Reebok 2007 Annual Report Download - page 52

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ANNUAL REPORT 2007 --- adidas Group GROUP MANAGEMENT REPORT – OUR GROUP -- Structure and Strategy - adidas Strategy
SPORT PERFORMANCE – BASKETBALL: LEVERAGING THE
NBA PARTNERSHIP adidas is the number two brand in terms
of basketball category sales worldwide with a strong presence
outside of North America. Increasing its footprint in basketball
therefore represents another key component of the adidas
brand strategy. In particular, basketball is a key category to
drive growth in North America. adidas intends to strengthen its
position in the category by emphasizing the brand’s unique
positioning – with a clear focus on individual and team per-
formance.
In this context, the brand’s long-term partnership with the
NBA is a critical asset. This agreement includes exclusive
licensing rights to all NBA on-court and warm-up apparel as
well as NBA-branded footwear for all teams. It also ensures
adidas’ visibility at all 2,460 NBA games and allows the brand
to effectively promote and harness its outstanding roster of
individual players such as Kevin Garnett, Dwight Howard, Tim
Duncan, Chauncey Billups, Tracy McGrady and Gilbert Arenas.
 see adidas Products and Campaigns, p. 129 Over 20 % of all NBA players
today wear adidas footwear.
Due to the NBA’s increasing visibility and popularity around the
globe, the partnership represents an important vehicle to drive
the adidas basketball business in Asia and Europe. The portion
of adidas basketball sales generated outside of North America
is growing rapidly. As a result, the brand’s overall basketball
business is expected to be split evenly between North America
and international markets by 2010.
SPORT PERFORMANCE – TRAINING: EXPANDING THE MEN’S
AND WOMEN’S APPAREL BUSINESSES Training is the
industry’s largest apparel category. At adidas, training is the
single biggest sports category for both men and women – and
one of the adidas brand’s key strengths. Moreover, adidas is
the global leader in training apparel and strives to extend
this leadership position going forward.
In the men’s segment, adidas’ cross-category performance-
driven compression apparel concept TECHFIT™  see adidas
Products and Campaigns, p. 129 represents a key image and commercial
driver. The brand expects to expand the TECHFIT™ business in
2008 on the back of strong communication and sports market-
ing support. In addition, adidas will work closely with key
retailers and support them with a quick replenishment and
“never-out-of-stock” program.
adidas has identifi ed women’s training as one of its most
important growth opportunities.  see Risk and Opportunity Report, p. 104
Therefore, adidas intends to further grow the business with
extended product offerings in the high-end adilibria, the dance-
inspired Fuse and the gym-focused Clima 365™ collections.
In addition, to support these product concepts, adidas will run
a global communication campaign centered around yoga.
The brand will also continue to carefully extend the product
offering and distribution of its acclaimed adidas by Stella
McCartney range.
SPORT STYLE: CAPITALIZING ON BRAND AUTHENTICITY AND
HERITAGE The market for streetwear and lifestyle fashion
represents a unique opportunity for sporting goods companies
as it is more fragmented and larger in size than the market for
products used in sports activity. In addition, profi tability in the
sports lifestyle market is typically higher as a result of lower
R & D expenses. Further, the sports lifestyle market is growing
faster than the market for actual sports products.
adidas is a brand with an authentic sports lifestyle offering
based on its unique sport heritage. This distinction offers
adidas a clear advantage when competing with the numerous
fashion brands which are attempting to enter this market. To
best tap the potential of the sports lifestyle market, adidas
created a dedicated Sport Style division primarily focused on
its Originals and fashion (e. g. Y-3, Porsche Design) businesses.
In 2008, adidas plans to further strengthen its lifestyle proposi-
tion with the addition of a separate lifestyle fashion program
targeting more commercial price points. The Sport Style
division is expected to account for up to 30 % of adidas brand
sales in the medium to long term.
SPORT STYLE: EXPANDING ADIDAS ORIGINALS The adidas
Originals business is the cornerstone of the Sport Style division.
Brand communication and attitude of adidas Originals are built
on the message “Celebrate Originality”.  see adidas Products and
Campaigns, p. 129 All product and marketing initiatives at adidas
Originals focus on authenticity, creativity and individuality.
Since its introduction, adidas Originals has been positioned
as a niche business with corresponding product, marketing
and distribution strategies. Going forward, however, adidas
Originals will widen distribution and extend its product offering
and com munication efforts. In this way, adidas Originals plans
to fully capitalize on the strength and brand equity of adidas.
To best meet the needs of a wide consumer base, adidas
Originals addresses three consumer segments:
- The Metropolitan consumer looks to sport, street and fashion
references as a basis for self-expression. In this consumer
segment, adidas will build on key trends such as driving-inspired
and low-profi le footwear (e. g. Sleek for women). Furthermore,
adidas will launch its fi rst jeans collection as part of the
new product collaboration with Diesel in 2008. Moreover,
adidas will extend its product offering with the introduction
of new product concepts such as the environmentally-friendly
adidas Grün and the women-specifi c Handbags for Feet
collections.  see adidas Products and Campaigns, p. 129
- The Urban segment presents a bold, urban look that takes
references from sport, street and particularly hip hop lifestyle.
In this consumer segment, authenticity and heritage are
critical. adidas was a pioneer in this segment with its connec-
tion to music artists Run DMC in the 1980s. Today, adidas
continues to resonate with urban consumers with the iconic
Superstar shoe or product ranges related to its partnerships
with Missy Elliott and the NBA (i. e. lifestyle basketball prod-
ucts).