Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Comparative analysis of adidas and nike
Comparative analysis of adidas and nike
Industry analysis under armour
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Comparative analysis of adidas and nike
Under Armour has performed relatively well in the past 3 years; while they are the number two American athletic apparel provider, they have had their share of both successful and unsuccessful quarters. Looking at Under Armour’s financial statements, you’ll notice the gradual increase in annual gross profit during the past three years; However, in the last eight quarters, there has been a steady decline. For the 4th quarter of 2016, Under Armour generated a gross profit of $698,624,000, whereas, in the 1st quarter of 2017 profits fell to $583,704,000. While a drop of over $100 million is alarming, it’s important to note that a significant portion of their profits - basketball sneakers and football cleats, are generally purchased during the fall …show more content…
Over the past three years, Nike has had constant growth in annual gross profit. Their profits grew from $14,067,000,000 to $14,971,000,000 to $15,312,000,000 from 2014-2017. Similarly, Adidas too experienced constant growth in their gross profit over those years. As shown in figure 1 (refer to appendix), Under Armour is trailing their two industry competitors. All three experienced growth in profits over the last three years, however, Under Armour’s gross profit grew 48.2% during this three-year stretch, while Nike and Adidas grew 8.9% and 35.5% respectively. Although, Under Armour’s profit is significantly lower than its competitors, it is important to note that Under Armour competes against mature companies. Similar to gross profit, Under Armour’s revenue over the past three years is significantly lower than their competitors (refer to figure 2 in appendix). While Under Armour’s growth has fluctuated, both Nike and Adidas will no longer have significant …show more content…
The first is “Power in Pink”, which uses pink materials and decorative designs on both men and female apparel to raise awareness about breast health. This program inspired the creation of “Under Armour Breast Health innovation Center” at J. Hopkins hospital as it raised over $10 million dollars (Under Armor, 2015d). The second is “UA Win”, which looks to empower athletes of the next generation by aiding impoverished children with sports accessibility. The company achieves this goal by training coaches, who in turn help children succeed in their sporting fields. (Under Armour, 2015f). The final initiative is “UA Freedom,” which provides veterans and first responders discounts of 10% on all products from the company, and to its partners with the “Wounded Warrior Project.” (Under Armour,
Under Armour provides innovatively designed performance products that incorporated a variety of technologically advanced fabrics and specialized manufacturing techniques, all in attempt to make the wearer feel “drier, lighter, and more comfortable.” This is Under Armour’s core competitive strength.
They could overtake Adidas if they continue with their innovative strategy because they’re only $3.5 billion away. Since now-a-days consumers are all about technology and new innovative products, if Under Armour continues with their innovative strategy they will continue to see an increase of financial growth, become a major competitor for Adidas, and a closer competitor to Nike.
SHORT CASE SUMMARY Nike, Inc. (503-671-6453, www.nike.com) is the worlds #1 athletic shoe and apparel seller. Nike currently employs 20,700 employees, with total sales of $8.78 billion. Nike and the athletic shoe industry have evolved into one of the most competitive market in recent years. But, analysts believe that athletic shoe sales will slow down over the next few years. The slowdown will come with the change in consumer trends. For instance, the younger market is beginning to buy more casual shoes and work boots. Another reason for the slowdown is that people are buying more medium priced athletic shoes and not going for the high price brand name shoes. As a result, this is bringing Nike a lot more competition to surpass. In order for Nike to remain on top of the athletic shoe industry they must establish an exceptional global strategy. If Nike penetrates the global market successfully than this will give the company an overall competitive advantage. Nike doesn't only sell athletic shoes, but a wide variety of sporting goods and clothing. They also design, develop, and market high quality active sports apparel, equipment, and accessory products. Their huge lines of products are designed for just about every sport in existence. Their products are made for men, women, and children of all ages. Nike has 20,000 retail accounts throughout the U. S. using independent distributors and also has contracts with 110 other countries. The company also has agreements with Internet companies and subsidiaries. Nike, Inc. has many retail outlets around the world, including their famous outlet "NIKETOWN" located in major cities. "NIKETOWN" gives customers the experience to become more educated on the company's goals and objectives for their products. The store educates its customer while at same time entertaining them too. This store gives customers a chance to become more brand loyal to Nike, Inc. Over the years Nike has gained an enormous amount of consumer awareness that they have eliminated the company name from all other products. The "swoosh" logo is automatically associated with the company name by just about anyone in the world. The meaning for Nike has lived up to the company's expectations. Nike means "the goddess of victory," which is exactly what the company has had since its creation. HISTORY A competitive runner, Ph...
During a trip to Japan, they found a great athletic shoe with a new design
Only a week earlier, on June 28, 2001, Nike had held an analysts' meeting to disclose its fiscal-year 2001 results.1 The meeting, however, had another purpose: Nike management wanted to communicate a strategy for revitalizing the company. Since 1997, its revenues had plateaued at around $9 billion, while net income had fallen from almost $800 million to $580 million (see Exhibit 1). Nike's market share in U.S. athletic shoes had fallen from 48%, in 1997, to 42% in 2000.2 In addition, recent supply-chain issues and the adverse effect of a strong dollar had negatively affected revenue.
Under Amour Company ventured into a market segment that was overcrowded, it had thousands of companies that competed against each other. Out of the many companies involved in the trade, the two most formidable threats seemed to be orchestrated by Nike and Adidas. These are two giant sports apparel and footwear, which pride themselves as having been long term veterans in the industry. Nike in particular was christened as the ultimate shoe and athletic apparel company with revenues of $18.6 billion, net income of $1.9 billion and more than thirty two thousand employees globally in the year 2008. This makes it the largest athletic shoe and apparel seller in the world. This company has seen major expansions in outlets throughout the world over the years. Adidas on its part has managed to build a powerful brand through its technological innovations and aggressive marketing where they spend up to thirteen per cent of their revenue besides offering high quality services. These scenarios seem to present Under Armour with a massive competitive disadvantage.
The sports apparel and accessories industry has a highly competitive market. Businesses are constantly competing for elite athletes to sponsor, raw materials, and every opportunity to expand. Under Armour is able to not only survive but thrive in this market because of their ability to think outside of the box. They are constantly creating new and exciting products that help athletes everywhere.
Nike’s goal is to remain unique and different from others in terms of the items offered on the market. Arguably, Nike belongs to a monopolistically competitive market as there only a few organizations with the ability to regulate the amount charged for their product which means they cannot make their prices high as this is likely to make customers move on to other available choices (Nike, Inc., 2012). However, Nike can find a balance between the prices to charge for their products and remaining competitive with other companies in the industry. Nike has formed a distinction between the appearance and performance of their footwear and that of their competitors. Although products are differentiated from other companies, they still influence each other because they are items of the same
Nike’s Asian operations had previously continued to soar generating US$300 million in 1994 in revenues to a whopping US$1.2 billion in 1997. However based on the Asian economic crisis, this had adversely affected revenues, while regional layoffs were inevitable. Nike also performed well in the European market generating about US$2 billion in sales and a good growth momentum was expected, however, some parts of Europe were only slowly recovering from an economic downturn. In the Americas (Canada and the U.S.A.), Nike experienced a growth rate for several quarters. The U.S. alone generated approximately US$5 billion in sales. The Latin American market at this point was exposed to economic volatility; however Nike still saw them as a market with “great potential for the future”.
Nike American Sportswear generated revenue of 7495 million US dollars in 2014, which was almost double of 2009 revenue of Nike Sportswear (Statista, 2015).The sales of (Athletic) Sportswear of Nike 90 million US dollars, however, the sale of Adidas Sportswear (Competitor of Nike) was 25 million US dollars, which was not even one third of Nike Sportswear sales (Statista, 2015).Nonetheless, the return on assets and equity are 13.41% and 26.43% respectively (Yahoo Finanace, 2015).
shoe industry has is getting its stock value to rise again because all but Nike
In order to boost revenue, management decided to develop more athletic-shoe products in the midpriced segment, which are sold for $70-$90 a pair. As for the cost side to be considered, Nike planned to put more effort into expense control. The company executives forecasted long-term revenue growth targets of 8% to 10% and earnings growth targets of above 15%. In order to make an investment decision regarding the mutual fund she managed, Ford decided to develop her own discounted cash flow forecast. Since Ford was not sure whether to buy the stock, she asked Cohen to estimate
Under Armour has always set aggressive targets for themselves and they should not change that now. The leadership team believes that “a 3% share of the (athletic footwear) market would nearly double UA’s total revenue” (Wheelen, Hunger, Hoffman, & Bamford, 2015, 2012, 2010), and this should be another one of the metrics that Under Armour monitors and grows.
Nike’s positioning in the market has more of a mass appeal compared to their main competitor Adidas who strive to make products for elite athletes. The positioning strategy for Nike is currently working at a satisfactory level as Nikes global annual sales between 2013-2014 was reported as 27.8 billion (Statista, 2014) compared to Adidas’ 19.95 billion (Statista, 2014). The global market for sports apparel is expected to grow at a compound annual growth rate of 4% between 2012-2019, Nikes compound annual growth rate during 2010-2012 was 12.3% which is an excellent result as the brand’s growth was larger than the market as well as outgrowing Nike’s closest competitors Adidas, Puma and Asics (Forbes,
With their 1998 acquisition of Salomon, the company became adidas-Salomon, and the number 2 sporting goods company in the world. Although there were good strategic fits between adidas' and Salomon's core competencies, its obvious that the divisions failed to uncover these synergies. The future performance of Salomon have lagged behind expectations and It failed to provide much anticipated growth. Even more so, it dragged down the growth rates for adidas-Salomon overall.