General presentation of Adidas:
Although the Adidas group no longer really needs an introduction in view of its worldwide popularity, here is some interesting information about its activity. Adidas is one of the largest designers, manufacturers and retailers of sporting goods and equipment worldwide. But its activity is divided into different distinct sectors.
First, there are shoes, then clothing, and finally a small percentage of sports equipment.
Adidas' turnover is mainly achieved in Europe and North America.
Knowing Adidas' shares competition:
The German group Adidas is undoubtedly one of the leading names in the sports shoe sector and competes with few serious competitors internationally. However, given the diversity of its activities, it still has to deal with a few companies that are trying to steal market share from Adidas. That's why it's necessary to learn as much as possible about your competitors before starting to trade the Adidas action. This will allow you to verify the market positioning of Adidas and anticipate its future price movements due to the news and results of these companies. Here is the list of the main Adidas competitors in the world:
- Nike, the American giant : is close behind Adidas, particularly in the sports shoe sector.
- Bata: In footwear distribution.
- Puma: Derived from the split of the company from which Adidas originated.
- Fila: Remains one of the market leaders despite a loss of notoriety.
The strategic alliances set up by the Adidas group:
Adidas has also set up several strategic partnerships in the past few years which are detailed below.
- Samsung: The Adidas group recently formed a joint venture with Samsung in order to develop the Micoach app, a workout and coaching system with personalized training plans aimed at competing with Nike +.
- Nike: To remedy the shortage of shirts for the French team, Nike, the official supplier of "les Bleus", decided to partner with Adidas in 2014.
- Wanda: German sports equipment giant Adidas entered into an agreement with Wanda, the conglomerate controlled by Wang Jianlin, the richest man in China, to sponsor sporting events, promote football and basketball and open stores in Wanda shopping centres.
Introduction and stock price of Adidas shares:
The Adidas share is now listed on the German Xetra market and is naturally included the calculation of the DAX 30 index.
Stock market data
The historical technical analysis of the Adidas stock price and the detailed activities of the company are essential elements in understanding how to trade this share and can be useful for the implementation of an effective strategy. But it is also important to know the Adidas share positioning on the stock market in general. To do so, here is some more generic but essential data that you need to know:
- In 2017, the total market capitalization of the Adidas Company reached 39,842.65 MEUR.
- The number of securities issued by the Adidas Company and still in circulation on the market is around 201,489,000.
- The Adidas share price is currently listed on the Prime Standard market of Deutsche Boerse AG in Germany.
- Adidas is also part of the German national stock market index DAX 30.
- Adidas shareholders include 87% of institutional investors, 8% of investors other than individual investors, 4% of treasury shares and 1% of shares held by managers and directors.
All of this data is liable to change over time and so must be verified.
Adidas' founder Adolf Dassler started making sports shoes in the 1920s. Together with his brother, they founded the Schuhfabrik Gebrueder Dassler Company.
- In 1936, during the Berlin Olympics, the American Jesse Owens won four gold medals while wearing the brand's espadrilles.
- During the Second World War, the Dassler brothers were enlisted and left their company in the hands of their wives. This will particularly provide the Nazi army. Adolf then reported his brother as an SS to the allies. The company was liquidated and divided in two.
- Adidas AG was created in 1949 by Adolf, who used the first letters of his first and last name for the brand. His brother created the Puma brand.
- In 1973, Adolf's son created the Arena brand for swimming and then took over the group's French competitor, Le Coq Sportif.
- The company was sold to Bernard lurking in 1990 due to financial difficulties.
- In 1993, the company was sold again to Robert Louis Dreyfus.
- In 1995, Adidas went public on the stock exchange
- In 1997, Adidas bought the Salomon group before reselling it.
- In 2005, it bought Reebok and capitalized over 10 billion euros on the stock market, just after Nike.
- In 2017, Adidas sold the TaylorMade, Adam Golf and Ashworth brands for $ 425 million.
Benefits and drawbacks of Adidas shares as a stock market asset:
First of all, bear in mind that the Adidas brand is a very old brand which was launched in 1949 and very quickly encountered significant success. This long experience makes Adidas an emblematic brand, anchored in popular memory while remaining above all a young and dynamic brand.
The Adidas group can also count on the very diverse portfolio of products to boost its sales. Adidas offers a very wide range of sports footwear along with sports accessories which it markets both under the Adidas brand for the Premium range and under the Reebok brand for the mid-range.
Investors and shareholders who are interested in this share also appreciate the solid and stable financial situation of the company. Thanks to its network of over4,000 stores around the world and always very satisfactory annual results, Adidas can indeed pride itself of a financial position deemed excellent by analysts.
As pointed out above, the Adidas group also has a large network of stores in different countries of the world. But the group can also count on its online stores and numerous resellers to further increase its revenue. Overall, the group has succeeded in creating a complex but formidable distribution network to sell its products through different channels.
A large part of the Adidas group's marketing strategy is also based on sponsorship. The brand has always sought to sponsor famous people or prestigious sports organizations such as the NBA and is also very well represented at major world sporting events such as the Olympic Games. Thanks to this quality communication, Adidas manages to reach various consumers and strengthen its brand image with the general public.
Finally, as we saw above, Adidas also relies on multiple partnerships and alliances with other companies along with more specific areas such as sustainable development. As a result, the group approached the International Labor Organization which has given Adidas an undeniable advantage over its competitors by creating a sustainable company.
The disadvantages of Adidas stock as an asset:
First of all, bear in bear that the products sold under the Adidas brand remain relatively expensive. Adidas focuses on quality products using innovative technology above all. Because of this and also because of a relatively expensive production mode, the group is unable to position itself with part of the clientele or in certain specific markets such as emerging markets and developing countries.
The production of Adidas group footwear and sports accessories is also outsourced by over 93%. The group uses subcontractors mainly located in Asia in order to reduce its production costs and benefit from more available resources. But the decision to outsource the major part of its production also leads to a strong dependence of the group regarding the subcontractors. In addition, the quality of products manufactured abroad is currently suffering from the increasingly critical view of consumers in developed countries, which could harm the business in the long term.
Finally, although the Adidas group has a varied product portfolio, it only has two brands, Adidas and Reebok, which represents a limit to its offer and therefore to its sales, while some of its direct competitors have many more.