Reebok 2006 Annual Report Download - page 106

Group Management Report ›
Opportunities Report
As a leader in the sporting goods industry, our Group
is exposed to a global marketplace, offering significant
growth and profitability potential for all our brands.
Identifying, assessing and exploiting opportunities in a
structured and organized way is fundamental to achiev-
ing our medium- and long-term revenue and profitability
goals. In addition to seizing opportunities evolving from
macroeconomic and industry developments, we continu-
ously strive to deliver strategic initiatives at a Group and
brand level in order to capture future growth and profit-
ability.
Opportunities Management Principles and Process
All facets of our organization are involved as we continuously
seek to maximize the top line and optimize our cost structure.
Centralized Group and brand functions such as planning,
marketing, finance, treasury, global operations, and merg-
ers and acquisitions, are responsible for anticipating global
macroeconomic, industry and long-term strategic options.
Brand teams at both global and regional levels are focused
on identifying consumer trends and monitoring developments
in the respective markets. Strategic business plans provide
the overall direction towards the realization and execution
of opportunities. Our opportunities management process is
composed of the following steps:
» Opportunity identification: Situation analysis is the most
important process we apply in identifying and quantifying
opportunities. We conduct our own qualitative research with
respect to macroeconomic and consumer trends, but also
consult secondary material and liaise with independent trend
and media agencies. In addition, we analyze market data to
see which markets, categories, consumer target groups and
product styles show potential for future growth. We actively
monitor brand, distribution channel and price point develop-
ments. Our primary focus is on sport, but increasingly we also
look at adjacent market segments such as leisure lifestyle
and sport fusion.
» Opportunity assessment: Identified opportunities undergo
a rigorous evaluation, to ascertain viability, commerciality,
contribution and risk. This approach is applied to both longer-
term strategic prospects but also shorter-term tactical and
opportunistic initiatives at both a Group and brand level. Each
opportunity that we choose to pursue must adhere to the core
values of the Group and respective brand, and provide a sig-
nificant direct or indirect revenue and profitability contribu-
tion while meeting stringent cost and investment criteria.
» Opportunity monitoring and controlling: Measuring the
success of our initiatives is a crucial aspect of the opportu-
nity management process. The objectives and key perfor-
mance indicators set during the identification and evaluation
process are monitored on an ongoing basis. This not only
facilitates the validation of opportunities but also allows us to
adapt and refine our products, communication and distribu-
tion strategy to ongoing developments in our fast-moving and
rapidly changing marketplace. We are also placing increased
emphasis on engaging with our manufacturing partners and
retail customers to evaluate the impact of our growth and
cost initiatives. During the monitoring and controlling pro-
cess, information is relayed in a timely manner to product,
marketing and controlling functions. Management is continu-
ously updated as part of the Strategic Business Plan process,
and through regular and ad hoc discussions as appropriate.
› Opportunities Report
102 ANNUAL REPORT 2006 › adidas Group ›