Can Nike, A Soldier Of The Elite Army, Turn The Tide?

According to the world clothing and shoe net, Nike has experienced an embarrassing situation of falling share prices, slowing growth and declining futures orders over the past year.

Facing the pressure from investors and competitors, in mid June, the United States

Announced a series of strategic adjustment plans, including the reduction of about 2% of the world's manpower and the reduction of shoes that drag on performance.

Among them, the most striking thing is that

We have focused our attention on 12 key cities - New York, London, Shanghai, Beijing, Losangeles, Tokyo, Paris, Berlin, Mexico City, Barcelona, Seoul and Milan.

US brands see these cities as the most critical growth opportunities in the future, and they are expected to account for 80% of the company's global business growth by 2020.

Interestingly, the establishment of key cities was also a competitor.

A big strategy.

"This is a script that moved directly from Adidas," Camilo Lyon, an industry analyst, said recently.

As early as March 2015, Adidas had issued a strategic plan of 2016 to 2020 for five years.

Former CEO Herbert Heiner (Herbert Hainer) mentioned in the plan that up to 80% of the world's GDP comes from big cities, so the brand will focus more on these areas, focusing on the six major cities in the world, namely, Losangeles, New York, London, Paris, Shanghai and Tokyo. Adidas will increase product investment and marketing expenditure in these areas and absorb more management talents.

"As a global brand, Adidas needs to appear in major cities all over the world.

If we gain the advantage in New York and Losangeles, it will help us recover land lost in the United States.

So we are committed to these key cities in the world, "said Roland Auschel, Adidas's global sales director.

The phrase "helping us recover land lost in the United States" is particularly conspicuous.

In fact, similar to the current embarrassing situation of Nike, the German brand is even more down front before announcing the key city strategy.

In 2014, Adidas was one of the worst performing sports brands.

They lost to the new brand Under Armour in the North American market for the first time in third place.

In the same financial year, the German brand's share price fell 38% in the whole year, and the huge loss in the fourth quarter of 140 million euros was even worse.

Not only that, but in its traditional dominant soccer field, Adidas was caught up by Nike. In 2014, Adidas's soccer business income was about $2 billion 700 million, while Nike rose to $2 billion 300 million, and the latter was aggressive.

In the face of the attack from Nike and Under Armour, Adidas had to make changes.

Compared to Nike's 12 city list, Germany's six city strategy is more resource focused, regardless of the proportion of manpower, attention and marketing expenditure.

With the promotion of the city strategy, Adidas is closer to the needs of its core customers. In their words, it is to satisfy young consumers' pursuit of the trend.

Over the past two years, the German brand has allocated most of its expenses to the six main trend cities in the world, taking the lead in the upsurge of retro style and lifestyle sports shoes in the product line, and constantly contributing to the star shoes. Apart from social media dissemination, many stars or fashion bloggers appeared in the Stan Smith Series in New York and Paris fashion week. There are many Beckham and China supermodel Liu Wen, which affect the dress concept of young urban consumers.

Business Insider estimates that Adidas has created a culture of sport in the big cities as a center to spread and radiate to a wider world. In other words, if you win New York and Losangeles, then the brand will easily win the US market.

Roland Auschel, head of Adidas global sales, also said that the 50% young people in the world live in these key cities and contribute 80% of the global GDP. This is an important factor for brands to focus on training these markets.

With the rapid expansion of the urban effect, Adidas has undoubtedly gained more profitable space.

In the 2016 fiscal year, driven by a series of sports performance and sports fashion, the global sales revenue of the brand increased by 18% over the same period last year, and the growth in the Greater China region reached 28%, after a 24% increase in the inferior North American market.

The German brand not only took back second of the United States from Under Armour, but Adidas's share in the North American market nearly doubled last year, according to NPD, a research firm.

Looking back at this strategic change, former CEO Haina has spoken frankly that the previous German brand relies on football and ignores the actual demand of the market. The change is actually from soccer centered to consumer centered.

Just like the trend of fashion trend, the situation of Adidas two years ago is now on Nike's body.

After cutting down shoes and paying attention to key markets, can Nike, the elite soldier, turn the tide? At least its competitors have proved that this road works.

More interesting reports, please pay attention to the world clothing shoes and hats net.