Adidas: Seize The Olympic Business Opportunities And Get Into A Cost Dilemma

As a first class partner and official movement designated by the 2012 London Olympic Games and Paralympic Games Organizing Committee (LOCOG).

Partners, the second largest sportswear and equipment manufacturer in the world, Adidas group (Adidas) won the marketing rights and concessions of the 2012 London Olympic Games.

It will provide a full range of sports equipment for the British Olympic Association (BOA) and the British Paralympic Committee (BPA), and provide clothing for Olympic officials, London staff and volunteers, with the right to sell branded or branded sports equipment at Olympic venues and sports shops in London.

Adidas occupied London Olympic Games business opportunities, precisely because of the exclusive Olympic brand operation to attract public criticism, but also because of the "sweatshop" event in Kampuchea is facing the London Olympic Organizing Committee investigation.

In the past 12 months, Adidas's share price has risen by 18%.

However, the opening of the London Olympics had little effect on Adidas's recent share price. As of 25, Adidas's share price fell 1.06% this week.

According to British media reports, Adidas has invested 100 million pounds (US $154 million) to the London Olympic Games, becoming one of the biggest sponsors of the Olympic Games.

Herbert Heiner, Adidas Global CEO (CEO), said: "London Olympics is an excellent opportunity for Adidas. We will take this as the leading brand in the largest sports apparel market in Europe."

Founded in Nuremberg, Germany, Adidas is the world's second largest sportswear manufacturer after Nike.

According to Adidas's quarterly report this year, the company's net profit increased by 38% to 289 million euros (US $351 million) in the current quarter, and its revenue grew 14% to 3 billion 800 million euros (US $4 billion 600 million), exceeding expectations.

Adidas believes that top events such as the London Olympic Games and the European Football Championship will stimulate sales growth, while benefiting from fast-growing emerging markets. The net profit of the group will grow 12% to 17% this year, higher than the expected growth of 10% to 15%, and sales will grow 5% to 9%.

As a sports brand with a history of nearly 100 years, the Olympic Games and sportsmanship are the natural genes of Adidas.

Adidas and its brand originated in the name of Adolf Adi Dassler, and began manufacturing footwear products in 1920.

Darth is not only a shoemaker, but also an amateur athlete who is crazy about track and field.

In 1926, the Dassler family set up factories for manufacturing light running shoes and football shoes.

In 1948, due to family conflicts, the company was divided into two parts.

One company named Puma belongs to Adolf Darth's brothers and the other is Adidas today.

Since its inception, Adidas has always been a leader in the global sporting goods market.

The world's first pair of skates, the first pair of multi button shoes, the first pair of cast football spikes were born in Adidas.

In 1972, Adidas launched the trademark "clover" for the first time.

The "clover" represents the Olympic spirit of higher, faster and stronger, and also represents the map of the world, meaning to link the three continents.

"Clover" appears only on Adidas's classic products. All other products use the trademark of "three bars", which is known as "the three line of victory".

But since the 70s of last century, Adidas has been overtaken by its new rival Nike due to the neglect of jogging in the United States, the largest sports product market in the world, and the poor internal management.

In the 80 to 90s of last century, Nike began to become a leader in the industry, with a market share of 50% and a sharp decline in Adidas's market share.

In 1989, the Darth family sold Adidas to French Bernard Tapie M. Shortly afterwards, Bernard Tapie M sold Adidas control to a consortium of several French banks.

At the beginning of the Olympic Games, the Olympic Games were a great event for amateurs who pursues the spirit of competitive sports.

Today, commercial sponsorship is indispensable to the Olympic Games, and the Olympic Games have a distinct commercial flavor.

The British government passed the latest legislation "London Olympic Games and Paralympic Law 2006", aiming to provide legal protection for the commercial interests of Olympic sponsors.

According to British media reports, the London Organizing Committee has sent about 250 "brand police" in uniform on the streets of London to ensure that London merchants do not "embezzle" the Olympic logo.

In the Olympic area, no other person can engage in Olympic related activities except Adidas, McDonald's and other Olympic official sponsors.

Reported that the London Olympic Organizing Committee also stipulates that the opening ceremony of the London Olympic Games pupils honor guard, can only wear Adidas brand or do not specify the brand of sneakers.

Local media criticized the London Olympic Organizing Committee for "taking too stringent measures to protect the interests of sponsors, which made the Olympic Games lose its original flavor and deviated from the original idea and original intention of the Olympic spirit."

Roger, chairman of the International Olympic Committee, argued that "it is beyond doubt that the Olympic Committee sponsors the Olympic Games to protect the interests of the Olympic sponsors.

You can't let an enterprise invest a lot of money for the Olympic Games, but there is no advantage. "

The London Olympic Organizing Committee said that at least 700 million pounds must be raised from the sponsors to succeed in hosting the Olympic Games.

If we do not provide policy protection to the "Olympic brand", it is impossible to raise this huge sum.

On the eve of the opening of the London Olympic Games, Adidas is plunged into the "sweatshop gate" of Kampuchea and is under investigation by the Olympic Organizing Committee.

Subsequently, the company announced that it will close its factories in China in October, and its efforts to increase industrial pfer will attract market attention.

Adidas announced on the 18 day that it will close the only factory in China in Suzhou Industrial Park, and may move to Southeast Asia in the future.

According to a press survey, most of the Adidas products sold in the retail market of Beijing have been produced in Southeast Asia, such as Vietnam, Kampuchea and Thailand.

According to foreign media reports, at present, the cost of labor in Vietnam, Malaysia and Kampuchea is only about 1/3 of that in China. The rapid rise in the cost of China's market makes the "made in China" advantage no longer. It is expected that more manufacturing enterprises will "fly southeast" in the future.

Yi Dinghong, a professor at the school of labor and personnel at Renmin University of China, pointed out that the cost of labor in China's manufacturing industry has started to surpass those in Southeast Asia.

However, Adidas, which is chasing low cost, is also being investigated by the London Olympic Organizing Committee for "sweatshops" in Southeast Asia, Kampuchea.

According to foreign media reports, Adidas's factory workers who produce London Olympic licensed goods in Kampuchea earn only 10 pounds ($15) a week, which is suspected of violating the agreement signed by the London Olympic Organizing Committee.

The report says that workers in Adidas's Phnom Penh suburb, Kampuchea, work 10 hours a day, 6 days a week, with an average wage of 10 pounds a week.

According to the agreement signed by the London Olympic Organizing Committee and Olympic commodity manufacturers, Olympic sponsors must provide enough basic living wage for workers.

Adidas's wages to Kampuchea workers were accused of violating the agreement.

A spokesman for the London Organizing Committee said this week that the OCOG attached great importance to the accusation and would investigate the matter.

Adidas spokesman said Adidas did not violate its agreement with the London Olympic Organizing Committee. "The average wage of factory workers in Kampuchea is 84 pounds per month (about 130 US dollars), much higher than the minimum wage stipulated by Kampuchea."