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    Adidas VS Nike

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    Charlie M JC
    This document provides a comparison of key financial metrics and strategies between Nike and Adidas for the years 2012-2016. It finds that Nike generally had higher return on equity while Adidas had higher gross margins and P/E ratios. It also analyzes the companies' sales, production, and financial situations in countries like Germany, China, Vietnam, and Japan. Overall, it presents an overview of the two major sportswear companies' international operations and financial performance.

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    © All Rights Reserved
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    Adidas VS Nike

    Uploaded by

    Charlie M JC
    187 views24 pages
    This document provides a comparison of key financial metrics and strategies between Nike and Adidas for the years 2012-2016. It finds that Nike generally had higher return on equity while Adidas had higher gross margins and P/E ratios. It also analyzes the companies' sales, production, and financial situations in countries like Germany, China, Vietnam, and Japan. Overall, it presents an overview of the two major sportswear companies' international operations and financial performance.

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    This document provides a comparison of key financial metrics and strategies between Nike and Adidas for the years 2012-2016. It finds that Nike generally had higher return on equity while Adidas had higher gross margins and P/E ratios. It also analyzes the companies' sales, production, and financial situations in countries like Germany, China, Vietnam, and Japan. Overall, it presents an overview of the two major sportswear companies' international operations and financial performance.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    187 views24 pages

    Adidas VS Nike

    Uploaded by

    Charlie M JC
    This document provides a comparison of key financial metrics and strategies between Nike and Adidas for the years 2012-2016. It finds that Nike generally had higher return on equity while Adidas had higher gross margins and P/E ratios. It also analyzes the companies' sales, production, and financial situations in countries like Germany, China, Vietnam, and Japan. Overall, it presents an overview of the two major sportswear companies' international operations and financial performance.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 24

    UKFF4024 Multinational Finance

    VS

    Presenters:
    1. Chong Xuet Ying 1406057
    2. Chow Mei Yeng 1406682
    3. Lee Geying 1305474
    4. Pan Wen Yan 1406351
    5. Ng Tiat Kuang 1501185
    Company
    Details
    Founder Bill Bowerman Adolf Dassler
    Phil Knight
    Founded Year January 25, 1964 August 18, 1949

    CEO Mark Parker Kasper Rrsted

    Headquarter Washington County, Herzogenaurach,


    Oregon, United States Germany
    Product Line Footwear, apparel, Shoes, Clothing,
    equipment, accessories Accessories
    and services
    Main Brands Nike Adidas
    Converse Inc. Reebok
    Hurley International
    1. Return on equity
    Company/ 2012 2013 2014 2015 2016
    Year
    Nike 22.0% 23.1% 24.6% 27.8% 30.1%
    Adidas 9.9% 14.3% 8.7% 11.2% 15.7%

    NIKE has higher return on equity compared to


    Adidas.
    Reason: NIKE has entered into license
    agreements that permit unaffiliated parties to
    manufacture and sell NIKE-owned trademarks
    products.
    2. Current Ratio
    Company/ 2012 2013 2014 2015 2016
    Year
    Nike 3.0 3.5 2.7 2.5 2.8
    Adidas 1.5 1.44 1.68 1.39 1.31

    Adidas has lower current ratio.


    Reason:
    Adidas business focuses on athletic footwear
    and apparel market.
    They have exit golf hardware market by sell
    of Adams Golf and Ashworth brands.
    3. Price/Earning Ratio
    Company/ 2012 2013 2014 2015 2016
    Year
    Nike 23.0 22.8 25.9 27.5 25.6
    Adidas 17.8 23.1 21.2 27.1 30.1

    Adidas has higher P/E ratio compared to Nike.


    It indicates that market is optimism regarding
    Adidass growth prospect. Hence, investors are
    willing to pay more for the share.
    4. Gross Margin
    Company/ 2012 2013 2014 2015 2016
    Year
    Nike 43.5% 43.6% 44.8% 46.0% 46.2%
    Adidas 47.7% 49.3% 47.6% 48.3% 48.6%

    Adidas has higher gross margin compared to


    Nike particularly on 2013.
    Reason: Adidas has introduced new products
    to the markets which tend to have a higher gross
    margin (Adidas Group, 2014)
    Current Account Balance

    Source: World Bank (2017)


    1. US home country to Nike experienced continuously deficit in current account
    balance
    Debit (outflow) Credit (inflow), import export

    2. Vietnam, China and Indonesia manufactured approximately 44%, 29% and 21%
    of total Nike brand footwear respectively (Nike Annual Report,2016).
    Credit (inflow) Debit (outflow), export import
    SALES
    MANUFACTURE
    FINANCIAL
    Sales
    Germany
    Germanys sales (17%) from 4,539 billion to 5.291 billion
    2015 2016
    GDP (US $) 3.06% $3.364 trillion $3.467trillion
    Exchange Rate CNY 6.939/ CNY 7.3657/
    Business Strategy Adidas used it own company advantage in
    market & the effective management system to
    launch out the new products that can satisfy the
    changes of the market.

    Germany is Eurozone members the interest rate stay low & export to other
    Eurozone member is cheaper (competitive advantage)German consumers
    have more money to spend locally significant drive the economic growth.
    Sales
    China
    Chinas sales (28%) from 2.469 billion to 3.010 billion
    2015 2016
    GDP ( current US $)1.2% $11.064 trillion $11.199 trillion
    Business Strategy Sought to reach lower tier cities consumer,
    Adidas entered Chinese E-commerce by
    launching the online store in tmall.com.

    This able for Adidas to meet the strong


    demand from growing domestic consumption.
    Production
    Germany
    Germany Production increase from 3,010,000 units to 3,600,000 units

    2015 2016
    GDP US$3.364 trillion US$3.467trillion
    Inflation Rate 0.23% 0.48%
    Business Adidas start piloting an automate shoes production
    Strategy which shoes manufactured by robots.
    Production
    Vietnam
    Vietnam production increase from 123,410,000 units to 151,200,000 units

    2015 2016
    GDP US$ 193.241 billion US$ 202.616 billion
    Inflation Rate 0.63 % 2.67%
    Business The cost of production is lower in Vietnam because
    Strategy Vietnam have low-cost labour.
    Vietnamese have an increase in literacy rate and
    increasing personal income.
    Financial
    Germany Japan
    2015 2016 2015 2016
    Lending 5.1% 5.9% 1.1% 1.0%
    interest rate
    Business Adidas bring the shoes production back to Germany by
    Strategy using the robotic to shortening production time.

    As MNC, Adidas establish hedging system on a rolling


    basis up to 24 months in advance, the purchasing volume
    is hedged approximately six months prior to the start of a
    season.
    Current Account Balance ( BOP, US $)
    Year Germany China Vietnam Japan
    2014 288,185,899,345.0 236,046,577,873.6 9,359,000,000.0 36,351,469,240.0
    2015 288,151,235,865.7 304,164,445,643.0 906,000,000.0 134,134,182,917.3
    2016 187,264,824,334.6
    289,158,837,956.4 196,380,229,052.9

    Positive BOT Positive BOT Positive BOT Positive BOT


    Source: World Bank 2017

    The Asia and Europe manufactures approximately 79% and 18% of total Adidas
    hardware production respectively (Adidas Annual Report, 2016)
    Credit (inflow) Debit (outflow), export import
    Johnson Shoes vs. Nike and Adidas
    Creating the New
    Developing a new business to achieve growth

    E-commerce
    Setting an online store
    Easy to purchase

    Expansion in global marketplace


    Use wholly owned subsidiary strategy to enter the foreign market.
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