Reebok 2008 Annual Report Download - page 121

adidas Group Annual Report 2008 117
Corporate opportunities overview
External and industry opportunities
Favourable macroeconomic and fi scal developments
Sports participation on the rise
Increasing demand for functional apparel
Women’s segment offers long-term potential
Ongoing fusion of sport and lifestyle
Emerging markets as long-term growth drivers
Growing popularity of “green” products
Strategic and operational opportunities
Strong market positions worldwide
Multi-brand approach
Personalisation and customisation replacing mass wear
Breaking new ground in distribution
Taking control of distribution rights
Cost optimisation drives profi tability improvements
Financial opportunities
Favourable fi nancial market changes
External and Industry Opportunities
Favourable macroeconomic and fi scal policy changes
As a consumer goods company, consumer confi dence and
spending can impact our sales development. Therefore, better
than initially forecasted macroeconomic developments and
fi scal policy changes which support private consumption can
have a positive impact on our sales and profi tability. In addition,
legislative changes, e.g. with regard to the taxation of corpo-
rate profi ts, can positively impact Group profi tability.
Sports participation on the rise
Governments increasingly promote living an active lifestyle
to fi ght obesity and cardiovascular disease. According to the
World Health Organization, around 400 million people were
considered obese in 2005. Another 1.6 billion more were
estimated to be overweight. These numbers are projected
to increase to 700 million and 2.3 billion respectively by
2015. Once considered a problem only in affl uent nations,
obesity is also becoming an issue in countries with low per
capita income. This development has serious health conse-
quences and a dramatic effect on health care expenditures.
As a result, governments and non-governmental organisa-
tions are increasing their efforts to promote a healthy lifestyle
and encourage sports participation. Given our strong market
position, in particular in categories considered suitable for
weight loss such as training, running and swimming, we expect
to benefi t from this trend.
Increasing consumer demand for functional apparel
Consumer demand for functional apparel has increased sig-
nifi cantly in recent years as consumers realise the benefi ts of
functional apparel over traditional cotton sportswear. Improved
moisture management, superior ease of motion and increased
comfort are all factors encouraging consumers to switch to
high-performance gear. The design and development of func-
tional apparel requires signifi cantly more expertise, product
and material research as well as production know-how com-
pared to low-tech apparel. Therefore, only a few companies are
able to supply high-end functional apparel. Our resources and
our positioning as a sports performance leader enable us to
constantly develop innovative products and capitalise on them.
Women’s segment offers long-term potential
In our opinion, the women’s sports market is one of the most
attractive segments in the sporting goods industry with women
accounting for more than a third of total spending on athletic
footwear. The adidas Group has developed its Women’s catego-
ries over the past years. Product offerings in both performance
and lifestyle emphasise individuality, authenticity and style,
in all three brand segments. Examples are adidas by Stella
McCartney, the Avon Pink Ribbon collection at Reebok, and the
Women’s r7® CGB MAX at TaylorMade. Our Group still gener-
ates the majority of its revenues in men’s and unisex catego-
ries. The women’s category offers potential for further growth,
with shape, colours and sports specifi c to women. In 2009, we
will continue to expand our women’s offer with, for example,
the launch of a Reebok collection in partnership with Cirque du
Soleil see Reebok Strategy, p. 052.