the age of globalization. This study will further answer the question of how branding has changed under

Human Rights Violations Are a
Words: 6004 Length: 22 Pages Topic: Business Paper #: 96847955

As it pertains to sweatshops, indications that the company was operating sweatshops came first in 1998. During this time sweatshops were found in Asia and the company was only paying workers 80 cents per day. Nike's behavior in both these instances created a backlash that is still present. Prior to the findings of human rights violations, Nike had a good reputation as an employer. However, after the presence of human

Quiksilver, Inc. Case Study Brief
Words: 2910 Length: 10 Pages Topic: Business Paper #: 82348010

37). This approach is highly congruent with the guidance of marketing experts such as Wheaton (2004) who advises, "There are synergies between different lifestyle sports industries and their media. Corporations make equipment for several lifestyle sports, sometimes under different brand names. Clothing companies like Quiksilver sell to a range of lifestyle sport markets including skating, surfing, windsurfing, snowboarding and have been quick to exploit the potential of emergent and rapidly