PRODUCTION AND FINANCIAL ANALYSIS OFADIDAS

An industrial exposure Project

Submitted in the partial fulfillment of the requirement for the award of the
Degree of Bachelor of Business Administration
2007-2010

Submitted By: Under the Guidance of:

ANCHAL KHULLAR Dr. S.CHATTERJEE

BHARATI VIDYAPEETH UNIVERSITY

INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI
An ISO 9001:2000 Certified Institute
“A” Grade Accreditation by NAAC
 Declaration

This is to certify that I have completed a Project titled

"PRODUCTION AND FINANCIAL ANALYSIS OF

ADIDAS” under the guidance of Dr. S.Chatterjee in the partial

fulfillment of the requirement for the award of Bachelors of

Business Administration of BharatiVidyapeeth University,

Pune. This is an original piece of work & I have not submitted

it earlier elsewhere.

ANCHAL KHULLAR
 Certificate from the company/organization
(In Company Letter head)

This is to certify that ANCHAL KHULLAR son/daughter of

ANIL KHULLAR pursuing BBA from BharatiVidyapeeth
University Institute of Management & Research, New Delhi
has successfully completed Summer Training Project in our
organization on the topic titled, “ADIDAS” from 2007 to 2010
During his/ her project tenure in the organization/ company,
we found him/ her hard working, sincere and diligent person
and his/ her behaviors & conduct was very good during the
project.

We wish him/her success for his/ her future Endeavour's.

Signature of the issuing authority

Name of the issuing authority
Designation of the issuing authority
 Student Undertaking
(On plain paper)

This is to certify that I have completed the Summer Project

titled ADIDAS under the guidance of Dr. S.CHATTERJEE in
the partial fulfillment of the requirement for the award of
Bachelor of Business Administration of Bharati Vidyapeeth
University, Pune. This is an original piece of work & I have not
submitted it earlier elsewhere.

Name of the Student

ANCHAL KHULLAR
 Certificate
(In Institute’s letter head)

This is to certify that the summer project titled “ADIDAS” is

an academic work done by “ANCHAL KHULLAR” submitted
in the partial fulfillment of the requirement for the award of
the Degree of “Bachelor of Business Administration” from
“Bharati Vidyapeeth University, Pune” under my guidance &
direction. To the best of my knowledge and belief the data &
information presented by him/her in the project has not been
submitted earlier.

Name of the Faculty Guide

Dr. S.Chatterjee
 Certificate
(In Institute’s letter head)

This is to certify that the summer project titled “ADIDAS” is

an academic work done by “(name of the student)” submitted
in the partial fulfillment of the requirement for the award of
the Degree of “Bachelor of Business Administration” from
“Bharati Vidyapeeth University, Pune”.

Dr. Sachin. S. Vernekar

(Director)

Name of the student

ANCHAL KHULLAR
 Preface

IT is designed in such a way that student can grasp

maximum knowledge and can get practical exposure to the

corporate world in minimum possible time. Business schools of

today realize the importance of practical knowledge over the

theoretical base.

The research report is necessary as it provides an

opportunity to the researcher in understanding the industry

with special emphasis on the development of skills in analyzing

and interpreting practical problems through the application of

management theories and techniques. It is a new platform of

learning through practical experience.

 Acknowledgement

When we are trying hard to get down to preparing a project like project

on research methodology after a tiring day at college at this time we

need all the encouragement we can get. This encouragement is more

effective than other that are given at another situation. It is very

difficult to prepare a project almost when we are new for this

experience. Without any help or guide it is not easy to achieve given

target.

First and foremost, I express my deep sense of gratitude to

Dr. S. Chatterjee, His helping nature and his enthusiasm has been

source of constant inspiration...

I am also very thankful to all the faculty members, the whole

college staff for providing me with necessary facilities and support,

essential for bringing out this work in a short time.

Name of the student

ANCHAL KHULLAR
 SOURCES OF STUDY

JOURNALS
ADIDAS VERTICAL

OTHER WEBSITES

• http://en.wikipedia.org/wiki/Retail_industry#
• Retail industry

o http://en.wikipedia.org/wiki/ADIDAS

o adidas.com/us/tennis
 Contents

CHAPTER 1: INTRODUCTION

CHAPTER 2: INDUSTRY PROFILE

CHAPTER 3: COMPANY PROFILE

CHAPTER 4: RESEARCH METHODOLOGY

CHAPTER 5: DATA ANALYSIS AND INTERPRETATION

CHAPTER 6: CONCLUSIONS AND SUGGESTION

RETAILING IN VARIOUS FIELDS
CHAPTER-1 INTRODUCTION

RETAILING INDUSTRY

PROFILE

Retailing consists of the sale of goods or merchandise from a

fixed location, such as a department store or kiosk, or by post,
in small or individual lots for direct consumption by the
purchaser.[1] Retailing may include subordinated services, such
as delivery. Purchasers may be individuals or businesses. In
commerce, a retailer buys goods or products in large quantities
from manufacturers or importers, either directly or through a
wholesaler, and then sells smaller quantities to the end-user.
Retail establishments are often called shops or stores. Retailers
are at the end of the supply chain. Manufacturing marketers
see the process of retailing as a necessary part of their overall
distribution strategy.

Shops may be on residential streets, shopping streets with few

or no houses, or in a shopping center or mall. Shopping streets
may be for pedestrians only. Sometimes a shopping street has a
partial or full roof to protect customers from precipitation.
Online retailing, also referred to as B2C type of e-commerce,
and mail order are forms of non-shop retailing.

India retail industry is the largest industry in India, with an

employment of around 8% and contributing to over 10% of
the country's GDP. Retail industry in India is expected to rise
25% yearly being driven by strong income growth, changing
lifestyles, and favorable demographic patterns. India retail
industry is expanding itself most aggressively, as a result a
great demand for real estate is being created. Indian retailers
preferred means of expansion is to expand to other regions and
to increase the number of their outlets in a city. It is expected
that by 2010, India may have 600 new shopping centers.
 PRICING TECHNIQUE
The pricing technique used by most retailers is cost-plus
pricing. This involves adding a markup amount (or
percentage) to the retailers cost. Another common technique is
suggested retail pricing. This simply involves charging the
amount suggested by the manufacturer and usually printed on
the product by the manufacturer.

Often prices are fixed and displayed on signs or labels.

Alternatively, there can be price discrimination for a variety of
reasons, where the retailer charges higher prices to some
customers and lower prices to others. For example, a customer
may have to pay more if the seller determines that he or she is
willing to. The retailer may conclude this due to the customer's
wealth, carelessness, lack of knowledge, or eagerness to buy.
Another example is the practice of discounting for youths or
students.
 SALES TECHNIQUE
Behind the scenes at retail there is another factor at work.
Corporations and independent store owners alike are always
trying to get the edge on their competitors. One way to do this
is to hire a merchandising solutions company to design custom
store displays that will attract more customers in a certain
demographic. The nation's largest retailers spend millions
every year on in-store marketing programs that correspond to
season and promotional changes. As products change, so will a
retail landscape.

Retailers may use facing to create the look of a perfectly-

stocked store even when it is not.

A destination store is one that customers will initiate a trip

specifically to visit, sometimes over a large area. These stores
are often used to "anchor" a shopping mall or plaza,
generating foot traffic which is capitalized on by smaller
retailers.
 RETAILING
STRUCTURE

ADIDAS
 INDIA'S LEADING RETAIL STORE

CHAIRMAN: HERBERT HAINER

 ADIDAS PROFILE

WHAT DOES Adidas MEAN?

Adidas combination of ADI the first name of the founder, DAS
first three letters of his last name, Dazzler. The full name now
is Adidas-Salomon AG

Adidas is a German sports-clothing company. It’s also known

as ‘the brand with three stripes”. The company is named after
its founder, Adolph (Adie) Dazzler in 1920. Started producing
sport footwear Adidas (officially without capitals) now
produces footwear, bags, shirts and other sport and clothing
related items.

The company's clothing and shoe designs typically feature

three parallel bars, and the same motif is incorporated into
Adidas's current official logo. The company revenue for 2006
was listed at €10.084 billion, or about US $13.625 billion and
the 2007 figure was listed at €10.299 billion, or about $15.6
billion.

Adidas currently manufactures several running shoes,

including the Adidas Star Control 5, the Adidas Star Ride (the
replacement for the Adidas Star Cushion 6), the Supernova
Sequence (the replacement for the Supernova Control 10), and
the Supernova Cushion 7 (which will soon be replaced by the
Supernova Glide), among others. In addition, their
performance apparel is widely used by runners. Adidas also
uses kangaroo leather to make their more expensive shoes.

Speed is one of the selling points athletic shoe manufacturers

use to market their products: Buy their shoes and you'll run
faster. But speed is not just a factor in selling shoes; it has
become an essential in their manufacture as well.

At the Adidas Footwear Design Center in Portland, Oregon,

designers develop prototype shoe soles with various shapes and
tread patterns. The prototype begins with a 2D version, which
is often a simple sketch. The sketch is given to the design
center's CAD department, where a 3D model is developed. The
3D model may be divided into as many as six parts. Each part
is individually machined from Ran Shape, a synthetic wood
material, on a four-axis mill. The Ran Shape parts are then
vacuum cast to create flexible parts. The flexible parts are
assembled to form a single model that is put through a series of
durability tests.

Once a model passes these tests, it is returned to the designer

for approval. If it is approved, then the data from the
prototype are sent to a contracted, independent mold shop
where a 3D model is cut and a mold is cast from silicone. The
finalized sole is then molded and incorporated into the
manufacturing process of the shoe.
MANAGING IMPACT

Within the lifecycle of its products there are two points in the
design and development process where a significant difference
to the company's environmental footprint can be made. The
first is in improving the materials that go into the products,
and the second is in tackling pollution in factories.

Improving materials
The company’s approach is to seek to design out polluting
materials and processes and increasingly to adopt sustainable
materials instead. The Adidas Group has various initiatives in
place that help to achieve its goal of improving materials.

Tackling pollution
We have limited control over the direct environmental impacts
of the manufacturing process and how our suppliers act. The
best way we can influence the environmental impacts at our
suppliers’ factories is to encourage the introduction of
environmental management systems, and we have made
implementing an environmental management system
mandatory for all our core suppliers.
Restricted Substances Standards
The Group has a strict policy on controlling restricted
substances, which are those that cause harm, or are suspected
to cause harm, to human health or the environment. Our
policy is that suppliers must avoid using restricted substances
to ensure that our products are environmentally safe. Our
standards and policies on restricted substances are the ‘A-01
Requirements’.
 Vision and mission

• "Impossible is Nothing" is the current mainstream

marketing slogan for Adidas.

MISSION:
 "Adidas-Salomon strives to be the global leader in the
sporting goods industry with sports brands built on a
passion for sports and a sporting lifestyle.

We are consumer focused. That means we continuously

improve the quality, look, feel and image of our products
and our organizational structures to match and exceed
consumer expectations and to provide them with the highest
value.

We are innovation and design leaders who seek to help

athletes of all skill levels achieve peak performance with
every product we bring to the market.

We are a global organization that is socially and

environmentally responsible, creative and financially
rewarding for our employees and shareholders.

We are committed to continuously strengthening our brands

and products to improve our competitive position and
 financial performance.

In the medium term, we will extend our leading market

position in Europe, expand our share of the US footwear
market and be the fastest growing major sporting goods
supplier in Asia and Latin America. The resulting top-line
growth, together with strict cost control and working capital
improvements, will drive over-proportionate earnings
growth. ."
• WHAT IS ADIDAS' STRATEGY? When consumers find
out what is happening Adidas will cancel their contracts and
move along to countries such as China where there is even
less resistance. This happened in El Salvador and in
Thailand to cite two examples. This way workers can
continue to slave in Dickensian working conditions. Check
the Adidas FAQ or the Adidas CEO letter to shareholders
(just facts on products and financials); you will see it is
completely different than Nike's site, which defends every
factory scandal every day.

• DOES ADIDAS have A Code of Conduct? In 1996 Adidas

signed the International Football Association FIFA Code of
Conduct against child labor in the production of footballs
and international unions (ILO) are doing some monitoring
since July, 1st, 1997 (CCC). Currently there are more than
3,000 employees working at adidas’ two main operational
centres, at HQ in Herzogenaurach (Germany) and in
Portland, Oregon (USA). 12,433 employees work worldwide
directly for Adidas. Hundreds of thousands more work
under what is called "STANDARDS of ENGAGEMENT"
 PRODUCTION SYSTEM

INTRODUCTION: about quality

• QIP is a new quality Inspection system devised by Adidas

group.
• It is a very elaborate and comprehensive inspection
system, which enables an earlier detection of quality
problems and thereby ensures better and efficient quality
control.
• QIP primarily integrates all the production and pre-
production processes with Lab testing at each stage with
strict documentation of all the details on existing
processes.
• QIP is an effort towards creating a core quality team
(Adidas group & factory) that possesses greater synergy, is
more efficient and dynamic.

OBJECTIVE

To define internal quality and process systems enabling the

FACTORY TO ASSUME RESPONSIBILITY FOR
MANUFACTURING AND SHIPPING QUALITY
PRODUCTS of Adidas group standard.
SCOPE / FRAMEWORK OF QUALITY
INSPECTION PROCEDURE

• Quality inspection process broadly encompasses the

following topics :

A. Incoming material inspection

B. Work in process inspection
C. Finish goods ( Final random) inspection

“4- POINT” FABRIC INSPECTION SYSTEM

• Processed fabric will be graded using the “4-point”

system.

• The 4-point grading system derives its name from the

basic grading rule that a maximum of 4 penalty points
can be assigned for any single defect and that no linear
yard/meter can be assigned more than 4 points,
regardless of defects with in the yard/meter.

• Amount to Inspect :
Sampling of incoming fabric lots for audit shall be done on
a completely random basis using the following criteria:

-- 100 % inspection at Fabric suppliers

-- Minimum 10% up to 100% inspection at Garment Makers
based on the nature of the fabric, experience with T2 reliability

4 Point System(Penalty Point allocation)

All defects, which are clearly noticeable from 3 feet and

are not considered a part of the character of a
particular fabric, shall be scored as defects and demerit
points assigned according to their severity.

The length of the defects is used to determine the

penalty point. Demerit points for only major defects are
considered and shall be assigned as follows (defects in
any direction):

Size of Defect Number of

(length in inches) Penalty Points
3 inches or less 1
over 3 but not over 6 inches 2
over 6 but not over 9 inches 3
over 9 inches 4
Proposed Inspection Station

Inspection Equipment Requirements

• Inspection Machine
• flat surface/viewing area
• undercarriage Light ( back light )

• Inspection Lighting
• Overhead CWF lighting
• 100 foot candle / 1075 Lux
(at least 40 W X 4 Light Tubes )
 Fabric Acceptability

• Following is the Acceptance point – count :

a. For Synthetic / synthetic blend Weft knits, warp

knits, and synthetic woven = 25 points per 100 linear
yards is the average acceptable defect rate.
b. For Twills, cottons and cotton blends = 27- 30 points
per 100 linear yards is the average acceptable defect
rate.

Garment Technical
• Pre Production Meeting
o The meeting is conducted by adidas QA at the
T1 site to ensure product integrity is
maintained and to resolve any production
issues.
• Counter Sample
o After size set approval T1 makes the counter
sample in size MEDIUM using actual fabric
and accessories, this is signed off by the adidas
QC and it will be used as the production
standard.
• Inline & Final Inspection
 o In-line inspection is carried out during the full
production process from raw materials to
cutting and sewingFinal inspection conducted
as per 2.5 AQL

• Process flow

T1 inputs sample measurements intoThe technician checks the

RMS2 2 following:
is the spec locked
After FIT approval (PFR), T1 creates fit & measurements
the production spec in RMS2 based construction
on the adidas specified grade rules workmanship
Work in Process Flows and Check labellingpoints
The prod spec must be finished 2 weeksartwork position
before buy ready has action been taken
from previous comments
LO technician checks and locks the 2
prod spec
QA hold the PP meeting
at the T1 with their team

Counter sample is made

in actual fab & acc

Random in-line
inspection

Final inspection 2
 SEQUENCE OF OPERATIONS
PREPRODUCTIONACTIVITIES
PRODUCTCLARITY
1.AD
2.ORIGINAL SAMPLE
3.SPECS(BASIC+GRADINGDETAILS)

FITSAMPLE 1 LAB DIP APPROVAL

APPROVE BASIC SPECS OF GARMENTS
2 FABRIC KNIT DOWN APPROVAL

3 TRIMS APPROVAL
FITCOMMENTS
4 EMB. / PRINTINGAPPROVAL
APPROVED REJ ECTED RESUBMIT

SIZE SET
1.FREEZE GRADING/ PRODUCTION PATTERNS
2.ORDER TRIMS WHICH ARE BASED ON GRADINGS

APPROVED REJ ECTED RESUBMIT

MCS
1.ORIGINAL INPUTS
TEAR
Down
2.2 PCS PER SIZE TDM Meeting
3.TOBE MADE AS PER ACTUAL PRODUCTION RUN

SGSTESTING
SGS Testing - FPT & GPT

CUTTING

PILOTRUN

PRODUCTION

IN- LINE INSPECTION

MIDINSPECTION

FINAL RANDOMINSPECTION

CHECKPOINTS

Quality Control
 • Maintain standards at all stages
• Sample approval
• QC Inspection:
– Raw Materials
– Cut Work
– Fusing
– Embroidery/Print/Heat Transfer
– Inline Auditing
– End of Line

Quality Control – Raw Materials Fabric Testing

• T2 test results must be checked by T1 for every dye lot

before cutting

• T1 should carry out fabric testing to verify T2 test results

– The cost of testing at bulk is with the T1 not Adidas

• T1 testing before cutting (FPT)

– Garment washing

– Colour Fastness

– Colour Migration & Cross Staining

– Dry Rub (Crock Meter)

 – Shrinkage e

– Tensile Strength

Quality Control – Cut Work Inspection

• Laying up must be even, do not mix colours in

the lay

– Cut work bundles to be checked against

the master pattern (top, middle and

bottom plies)

– Non conformances may need to be re cut.

 Quality Control – Embroidery

• Embroidery must match the approved artwork e.g.

shape, colour, size, placement, stitch count etc

• 100% quality check to the approved standard

 • Needles must be changed regularly

• Use tear off backing

• All non conformances will need to be re cut

Quality Control – Print

• 100% inspection for quality

• Print must stretch with the fabric, there must be no

holes or bubbles and no peeling off

• Conduct wash test

• All non conformances must be re cut

Quality Control

– Inline Inspection
 – Quality standards on line

– Operators must understand the standard

– Random inspection

–
Quality Control – End of Line Inspection

– Counter sample available signed by Adidas QC on

each line

– 100% inspection as per the Adidas clockwise method

– Check seam elongation

– Operators must understand the standard

 Finish Goods Inspection

Final Random Inspection for Garments

1.Verification of OCL

2. Quantity and Assortment check

3. Packaging Check – Label, Tags, insert tags

etc.
4. Sampling (Inspection sample selection)

5. Style, material, color and accessories check

6. Visual inspection and defect classification

Acceptable Quality Level (AQL)

• A Statistical Sampling Tool

• It is the maximum percent defective, that

for the purpose of sampling Inspection

can be considered satisfactory as a

process average

• Adidas Final random Inspection will be

conducted at 2.5 AQL

 AQL Chart
Lot or S p e c ia l In s p e c tio n LGe ev ne elsra l In s p e c tio n L e v e ls
B a tc h s iz e
S -1 S -2 S -3 S -4 I II III
2 to 8 A A A A A A A
9 to 1 5 A A A A A B C
1 6 to 2 5 A A B B B C D
2 6 StoIN G5L0E S A M P LAIN G PBL A NBS F OCR N OCR M A LD IN S P EC
E T IO N
5 1 to S am9 ple
0 BA c c eptable
B C q uality
C levelsC ( Enorm al Fins pe c tion )
9 1 toS iz1e5 0 S iz e B 1.0 B C 1.5D D2.5 F 4.0 G 6.5
C ode S iz e
1 5 1 Le totter2 8 0 B A c C R eDA c ER e A cE R eGA c RHe A c R e
2 8 1 toA 5 0 0 2 B C D E F H J 0 1
5 0 1 toB 1 2 0 0 3 C C E F G J0 K1
1 2 0 1 Cto 3 2 0 05 C D E G 0 H 1K L
3 2 0 1 Dto 1 0 0 08 0 C D F0 G 1 J L M 1 2
1 0 0 0 1 E to 3 5 13 0 0 0C 0 D 1 F H K M1 N2 2 3
3 5 0 0 1 F to 1 5 0200 0 0D E G J 1 L 2N2 P3 3 4
G 32 1 2 2 3 3 4 5 6
1 5 0 0 0 1H to 5 50 0 0 0 D0 01 E 2 G2 J 3 3 M 4P5 Q6 7 8
5 0 0 0 0 1J to o 80 v e r D 2 E 3 H3 K 4 5 N 6Q7 R8 10 11
K 125 3 4 5 6 7 8 10 11 14 15
L 200 5 6 7 8 10 11 14 15 21 22
M 315 7 8 10 11 14 15 21 22
N 500 10 11 14 15 21 22
P 800 14 15 21 22
Q 1250 21 22
Measurement Taking

• Think FLAT!
 • Layering: Use layering technique wherever
possible, i.e., placing one garment over the other
of same size & color. This technique is an
excellent tool to compare color variations &
major size deviations.

•
• Never STRETCH! (neither the garment nor the
measuring tape)

Visual Examination -Defect Classification

• Critical: Defect which could result in hazardous

or unsafe condition for individuals using or
maintaining the products as well as defects
contriving legal regulations.

• Major: Defects which reduce the usability as

solidity of product as well as obvious visual
defects reducing sales value of the products
 • Minor: Defects that are unlikely to reduce the
use of products but nevertheless may influence
the sale.

• Presentation
– Classification in Zones

– Most Critical is A-Zone

Always Go Clockwise!
 CHAPTER-3

DATA ANALYSIS AND INTERPRETATION

SWOT ANALYSIS

Strengths

• Global organization, with a strong international position

in 170 countries worldwide.
• High financial strength (1997, sales turnover, £131,511
million), sales growth of 29.3%.
• Strong brand image based on quality, environmental
friendly (greener), customized range.
• Industry leader in manufacturing and production.
Maximizes profit through efficient lean manufacturing
approaches (e.g. Total Quality Management) and JIT
(Just in Time) manufacturing and first mover in car
research and development.
• Excellent penetration in key markets (US, China, rd.
Opportunities

Macro- and Socioeconomic Opportunities

• Macro-Environment and Fiscal Policy Changes
Interest rate changes, tax reforms and currency exchange
rate developments regularly provide opportunities for
optimization. Our central Group Treasury and Tax
departments constantly monitor these developments to
identify potential opportunities to reduce our non-
operating expenses.
• Emerging Markets

• Economies that are small, but that have the potential for
growth in size and importance in coming years. For the
adidas Group, emerging markets are the developing
countries of Asia, Eastern Europe, Latin America and
Africa.

• Increasing Sports Participation Rates in Mature Markets

Fast-Growing Women’s Segment

Increasing Focus on Kids
Building Market Share in High-Growth Sports Categories
• Technology to Drive Growth of Customized Products

• Greater Connection to the Consumer at Point-of-Sale

• Cost Optimization To Improve Profitability

Threats

• Saturation and increased competition, intense marketing

campaigns increasing competitive pressures.
• Shifts in the exchange rates affecting profits and cost of
raw materials.
• Predictions of a downturn in the economy e.g. recession,
will affect purchases .As household budgets is in control
this could lead a decline in new sales and possible
rationalization of dealerships.

Adidas (overview)

Strengths Weaknesses
-Strong success in Europe -American athletes endorsed
-High-performance products by adidas are not as
-Recent selling of subsidiary popular as Nike’s
“dog” Salomon -it is gaining ground on
European soccer market
-Public dissent over use of
sweatshops
 Opportunities Threats
-Acquisition -Foreign exchange rates will
-Growing strength in golf result in loss of actual profits
industry through Tailor-
Made
and recent acquisition of
Max fly
-Growing revenue from
opening of own retail stores
As mentioned on their website adidas has been a leader in
Europe for years and have been able to become comfortable
there. Another strength is that adidas-Salomon produces high-
performance shoes. They have been able to attract hardcore
athletes as customers due to efficiently made shoes
(adidas.com). adidas recently announced that it will be selling
its Salomon brand to Amer Sports Corporation for $624
million. Salomon was originally acquired by the adidas Group
in 1997 when it paid $1.4 billion for Salomon and its
subsidiaries, including golf brand TaylorMade and cycling
brand Mavic. The sale will include the brands and subsidiaries
Salomon, Mavic, Bonfire, Arc’Teryk, and Cliché. Herbert
Hainer, adidas-Salomon Chairman and CEO, stated that
“Salomon has been a great member of our group. However, we
have decided that now is the time to focus even more on our
core strength in the athletic footwear and apparel market as
well as the growing golf category” (Bloomberg). This move will
allow adidas to rid itself of the recently slumping Salomon
brand, which posted a 1 percent drop in revenue along with a
74 percent drop in operating profit in 2004. The sharp
decrease in operating profit is due to recent restructuring that
reduced French production of Salomon products from 55 to 35
percent with new production taking place in Romania and
China. News of the sale spiked adidas’ shares up 9.2 percent,
reaching its highest point in six years, while Amer Sports
shares gained 7.6 percent.

A major weakness of the adidas brand is that they are

currently third in the American market for athletic footwear
sales. Another weakness is adidas’ recent fall in the soccer shoe
market. Nike took over first place in the European soccer shoe
market with its success of the Air Zoom Total 90. adidas’ final
weakness that must be mentioned is their use of sweatshops.
There were allegations of inhumane conditions in adidas’
Asian factories in 2000. However, adidas-Salomon maintained
that they were trying to fix the conditions.

FINANCIAL ANALYSIS
PROFIT ANALYSIS
 BALANCE SHEET AND CASH FLOW STATEMENT

NO CHANGES IN ACCOUNTING POLICY

The Group’s consolidated financial statements are prepared in
accordance with International Financial Reporting Standards (IFRS).
In line with IFRS, several new or amended standards and
interpretations were applied for the first time in 2007. see Note 1 In
2007, there were no changes in the Group’s consolidation and
accounting principles. Therefore, changes in accounting policy and
changes in management discretion in the application of accounting
standards had no impact on the structure of the Group’s balance sheet
in the reporting period.

BALANCE SHEET STRUCTURE1)

in % of total assets
TARGETS VS. RESULTS

2007 2007 2008

TARGETS RESULTS TARGETS

Mid-single-digit Net sales reach € 10.3 billion; High-single-digit

currency-neutral sales Group currency-neutral sales currency-neutral sales
growth grow 7 % growth

Bring major new Major 2007 product launches: Bring major new
concepts, adidas concepts,
technology evolutions new technologies in adiSTAR, technology evolutions
and SuperNova and Response and
revolutions to market running shoe families, revolutions to market
Stella McCartney “Gym /
Yoga” collection, TechFit™
apparel
Reebok
running shoes Trinity KFS II
and HATANA,
Rbk EDGE Uniform System™
apparel collection
Rockport
first footwear collection
incorporating
adidas Torsion ® technology
TaylorMade-adidas golf
r7 ® SuperQuad drivers,
POWERBAND shoe,
 Clima concept extended to
Golf apparel

Currency-neutral sales Currency-neutral sales Currency-neutral sales

to grow at all brands increase 12 % at adidas, to grow
and in all regions remain stable at Reebok and at all brands and in all
grow 9 % on a like-for-like regions
basis except North America
at TaylorMade-adidas Golf;
currency-neutral sales grow
in all regions except North
America

Gross margin range 45 – Gross margin: 47.4 % Gross margin range

47 % 47.5 % and 48 %
Operating margin Operating margin: 9.2 % Operating margin to be
around 9 % at least 9.5 %
Reduce operating Operating working capital as a Further reduce
working capital percentage operating working
as a percentage of sales of sales: 25.2 % capital
to below 25 % as a percentage of sales
Capital expenditure Capital expenditure: € 289 Capital expenditure
range € 300 million – € million range € 300 million – €
400 million 400 million
Reduce year-end net Net borrowings reduced to € Maintain or further
borrowings 1.766 billion; reduce net borrowings
to below € 2 billion year-end financial leverage: despite share buyback
58.4 %

Net income growth Highest ever net income Net income to grow
to approach 15 % attributable at least 15 %
to shareholders at € 551
 million (+ 14 %)

Further increase adidas AG share increased Further increase

shareholder value 36 %, outperforming DAX-30 shareholder value
and MSCI World Textiles,
Apparel and Luxury Goods
Index;
19% dividend increase
proposed; share buyback
program initiated
in January 2008

QUESTIONNAIRE

Name: ………………………………
Date: ……………………….

1) The key factors that motivated you to apply in “ADIDAS”

(tick any one)
• APPARELS
• FOOTWEARS
• SPORTS ITEMS
2) Where do you heard about the ADIDAS(in 15-20 words)

……………………………………………………………………………
……………………………………………………………………………
……………………………………

3) Rules of ADIDAS are: (tick any one)

o Rigid
o Flexible

4) Does ADIDAS take advantage of their current employee

pool? (tick any one)
o Yes
o No

5) Since, how many years have you been purchasing from

ADIDAS ?
6) Have you ever, faced any problem ?
o Yes (if yes, then click any one)
o No

7) Source of selling
• direct
• indirect
• personal mobility

8) Did ADIDAS faced an open door communication process?

(Tick any one)
• Yes
• No

9) Do the members get what they want ?

• Yes
• No
• Don’t know

10) What type of footwears are available? (Tick any one)

• Trendy
• Casual
 • sporty

11) Is training imparted to the fresh employees? (Tick

any one)
o yes
o no

12) Does the price at which it sells affordable (Tick any

one)
• Yes
• No
13) Are you satisfied with the discounts and schemes
procedure? (Tick any one)
 Yes
 No

14) Do you have any suggestions regarding improve

……………………………………………………………………………
……………………………………………………………………..
 SCOPE OF THE STUDY:

OBJECTIVES:

 Working of the unit-linked plans.

 Comparative analysis of the ADIDAS & NIKE


 Research methodology

 Data Collection:

(a) Questionnaires filled by various income groups.

(b)Internet (by searching about the investment plans of the
companies).

 Action plan:

(a) Firstly, collecting information from newspapers & magazines

like Economic Times, Financial Express, Business India, The
Times Of India, Internet.

(b)Secondly, getting the questionnaires filled (about 50) to find out

COMPANY’S REVIEWS

(c) Finally, analyzing the data collected and comparing the 10

RESULTS
 RESEARCH METHODOLOGY:-

“Research comprises defining and redefining problems,

formulating, hypothesis or suggested solutions, collecting,
organizing and evaluating data, making deductions and
reaching conclusions and at last carefully testing the
conclusions to determine whether they fit the formulating
hypothesis”.

Research means the systematic method consisting

of enunciating the problem, formulating a hypothesis,
collecting the facts or data, analyzing the facts and reaching
certain conclusions either in form of solutions towards the
concerned problem or in certain generalization for some
theoretical formulation.

The project titled, as” required research to be done. The

market credibility required the collection of Primary Data as
well as the Secondary data. The credibility literally means the
market value and the market positioning of a particular brand
or a company among its competitors ADIDAS is one by seeing
the awareness of people about a particular company and its
share in the market. Comparing the products of term policies
as well as the endowment policies.

Primary data : Questionnaire filled by people interviewed.

Secondary data: (i) Data collected for companies from various

sites

OBJECTIVES OF RESEARCH

1. To gain familiarity with a phenomenon or to

achieve new insights
into it.

2. To portray accurately the characteristics of a

particular individual
or a group.

3. To determine the frequency with which it is

running.
 CHAPTER-5

 FUTURE GROWTH & SUGGESTIONS

ADIDAS, in the present scenario is growing at an aggressive

pace. The company does a lot of survey & analysis in the
market to discover customer’s needs & expectations & tries
to improvise on its existing market linked plans along with
RETAIL policies. In addition to this , the company from time
to time keeps on introducing various new SCHEMES to cater
peoples’ interests. This has enabled Adidas to become market
leader in the sector of footwear’s and clothes .

CONCLUSION

The research project titled as “ADIDAS” enabled to

understand the competition among the various other
brand companies which have entered Indian market of
retail after 2000 .ADIDAS is one of the companies in the
private sector which are doing exceptionally good in this
sector due to their apparels to which people find very
attracting according to their needs. The reasons for this
are many like it is a company with very strong brand
names: ADIDAS is the no. 1 retail Manufacturer in
India also largest retail unit in the world. And is the
largest industry in India, with an employment of
around 8% and contributing to over 10% of the
country's GDP. Retail industry in India is expected to
rise 25% yearly being driven by strong income growth,
changing lifestyles, and favorable demographic
patterns. ADIDAS is expanding itself most aggressively,
as a result a great demand for real estate is being
created. ADIDAS retailers preferred means of
expansion is to expand to other regions and to increase
the number of their outlets in a city. It is expected that
by 2010, India may have 600 new shopping centers.