Growth strategy of Adidas

Write an article on growth strategy of adidas Paper must be at least 5000 words. The moSt critical is due facing adidas Its effort to turn around Reebok. The company bought Reebok for $3.8 billion 2006, a move criticized by many analyst as being too expensive. The company is working to change customers perception Reebok from that of a discount shoe brand to a premium brand. As part of these efforts, the company has switched the Reebok wholesale model from bulk pre-order to pay as you go. Wholesale customers like Footlocker now order Reebok shoe as they need them rather than ordering them in bulk. This makes it less likely that larger retailers will discount Reebok shoes in order to clear their inventories. Adidas at its core, an international company with only 30% of its 2007 sale coming from North America. Moreover, it is rapidly expanding its presence in emerging markets like Asia and Latin America. Because it targets the wealthiest segments of the market the company leads its competitors in sale in Japan, Korea, India, Thailand, Indonesia, and New Zealand. sales growth in its core emerging markets in Latin America and Asia have has topped 24% in the last several years. By 2010, management expect China to be its second biggest market. (Coopers and Lybrand, 2004, 77-84) Adidas Group generates revenue by selling its products to retail stores or directly to the customer via one of the brands concept store, factory outlets, concesion corners, or online stores. Of this revenue, 46% is from footwear, 42% from apparel, and 12% from hardware. In 2007 the company had €10.3 billion in revenue ($13.7 billion based on the average 2007 exchange rate), which was a 7% currency-neutral increase over 2006? revenues of €10.084 billion ($12.557 billion). While operating margin has dropped overall since 2005, this can be attributed to the cost associated with integrating Reebok, which has resulted in extra operating expenses of over $30 million during the past two years.