The Business Logic Of Nike And ADI's Contending For Hegemony

Everyone wants a pair of Yeezys.

In February 2015, New York

In the evening, Kanye West released the first fashion product he co worked with Adidas, the sports shoes series known as Yeezys, a suede leather high priced sports shoes with a patented elastic sole made of side zippers and spaceship foam. It looks like it came out from the Star Wars props department.

Nike is also not to be outdone - it is not only the most popular.

It is also the world's most valuable sportswear brand, with 57000 employees and a market value of US $86 billion.

Let the low-key sneakers become a sport shoe culture that highlights their personal style. Nike has a kind of respect that consumers can't buy.

In fact, big stars have never blink with Nike. Even Kanye has spent 4 years in Nike with his own Air Yeezy product line.

Then in 2013, Kanye suddenly announced that he wanted to leave Nike for Adidas.

Kanye said Nike limited his creative freedom and did not pay enough.

"They didn't give me the chance to grow."

He said, "they are grinding away a business old card."

He is not the only one who thinks so. Other professional designers say the same thing.

Subsequently, Kanye and Adidas designers work together to develop Yeezy Boosts series, and say, "they make me realize my dream".

Within a few minutes of the release, 9000 pairs of US $350 Yeezys were sold out in the US, and the average price of the resale points was $1500, and some scalers were 5 times the bid price.

This is the first time in recent years that sports shoe companies have launched an attack on Nike.

Endorsement storm

Nike's endorsement strategy seems to be: beating opponents.

It is reported that they spent a total of 8 billion dollars on publicity endorsements since 2002, and can know a bit from the company's all star lineup.

Experts estimate that the size of the global sports shoes market is around $55 billion, which is more than the national GDP in Ethiopia.

No one likes to buy sports shoes more than Americans, and they buy more and more.

According to the NPD Group survey, US consumers spent $28 billion on sneakers in 2014, almost 50% more than they did 5 years ago.

NPD analysis of Matt Powell, who claims to be "sports shoes scientist", believes that this growth will continue in the foreseeable future. He said we are entering a "eternal country of sports shoes".

Nike controls 62% of the US market share, while ADI's share of the US market is only 5%. The reasons for its hegemony are various: large size, fashionable appearance, strong endorsement, and cater to the traditional supporters of the veteran brands of Portland pioneers and Jordan, which are some of the coolest and most desirable Sports shoes. It employs 650 designers, more than any shoe manufacturer (Adidas has only 200 or more) and gives them unmatched resources.

Nike is willing to make huge bets, and when it comes across problems, it will admit mistakes and move on.

Over the past few years, Adidas seems destined to lag far behind Nike in the US.

ADI is rooted in football culture. (now it still provides clothing for clubs including Manchester United, AC Milan and Real Madrid) and maintains a position as top sports shoe retailer in Western Europe.

Although it has offices in the United States, most of its designers and executives are stationed in Germany's global headquarters.

The average American consumer often can't buy ADI's products, and it's not surprising that ADI also discriminate against American rugby, baseball and basketball "San Sheng".

This situation has changed since 2014. As Mark Kim, President of Adidas New Zealand, took office, he launched an unpredictable challenge to Nike - Kanye's shoes were only a small part of it.

Under the leadership of Kim, Adidas invested heavily in advertising and swallowed new spokesmen.

Last summer, Adidas hit Adidas's heaviest hit, a higher price than Nike snatched NBA's "long bearded legend", which reportedly spent $200 million on a 13 year deal.

In fact, Adidas is in the most active marketing activities in the company's history, just as American singer and music producer Farrell designed his own dots, Adidas sneakers and lime green jacket.

In 2014, Adidas also sold a pair of $800 pairs of sneakers with Gothic Rock designer Rick Owens. Owens is the Dark Lord of senior men's clothing, combining his grotesque sports shoes with sheepskin.

The Yeezy Boost 350 low shoe was launched in June last year, using seamless textile mesh upper and lace rope, which was sold out within an hour.

Adidas has also developed a key innovative technology in the Boost product line, which uses patented elastic foam material on the sole.

And Adi pforms the positioning of Adidas sports classic series (Originals clover) sports shoes such as Stan Smith and Superstar into not only sports shoes, but also Smith's fashion.

In addition, ADI's creative director was pferred from Germany to the United States with a team of top designers. They were shouldered from Nike to seize the US market.

Young tide makers have noticed.

In August last year, Adidas announced the signing of NBA rookie - last year, Duke, who won the national competition for Winslow.

After signing the contract with Adidas, he said: "what they do to Kanye and the sports classics is changing the rules of the game."

Adidas may never be able to reach Nike's annual sales of 3 billion US dollars, but it is making every effort to make Nike obsolete - first win the taste war, and eventually build enough Street image to win long-term competition.

Competition caused by "digging Corner Gate"

Because Adidas can't afford to compete with Nike for so much money, it deliberately differenties itself.

ADI's endorsement tends to be more avant-garde young athletes or celebrities across the fashion circle.

Nike headquarters's preventive measures and security work are very strict.

The "innovative kitchen" is the design center of Nike, where there are "libraries" showing every shoe produced by Nike, which is open to a small number of backbone designers and researchers.

The "innovative kitchen" carries the important expectation of the sports shoes giant, and can even be regarded as the cradle of the best sneakers in the world.

Later, 3 superstars in the kitchen, designer Dennis Dekovic, Mark Mcna and mark Dolce, were picked up by Adidas, forcing Nike to fight back by legal means.

Dolce once helped Nike develop the most exciting products, including the air force 1 Series (Air Force 1), which is the backbone of hip-hop culture advocating flawless design.

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The thing is this: in 2014, dissatisfied with the repressive atmosphere in the kitchen, 3 designers began to discuss the establishment of their own design studio.

Adidas just pulled out the olive branch as needed, and they accepted it, and opened Broolyn's studio in Adidas's name.

The 3 designers became "anti".

"Small and ingenious, free thinking and anti bureaucracy, have the right to get inspiration directly from the street and join the product manufacturing.

So Nike threw $10 million in a lawsuit, claiming that 3 designers were defaulting, with a series of other indictment, including civil collusion.

The central point of the prosecution is that 3 designers have provided business secrets to Adidas.

Nike claims that he had copied the contents of his laptop and left it as a private design document before leaving.

But after checking all kinds of information provided by electronic equipment and designers, Nike still has no evidence to accuse stealing commercial secrets.

Two months later, Nike and the 3 designers agreed to solve the lawsuit privately.

After that, Adidas quickly incorporated the 3 designers into the company.

In addition, Nike and Adidas have been involved in a series of other cases.

For example, the design of knitted shoes on both sides has caused disputes.

Before the London Olympics in 2012, Nike and Adidas launched their first pair of running shoes respectively: Nike's Flyknit and ADI's Primeknit.

Nike released in February of that year, ADI in July, and praised the product as "the first such type of running shoes".

Subsequently, Adidas received a patent infringement lawsuit letter from Nike's German division, calling for the end of the production and sale of Primeknit in Germany.

In August 2012, Nike won the lawsuit, and Adi stopped producing and manufacturing this kind of knitted sports shoes.

As a counterattack, ADI turned to question the justification of Nike's European Patent in a few months.

As a result, Nike's patent is invalid. Adidas can produce shoes with knitted elements freely, but it is not over yet.

Since then, Nike and Adidas began selling their respective knitted shoes respectively in the US, and in the late 2012, in order to prevent Nike from letting it sell shoes, ADI also questioned the patent rights of Nike.

Later, Nike lost the lawsuit and appealed again, claiming that he invented the "new" knitted technology and "satisfied the need for more efficient manufacturing of sports shoes for a long time."

In short, the two companies always fight for market share, especially in the United States, where their wars inevitably go to court.

But even so, Nike still occupies the first place.

The brave are fearless and the sword is not old.

It is said to help persuade Nike 3 designers to job hopping, Adidas is Brian Foresta, deputy director of ADI basketball design. Adidas is now on the top floor of the sport.

"When a brand is inserted into a giant wing, just like blood sugar rising, it starts to increase sharply and then weakens."

Fores Kobita said, "I've experienced ADI before, but that's not what we want to do."

On the contrary, he said he decided to stop some projects and continue to invest heavily in promising design products.

"We have competitors like Nike in all respects."

Fores Kobita said, "but they will not threaten us in any way, because they are heavyweight, big companies, too saturated in the market, and I think people are looking for change."

Of course, for Nike, "over saturation" is the other side of the exclusive market.

Adidas may be aggressive, or it may have the courage of the underdog.

But Nike has been winning for so long in the war on sports shoes, so relying on the legacy mode can also easily maintain the fruits of several years.

The brand Jordan endorsed alone accounts for more than 20 times the market share of basketball shoes in the United States than Adidas.

But after all, Adidas will also move towards avant-garde and modernization.

Will this worry Nike?

"When you are busy moving towards the future, you will not worry about who is behind you."

Tinter Hatfield, the legendary designer of Nike, said, "if someone surpasses us, it's only because they are better -- because we have not done the right thing.

It is hard to surpass us now because we are training in a very wise way. "

Leo Chang is the basketball design director who maintains Nike's dominance in NBA. After graduating, he supervised the top 3 famous sneakers product lines of the active players -- Lebron, Durant and Kobe.

In addition to the Lebron line, Nike's signature shoes are Nike's largest personal profit product, and it harvested $195 million in 2014.

In the Nike Park, there is a building called Steve Pury Fontan. He is a student of Nike co-founder, track coach and the first real Nike star Bill Bowerman.

There are sneakers and sportswear worn by him in the building, and a famous saying of this great runner: "maybe someone will beat me, but they must sweat and sweat."