Nike vs Adidas Essay

My area of study for this intention would be more on comparing the performances for Nike and Adidas for the past 5 grades. In this range I would explain the performance such(prenominal)(prenominal) as harvest-home in clears, revenues, market share, the follow employers and employees, coat of the market share, steps for change magnitude the cordial performance, products performance, dividends per share, assets and the community investment. Nike and Adidas and cause been the top ii leading drama companies in the gaming sedulousness over the past a couple of(prenominal) decades.These two companies sell and offer wide compass of products for the customers and their products offered is mainly on fluctuations accept for men and women and caters to consumers from diverse age groups. Their products consist on clothing such as jerseys, shirts, t-shirts, shorts and pants. These companies also provide the customers varieties of footwear such as sports shoes, casual shoes, bo ots, sandals and armoryings. overly that, fashion accessories are also offered from these three companies such as bags, watch, bracelets, wallets and purse.And lastly they also offer a wide range of sport gears for their customers. Nike and Adidas have also been the top sponsors in the sport industry. Sponsoring their products is meaning(a) for the companies to get brand recognition, building their brand image and to promote their in vogue(p) products. Nike and Adidas have been sponsoring equipments, clothing and accessories for athletes and coaches in sport tournaments and events. For instance, these three companies sponsor their products for football, soccer, basketball, baseball game and many more. These companies also include slogan and slogan for their association.Nikes motto is Just Do It which is the signature of the brand which makes their products and the company recognizable to consumers. As for Adidas, their current motto is Impossible is Nothing which serves as an encouragement to athletes for their sports. Origins and account statement of Nike and Adidas Nike, originally ben as Blue Ribbon Sports was founded by University of Oregeon overfly athlete Philip Knight and his coach Bill Bowerman in January 1964. The company ab initio operated as a distributor for Japanese shoe maker Onitsuka Tiger, devising most sales at track meets out of Knights automobile.The companys profits grew quickly, and in 1966, Blue Ribbon Sports undecided its first retail store, located on Pico Boulevard in Santa Monica, California. By 1971, the relationship mingled with Blue Ribbon Sports and Onitsuka Tiger was nearing an end. BRS prepared to sling its own line of footwear, which would bear the newly designed Swoosh by Carolyn Davidson. The Swoosh was first used by Nike in June 1971, and was registered with the U. S. Patent and tag Office on January 22, 1974. Adidas was founded in 1948 by Adolf Adi Dassler, following the split of Gebruder Dassler Schuhfabrik between him and his older brother, Rudolf.Rudolf would later establish cougar, which was the early rival of Adidas. Registered in 1949, Adidas is currently based in Herzogenaurach, Germany. The companys clothing and shoe designs typically feature three parallel bars, and the same motif is incorporated into Adidass current official logo. The Three Stripes were bought from the Finnish sport company Karhu Sports in the 1950s. Objective The objective of the project is to measure and compare the merchandise strategies of the top two sport fashion companies which are Nike and Adidas.So this project would be mainly conducted to resolute the similarities and differences of the two sport companies selling strategies. Besides that, this project give compare on the performance of Nike and Adidas which include the companys growth in revenues, profits or force out income, dividends per share, size of company in the market, performances of employees, steps for increase the social responsib ility performance, products performance, stock performance and the company performances in investment. Problem StatementFirstly, the sport industry is becoming ever more competitive, with new brands competing for a share of consumers for the products in the market. Building a relationship with customers is a challenge facing for Nike and Adidas. This is because the companies motif to be followed up with new trends and styles in the industry for their customers in baffle for them to build their products brand and image. Secondly, there was a case happened in mainland China where a local Chinese domestic sports goods manufacturer company called Li Ning opened 6917 stores in mainland China by December 31,2008 aking it 1241 more than the family of 2007.During the grade 2008, Li Ning has published its financial report which states that collectable to the capital of Red China Olympic Games, the company made tot revenues of CNY 669(one thousand thousand) a stratum on- year- profit o f 53. 8% compared to the year 2007. Not only that, Li Ning made an overall accounting entry into the market of southeast Asia. Now they have stores in Singapore, Malaysia, Indonesia and other Southeast Asia countries. This became a problem for Nike and Adidas where the two international giants see recession in their performance in China.According to the financial report of Adidas, the companys net profit diminish by 95% to 130 million in the first half of the year. As for the sales revenue, it decreased by 2% to 5. 03 billion. As for Nike numbers of distributors were reduced in the year 2008 due with the bad performance. Thirdly, the problem that attracted me to do this project is because I would like to cognize why Nike had low growth in revenue in the year of 2009. Nike had only change magnitude 3% of its revenue to $ 19176. (million), with net income falling 21% to $ 1486. 7(million). As for Adidas, they also had the same problem. nevertheless the problem for Adidas was w orst compared to Nike because at the year of 2009, the company net income is 10381(million) which decreased compared to the year 2008 which is 10799(million). These two companies had their difficulties is the year of 2009. So I would eager to find out about the problems they approach during that year. Significance of StudyThe importance of doing this project would be very eventful to other parties and companies. In this case, small and medium enterprise (SME) would get the advantages and benefits because they would know how the outsizedger companies such as Nike and Adidas operates their businesses, how they sell their products and services to their customers, what kind of marketing strategies they use, how the companies measure their performances and the most valuable reason is how Nike and Adidas continues to become a bombastic market player in the sports industry.As part of that, this project will comprise mainly of small to medium-sized companies to engage in a variety s how of activities which includes manufacturing of sport goods, sport tourism, media, and construction of venues. For example, small and medium enterprise (SME) in Malaysia can take the opportunity to get involved with sport products, services, sponsorships, hosting up international sport tournaments and events.And not to forget, the involvement of (SME) would also helps our country in the tourism sector because many athletes and participants will get to travel and cut down our country and this will relatively build the countries economic performances. Corporate social responsibilities (CSR) also play a region for every sport companies in responsibility to act in a way that positively contributes to their stakeholders and the communities in which they exist.In this case, it is change magnitudely outstanding for the social and economic issues such as rapid technological change, a diverse and aging population, environmental changes and climb concerns regarding the countrys growing social divide have resulted in focusing on the responsibility of firms to the communities in which they operate. (Margolis & Walsh 2003 Sagawa & Segal 2000) confession The reason I chose this topic is because the project is interesting as sports is an important part of todays society and plays a large role in many peoples lives.From a social standpoint, sport plays a positive role in uniting people from different social backgrounds. This can aid peoples understanding and valuation account of each other. As far as education is concerned, sport is an important part of every childs schooling, as it plays a big role in both their physical and mental development. It teaches children how to work as a part of a team and cooperate with others, while at the same time improving physical condition. The second reason I chose sports industry because this industry is growing rapidly in Malaysia.There are continuous demands from customers, sports athletes, and models for these sport produ cts. The Malaysian sport industry is considered as a young industry comprising of small and medium-sized businesses. The Malaysian sports industry comprises of companies engaging in a diversity of activities, from the manufacturing of sport goods, sport tourism, media, to the construction of sport facilities. The trey why I chose these two companies is because Nike and Adidas has been the biggest market share player in the sports industry.Nike controls 31% of acrobatic sportswear which is the highest market share compared to other sport companies in the year 2007. As for Adidas, they control the second highest share of athletic sportswear which is 16% of the market in 2007. As for other companies Puma controls 7%, Reebok 6%, New Balance 6%, and Converse 4%. Expected Outcomes The expected outcome which I can conclude is Nike would have the die performance for this year 2010 because their net income/profit for the past few years have been stable. Ever since the year of 2006, Nikes n et income/profit stands at $ 1392. (million).As for the year 2007, it increased to $ 1491. 5(million). At the year 2008, Nikes net income/profit increased with huge and outstanding amount of $ 1883. 4(million). But by the year of 2009, their company had a decreased in their net income/profit which is $ 1486. 7(million). As for Adidas, the company would not have a advance performance compared to Nike because in the year 2009, their net income was only 245(million). Their net income decreased with a huge margin compared to the year 2008 which is 642(million). So the key impress from the financial statement of year 2009.The net income of Adidas reduced more than 60% in 2009. But Nike was capable of stabilizing the results with a minor lessening of only 20% in 2009. As for the performance of dividend development, Nike has shown increases in its number. For the year 2006, Nikes dividends declared per common share stands at $ 0. 59. Their company dividend increased to $ 0. 98 in the year 2009. But as for Adidas, they showed a exasperate from the year 2006 to 2009. In the year 2006, Adidas dividends declared per common share stands at 0. 42. While in the year 2009, Adidas dividends declared per common share tangle to 0. 5.As for the expected outcome for the year 2010, Nike would be expected to increase their dividends successfully because their dividend declared per common share has been rising steadily. As for the companys asset assessment, I can expect that Nike would do better in the assets performance in the year 2010 because their total assets have been increasing from the year 2006-2009. The total of assets that Nike had in the year 2006 was $ 9,869(million), in the year of 2007, Nikes assets increased to $ 10,688. 3(million). Last year, Nike had a total of assets of $ 13,250(million).This shows that Nikes assets have been increasing and it is expected to rise in the year 2010. As for Adidas, their companys total asset is not stable from the year shown in 2006-2009. In 2006, Adidas totals assets stands at 8379(million). It decreased on the following year to 8325(million). As for the year 2008, their total assets were increased to 9533(million). As for 2009, their total assets decreased to a total of 8875(million). Ever since Adidas total of assets is not stable, I can expect that Nike would do better in the assets performance.Referenceshttp//condor.depaul.edu/aalmaney/StrategicAnalysisofNike.htmhttp//www.lotsofessays.com/viewpaper/1693768.htmlhttp//en.wikipedia.org/wiki/Nike,_Inchttp//en.wikipedia.org/wiki/Adidashttp//en.wikipedia.org/wiki/Reebok