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Nike, Pumas, Adidas Value Chains Essay

1848 words - 8 pages

Market Introduction

Football is the most popular sport in the world. Each year thousand million of jerseys are sold all over the world. This market provides a lot of opportunities because any person who likes football and local or/and a national team can buy a jersey. Furthermore, even a person who is not a big fan of football, can buy a football jersey to make sport like running or dance of gymnastic… without any consideration of age or gender. In a word, any sport lover from 7 to 77, male or female, can buy a football jersey. So there is a wide range of customers !
Moreover, football jerseys market offer is very diversified : each local or national team has its own jersey , so one ...view middle of the document...

Adidas

Adidas is based in Herzogenaurach, Germany and is employing approximately 38,500 people worldwide, the world’s second best seller behind Nike regarding Football. Just like Nike, Adidas sales regarding Football revenue of represents a 10% of the firm global revenue, with €1B for € 10.1 Billons in 2007. They distribute their products over 150 countries.

Puma

Also based in Herzogenaurach, Germany, Puma is employing approximately 4000 people worldwide. Puma stands for the outsider in the Nike versus Adidas struggle on football jerseys market. Once again, like Nike and Adidas, Football sales represent a 10% of the firm global revenue, with €250Millons for € 2.373 Billons in 2007. Puma distributes its products over 80 countries.

We must underline that Nike, Adidas and Puma are figuring Among Interbrand's "Best Global Brands" In 2009.
“At 26th on the list, Nike ranks best among sports brands, with its brand value increasing 4% year over year. Adidas also saw its brand value grow, and the company is on track to generate over $1B in sales in China by '10. Puma joined the top 100 for the first time, ranking 97th with a $3.2B brand value. “ www.interbrands.com

VALUE CHAIN

Primary Activities

* Inbound logistics & Operations :

The fact is neither Adidas, Nike nor Puma own a single factory. “ Nike, Adidas and Puma carryout no production. Instead, they just design and market their goods. “ exchange.unido.org

They focus on designing and marketing while production properly said is transferred to companies (mainly in Asia) that provide low labor costs and a quality product. Furthermore, they produce no raw materials, so they have to buy it.

Then, they send new designs and materials to the assembling companies which ship the finished products to distributors worldwide. This allows them cut down on the amount of time required from the initial design, to production and then distribution.

* Outbound Logistics

Once the jerseys are made, and sent to several kind of distributors(which we will detail), they can be commercialized in different ways:
* General sports shops, like Intersport, Decathlon or Made in Sport which pay licenses to distribute Nike, Puma or Adidas goods.
* The brands’ own stores, like the Adidas Store in Paris Champs Elysées
* E-commerce. Which includes, Brands’ own websites and websites of e-distributors who have once again a license to deliver Nike, Adidas and Puma’s jerseys.

* Marketing & sales

First let’s have a look at some figures :
Nike budget :
Adidas budget :
Puma budget :

Thanks to their financial power , Nike and Adidas are more exposed than Puma, since their marketing and communication budget are far higher. Nevertheless, Puma has its own assets to be once again a good challenger in this domain.
If we look at their...

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