Adidas Strengths

Topics: Adidas, Amer Sports, TaylorMade-adidas Pages: 2 (583 words) Published: December 24, 2010

-Strong success in Europe
-High-performance products
-Recent selling of subsidiary “dog” SalomonWeaknesses
-American athletes endorsed by adidas are not as
popular as Nike’s
-Nike gaining ground on European soccer market
-Public dissent over use of sweatshops
-Acquisition of Reebok
-Growing strength in golf industry through TaylorMade
and recent acquisition of Maxfli
-Growing revenue from opening of own retail storesThreats
-Foreign exchange rates will result in loss of actual profits

As mentioned on their website adidas has been a leader in Europe for years and have been able to become comfortable there. Another strength is that adidas-Salomon produces high-performance shoes. They have been able to attract hardcore athletes as customers due to efficiently made shoes ( adidas recently announced that it will be selling its Salomon brand to Amer Sports Corporation for $624 million. Salomon was originally acquired by the adidas Group in 1997 when it paid $1.4 billion for Salomon and its subsidiaries, including golf brand TaylorMade and cycling brand Mavic. The sale will include the brands and subsidiaries Salomon, Mavic, Bonfire, Arc’Teryk, and Cliché. Herbert Hainer, adidas-Salomon Chairman and CEO, stated that “Salomon has been a great member of our group. However, we have decided that now is the time to focus even more on our core strength in the athletic footwear and apparel market as well as the growing golf category” (Bloomberg). This move will allow adidas to rid itself of the recently slumping Salomon brand, which posted a 1 percent drop in revenue along with a 74 percent drop in operating profit in 2004. The sharp decrease in operating profit is due to recent restructuring that reduced French production of Salomon products from 55 to 35 percent with new production taking place in Romania and China. News of the sale spiked adidas’ shares up 9.2 percent, reaching its highest point in...
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