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Business Study Project: Nike vs. Adidas

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원빈 이

on 9 July 2016

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Transcript of Business Study Project: Nike vs. Adidas

Which company is the LARGER company?
This topic was easily selected due to our love for sports. In the past, we have both worn Adidas and Nike apparel when competing in activities. Collectively, we believe that at least half of our wardrobe contains athletic gear, all being brand name materials. Previously we have had arguments with different teammates that consider a certain brand to be superior over the others. Having the competitive nature we do, we are now determined to discover the facts that support whether or not Nike or Adidas is a better sports brand.
Why Does It Interest Us?
To make scatter plot graphs, we used the program specifically designed to organize data called Fathom 2.
The question “What brand would you rather purchase between Nike and Adidas?” was asked to the students in British School of Beijing. Nike was the most popular brand to buy based on the results we gathered. The majority of the people may have picked Nike based on the quality, appearance or price of the products. Not to mention, the symbol or slogan, which are directly proportional to the preferred brand to purchase, may have had an effect on what they decided to choose.
68% of the sample sized population stated they prefer sportswear clothing over non-sportswear. Companies like Nike and Adidas are clearly doing something right if people are choosing to wear their clothing over many other brands. Don't forget though, there are several other sports brands other than Nike and Adidas that sell sportswear, making them fit in this percentile as well.
This graph compares the “Just Do It” Nike slogan, against the “Impossible is Nothing” slogan that Adidas have both been used for many years. Most grade levels seem to prefer the Nike slogan, with the exception of the grade nines having almost equal favoring. This could also mean that Nike has more effective, inspiring slogan. Nike was able to use VERBAL ORIENTED advertising skills to attract customers
HOWEVER...
In summation we discovered that in 75% of people we surveyed the slogan does not affect which brand they prefer. This tells us that the slogan of each brand should not be a main priority when Nike or Adidas are looking at ways to sell their merchandise.
It shows whether the Nike Swoosh logo or the Adidas triangle logo is preferred by the students. As you can see, it is apparent that the Nike swoosh dominates the Adidas symbol in every age group. Nike's VISUAL ORIENTED marketing skills allured customers
Nike Correlation Graphs
Pieces of Clothing & Money Spent
Adidas Correlation Graphs
Pieces of Clothing & Money Spent
How Accurate Is Our Information
Gathered From Our Surveys?
We attempted to use simple random sampling but, one person’s chance may have affected another student’s chance of being selected. In our survey, we wanted have a somewhat equal representation of males and females from each grade. Depending on their grade and gender, they may have had a slimmer or greater chance of being asked to complete the survey.
We chose to only analyze data from British school of Beijing students in regards to our survey. Yet, we know that the population also includes adults, elderly, children and babies.
These preferences were not taken into consideration and may have skewed our data from a realistic number or favour.
Sampling bias was present in our surveys because we were not truly able to reflect the characteristics of the entire population. Not only did we limit our survey to high school students, but specifically, only individuals from BSB.
We have only surveyed 15~25 students in a grade * Some grade 11 and 12 students are surveyed from ISB, DCB and KISB *
LEADING...
QUESTIONS...
The category of $300+ could include all values above and including $300.
And who could forget... Participants from the survey may have deliberately given false or misleading answers that could affect our data collection.
By: Wonbin LEE and Herman Palmgren
Often times, buyers will choose a product that is less costly if they believe it is of the same quality. This could cause some of our data to be skewed. Surprisingly, Nike was less expensive to buy rather than Adidas. This came as a shock to us. We had always believed that Nike was more costly than other brands. Adidas was always thought to be cheaper to attract more customers to their brand. Yet, in most instances, Adidas had the more expensive merchandise.
Over time Nike had widened the gap between the two companies annual revenue only to see Adidas make a large income in 2010. Soon after, Nike began to open the gap again in 2011. It should be noted that Nike has always had at least a $3 billion advantage in revenue each year.
What conclusions did we make?
* Nike is the more successful and preferred company over Adidas.
* After analyzing our survey data, it was apparent that Nike was the favoured company.
* Nike had stronger correlations between the pieces of clothing one owned and how much money they spent.
* Nike apparel is less expensive that Adidas apparel.
* Nike constantly has higher revenue.
Comparing the size of companies
Supplies (Factories etc.)
Profits
Number of employees
Extent of activities
Sales - Value of output
Capital
Number of awards
Sponsorships
Customer Preference
NIKE SUPPLIES
NIKE VS. ADIDAS
ADIDAS SUPPLIES
NIKE VS. ADIDAS
Profits of the company
There are some advantages and disadvantages of comparing the size of business with profits.

The advantages of comparing size of businesses with profits are that it is very effective to measure the efficiency when compared with sales or capital employed, or the ability of managers.

The disadvantages of comparing size of businesses with profits are that it is not accurate because it largely depends on the managing and the supplies, capitals and resources that backs it up.



Profits of Nike Company
Profits of Adidas company
Supplies of the company
The disadvantage of comparing size of the companies is that it can
not properly measure the efficiency of the work, the areas that
companies should improve to achieve high standard and
general profits.
The advantage of comparing size of the companies is that it allows people to know how active or enthusiastic companies are towards their business.
6 types of suppliers
Main suppliers
Subcontractors
Agents
Material providers
Licenses
Service Providers
<Factories>
Factories
2011
2012
2013
Licenses
Umbro
Converse
Nike Golf
Jordan
Huxley X
Service Providers
2011- 452 Retailer Stores
2012- 621 Retailer Stores
2013- 738 Retailer Stores
2012- 1112 Factories
2013- 1100 Factories
2011- 1052 Factories
Factories
Licenses
Reebok
Taylor Made
Service Providers
2011- 452 Retailer Stores
2012- 593 Retailer Stores

2013- 627 Retailer Stores

Fourth quarter revenues up 12 percent to $6.5 billion, up 14 percent excluding currency changes
Fourth quarter diluted earnings per share down 6 percent to $1.17
Fiscal 2012 revenues of $24.1 billion, up 16 percent, up 14 percent excluding currency changes
Fiscal year diluted earnings per share up 8 percent to $4.73
NIKE Brand futures orders up 7 percent, up 12 percent excluding currency changes
Inventories as of May 31, 2012 were up 23 percent versus the prior year
Fourth quarter revenues up 14 percent to $5.8 billion; up 11 percent excluding currency changes
Fourth quarter diluted earnings per share up 17 percent to $1.24
Fiscal 2011 revenues of $20.9 billion, up 10 percent on both reported and currency neutral basis
Fiscal year diluted earnings per share up 14 percent to $4.39
NIKE Brand futures orders up 15 percent; up 12 percent excluding currency changes
Inventories as of May 31, 2011 were up 33 percent versus the prior year
Fourth quarter revenues from continuing operations up 7 percent to $6.7 billion, up 9 percent excluding currency changes
Fourth quarter diluted earnings per share from continuing operations up 27 percent to $0.76
Fiscal 2013 revenues from continuing operations up 8 percent to $25.3 billion, up 11 percent excluding currency changes
Fiscal 2013 diluted earnings per share from continuing operations up 11 percent to $2.69
NIKE Brand futures orders up 8 percent
Inventories as of May 31, 2013 up 7 percent
2011- $20.9 Billion
2012- $24.1 Billion
2013- $25.3 Billion (Expected)
2011- $18.1 Billion
2012- $20 Billion
2013(Expected)- 5.07 Billion x 4 = 20.28 Billion
NIKE vs. ADIDAS
Number of employees
The advantage of comparing the size of business by number of employees is that it is very effective for understanding the general size.


The disadvantage of comparing business size by number of employees
is that it cannot give a precise comparison of specific company with
other companies or competitors because some industries have very
high output due the the automated factories which use the latest
computer controlled equipment
Number of employees

-NIKE-
2011 - 46824
2012 - 46306
2013 - 44000
Number of employees
-ADIDAS-
2013- 48000~48900
2012- 46306
2011- 42341
NIKE VS. ADIDAS
Extent of activities
The advantage of comparing business size with the extent of
the activities is that it allows us to assume the general size
of the company, and the speed of production.

The disadvantage of comparing business size with the extent of
the activities is that is cannot tell the efficiency of the company
and the profits they earn.

Extent of activities
-NIKE-
Extent of activities
-ADIDAS-
NIKE VS. ADIDAS
Sales - Value of Output
Sales are directly connected to the value of output, which is the
value of the product. Because consumers tend to buy products
with good values, values of the output affects a lot to the sales
rate of the company
The advantage of comparing business size by the sales - value of output is that it is very effective when comparing the size of business because it
is the most common way of comparing businesses in the same industry,
which also can represent which company is the most important
company in that industry. Because consumers want good quality
product, and the aim for each industry is to sell lots of product, the
amount of sales are a great forecast that indicates the size of business
However, the disadvantage is that high output or sales level does not mean that a business is large when using the other
methods of measurement. This means that sales only give
a brief indication to the general size of companies in
different industries
NIKE VS. ADIDAS
Capital
The advantage of comparing business size by capital is that it can indicate the potential of
the business and the effectiveness of the
business.
The disadvantage of comparing business size by capital is
that it is not always accurate when comparing because
some companies employ high labor-intensive methods of
production that gives low output levels and use little
capital equipment.
Capital
-NIKE-

Sales - Value of Output
Adidas's profits are presented in Euros(€) It has been converted to dollars ($), in order to compare the profits with Nike's profits.
Therefore, the price of the currencies can be slightly different.
- NIKE -
2011 = $18.81 Billion
2011 = $17.16 Billion
2012 = $ 18.98 Billion
2013 = No results
Expected = $ 19 Billion
Sales - Value of output
-
Adidas
-
2012 = $19.6 Billion
2013 = $22.8 Billion
NIKE VS. ADIDAS
Number of awards
The advantage of comparing business size with the number of awards is that it tells us the section companies good at, and its general standard of the technologies and its competitiveness within that realm of business.
The disadvantage of comparing business size with the number of awards is that it cannot tell the size of the business, because companies with many awards can be very small. Moreover it is hard to tell the efficiency of the company works.
Number of awards
- NIKE -
12 AWARDS
Number of awards
- ADIDAS -
2011~2013
8 AWARDS
2011~2013
NIKE VS. ADIDAS
Personal Preference
Because the main objective of the company is to SELL THE PRODUCT, customers are very important in businesses. As these two companies are very famous brands and are competitive, we have made some graphs to show what brand is preferred by people, and the reason for it.
The advantage of comparing business size by customer preference is that it allows to predict which company will have more sales rate, which is directly connected to the business size
The disadvantage of comparing business size by customer preference is that is does not allow to compare businesses accurately. Moreover, the rate varies depends on persons daily condition, thus the results are very CAPRICIOUS.
NIKE VS. ADIDAS
Our Way of Calculating Marks
Because there are lots of criteria to evaluate and compare, we have made a system that, we will give a tick to the bigger company in that sector of business
This mark is same as 1 point, and the company that had the most point at the end will be the bigger company
Decreasing..
What it shows is that Nike is using Capital Employment, where company uses machines with small number of employees to produce more output and sales, with better quality
=
Efficiency increasing~
NIKE
Clothings
Footwear
Sports Goods
Bags
Trainers
Slippers
Balls (football,
baseball etc.)
Shirts
Pants
Sports Wear
Rackets
Shoes (football
Shoes, Basketball
Shoes etc.)
ETC.
Pants
Sports Wear
Shirts
Trainers
Slippers
Shoes (football
Shoes, Basketball
Shoes etc.)
Balls (football,
baseball etc.)
Rackets
ETC.
Thank you for watching
NIKE VS. ADIDAS
Sponsorships
Sponsorships are great way to make company famous. By putting logo on a famous person's clothes, the sales rate increases significantly.
The advantage of comparing business size by sponsorships is that it allows to know the quality of the products made by the company, and reflects the customer preference toward that company's product
The disadvantage of comparing business size by sponsorships is that it does not tell accurate information of the size of the company, because some company's might have high marketing cost while others are not.
Sponsorships
- NIKE -

Cristiano Ronaldo
Tiger Woods
Manchester United
Rafael Nadal
Nike sponsored 250 teams, nations and players
Increasing employees
Overall Conclusion
NIKE VS. ADIDAS
The result clearly shows that Nike is bigger than adidas in its size. They have more sales and profit rate while they had small amount of supplies and
number of employees . This means that nike has Efficiency of using products and reveals that they have used adequate source of labour. In contrast, Adidas failed to use their resources properly. Moreover, Nike had more 'Inspiring' theme of marketing the business, which led to good consumer evaluation and more sales, and profits rate. To sum up, nike is the biggest company in the sector of sports goods.
NIKE > ADIDAS
Sponsorships
- ADIDAS -
Lionel Messi
Real Madrid CF
Andy Murray
Gareth Bale
Providing 700 Sponsorships
Sources are from:
NIKE VS. ADIDAS
www.store.nike.com
www.adidas.com
www.adidas-group.com
www.nikeinc.com
www.wikipedia.com
www.naver.com
www.nikegroup.co.uk
www.ycharts.com
www.stasticbrain.com
www.thetimes100.co.uk
What is NIKE?
Nike is a sports related brand that produces sportswear and sports related goods.
It was established in 1972, with the name of 'Blue Ribbon Sports' by Bill Bowerman and Philip Knight. It changed its name in 1978 to Nike.
It is a world famous brand and is known as the best sports brand.
The symbols are:
The slogan for Nike is
'Just do it'
What is Adidas?
Adidas is a German sports related brand that produces sportswear and sports related goods.
Adidas was established in 18th August 1948 by Adolf Dassler. The name Adidas came from Adi(short version of Adolf) + Das(sler).
The symbol of Adidas:
The slogan is
'Impossible is nothing'
NIKE VS. ADIDAS
Adidas has more supplies which means that they are more enthusiastic towards their business. However, there efficiency is questionable
The efficiency of Nike company is very high, because they produce more profits with less supplies. It can be also interpreted as Nike know who is adequate in certain places
Adidas is generally bigger in its size, because it has more employees and supplies. However, it has lower profits and sales rate, which means that it is not efficient. These problems are caused by using unsuitable technologies for the factory production, or the workers not having motivation to work.
Nike has more sales rate which means that Nike is the most important company within that industry. This can also mean that the quality of the goods are good, and the price is adequate. However, its just a brief indication
No information for capital of Nike and Adidas
Full transcript