Nike and Adidas

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Nike vs. Adidas: Constant Competition for Industry Dominance Every generation of man has seen sport as an integral part of the social order. From the ancient civilizations to contemporary society, humankind has recognized both the importance of the improvement and maintenance of physical fitness as well as the entertainment inherent in competition. A symbol of physical prowess, skill, determination, and discipline, the athlete has always held a revered place in society. Athletes, depending on the sport in which they engage, require apparel and accessories to compete as best they can. This fundamental necessity for the sportsman has created a massive market for sportswear, apparel and athletic accessories. Two companies that have taken the most advantage of the potential for growth in this industry are Nike and Adidas. These corporations sit atop the industry for many reasons, but on the whole they can attribute their success to their intensive research and intimate knowledge of the athlete and his or her specific, nuanced needs. As sports constantly evolve and technology rapidly advances, so, too do the needs of athletes. Nike and Adidas, in their innovation, design, and marketing, have paid the closest attention to these ever-changing needs and thus have established themselves as the most financially successful and well-known brands in the industry. This intent of this paper is to analyze Nike and Adidas in the context of one another as competitors, in the context of athletic apparel industry as a whole, and in the context of the global economy, which has become dominated by multinational corporations. I will begin by providing a brief background of each company and establishing commonality between them to elucidate the relevance and importance of a comparison. I will then highlight their financial differences, discussing trends in growth and each firm’s market share in the industry. Next, I will examine the broad trends and intricacies involved in each company’s marketing strategy, focusing on brand imaging and types of marketing campaigns employed. Finally, I will summarize their practices of international production, focusing on outsourcing and corporate social responsibility, and noting the scrutiny both companies have received for questionable production practices. I will supplement my analysis with data and statistics from the U.S. Bureau of Labor, as well as various academic databases and resources. I will conclude by offering each company various policy suggestions to improve or maintain competitiveness in their industry. Background and Similarities

As fitting as any foundation could be, Nike was founded by Philip Knight, a track and field athlete, and his coach, Bill Bowerman in 1962 at the University of Oregon. At the time of its founding, Nike was called Blue Ribbon Sports. The company rose to prominence when Knight secured a single distribution contract with a small Japanese footwear apparel company, Onitsuka Tiger. A coach interested in improved player performance, Bowerman had previously designed shoes for athletes, and ultimately teamed up with Tiger to create one of the best selling athletic shoes in the world: the Tiger Cortez shoes. In 1972, Blue Ribbon Sports parted ways with Tiger and officially became Nike Inc. Of particular interest is the fact that after being graduated by the University of Oregon, Knight wrote a paper in graduate school discussing the German dominance of the athletic footwear industry and ways to potentially end this dominance. The company at the forefront of this dominance was none other than Adidas. Adidas was founded in Germany in 1949 by a young Bavarian named Adolf Dassler, who began making sports shoes in his mother’s kitchen after he returned from World War I. Dassler gained notoriety when he drove to Munich during the 1936 Olympics and successfully persuaded gold medalist Jesse Owens to wear his shoes. This established his reputation in the sporting world as a prominent...
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