adidas - Week 4: Adidas 1 Week 4 Strategic Management:...

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Week 4: Adidas 1 Week 4 Strategic Management: Adidas By: Elaine Massner Benedictine University
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Week 4: Adidas 2 The history of Adidas can be traced back to 1920, when German baker Adolph “Adi” Dassler began designing and producing footwear for athletes competing in soccer, tennis and track-and field events. In 1924, Adi Dassler’s brother, Rudolph “Rudi” Dassler joined him in the shoemaking venture to establish Gebruder Dassler Schuhfabrik (Dassler Brother Shoe Factory) in Herzogenaurach, Bavaria (Gamble, 2008). The Dassler Brothers made their first major innovation in athletic shoe design in 1925, when they integrated studs and spikes into the soles of track-and-field shoes. The Dassler were also innovators in the marketing field by giving away their shoes to German athletes competing in the 1928 Olympic Games in Berlin. By 1937, the company was making 30 different styles of shoes for athletes in eleven sports. All of the company’s styles were distinguished from other brands by two stripes applied to each side of the shoe (Gamble, 2008). In 1948, the company was dissolved after Adi and Rudi Dassler entered into a bitter feud. Rudi Dassler moved to the other side of the small village to establish his own shoe company, Puma Schuhfabrik Rudolph Dassler while Adi renamed the company to Adidas which is a combination of his first and last name. Adi Dassler applied a third stripe to the sides of Adidas shoes and registered the three-stripe trademark in 1949. The feud continues between Puma and Adidas and has become the foundation of both organizations’ cultures while the two brothers were alive. They were highly competitive and both discouraged employees from fraternizing with cross-town rivals (Gamble, 2008).
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Week 4: Adidas 3 By 1960, Adidas was the favorite among athletic footwear brands with 75 percent of all track-and-field athletes competing in the Olympic Games in Rome wearing Adidas shoes. The company began producing soccer balls in 1963 and athletic apparel in 1967 which help the company to become the leading brand of consumer jogging shoe in the United States (Gamble, 2008). After Adi Dassler’s death in 1978, Adidas remained the worldwide leader in athletic footwear, however, Adidas was rapidly losing market share in the US to industry newcomer, Nike. Even though Nike was becoming the market leader in U.S. athletic footwear market, Adidas was able to retain its number one ranking among competitive athletes with 259 medal winners in the 1984 Olympic Summer Games in Los Angeles wearing Adidas products. By 1987, Nike was the undisputed leader in the U.S. athletic footwear market with more than $1 billion in annual sales (Gamble, 2008). Adidas’s performance went downward after the death of Adi’s son, Horst Dassler with no clear direction from the top and quality and innovation rapidly deteriorating, and as a result Adidas fell to a number eight ranking in the U.S. athletic footwear market in 1990 and held only 2 percent share of the market (Gamble, 2008). A group of investors led by Robert Louis-Dreyfus acquired Adidas and he
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adidas - Week 4: Adidas 1 Week 4 Strategic Management:...

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