The headquarters of the Adidas AG is based in Herzogenaurach, a small town close to Nuremberg in southern Germany. A team of DW journalists visited the sports good manufacturer and Arunava Chaudhuri was one of them.
Official World Cup ball "Teamgeist" made by Adidas
When you reach Herzogenaurach via the Autobahn 3 (German motorway) you are in the countryside of Franken. You travel through small side roads to reach the new Adidas-Salomon AG headquarters, housed in what used to be a US army base. The German sportswear giants have transformed it into their global operations headquarters. Old three- to four-storeyed structures connected through modern glass constructions constitute the architecture of the place. Old meets new, it could also be an Adidas ad slogan.
The main purpose of our visit was to get to know more about Adidas and what their plans are for the upcoming 2006 FIFA World Cup.
Adidas was founded by Adolf Dassler in 1949 and had their first big international sporting success in 1954 when Germany won the World Cup against the mighty Hungarians wearing Adidas boots in Bern, Switzerland. The boots were the first to have removable studs: a sensation in those days. Adidas didn’t have to look back from that point on, and went on to become football’s biggest brand. Still, the company had troubled times in the early 1990s when the Frenchman Bernard Tapie took charge: Tapie nearly led Adidas to bankruptcy. After the new management under Dreyfuss and Tourres took over in 1993, the good times were back and the company was listed on the stock exchange in 1995. In 1997 Adidas acquired the Salomon Group, who is more into the skiing business, the two together to be re-branded Adidas-Salomon AG. But last year Adidas sold Salomon to Amer Sports. Adidas claim that they did not have the experience and the expertise to manage a ski company, their core competence being in other areas. In October 2005 Adidas went on to buy American rivals Reebok to move closer to their biggest rivals Nike Inc. And on May 1 Adidas-Salomon AG became Adidas AG.
Adidas in Asia
In its home country Adidas has only 200 people working in production. More than 90% of Adidas products are made in Asia. Besides Thailand, Indonesia and Vietnam, India is becoming an important production base. The production has been shifted to Asia mainly due to cost factors, as it is cheaper to produce in Asia than in Europe. Close to 440,000 people work for Adidas directly or indirectly at contract producers’ and this number is likely to increase.
Currently Japan is the biggest market in Asia, while China and India are becoming more and more important due to their economic boom. Worldwide, Adidas has its biggest growth factors across Asia.
Adidas World Cup plans
As official sponsor of world football governing body FIFA and host nation Germany, besides being a German company, the 2006 FIFA World Cup is a home game for Adidas. And they are using this in their global marketing promotions. Adidas is spending millions to promote their products and also their brand through ad campaigns, billboards, promotional events and so on.
At the 2006 World Cup Adidas are kitting the referee’s and all World Cup related staff besides six national teams. Those six national teams are hosts Germany, Argentina, France, Spain, Japan and debutants Trinidad & Tobago. Compared to arch-rivals Nike and Puma those six sides don’t sound like much, since Puma is kitting nine teams, while Nike kits eight. But Adidas maintain that quality and not quantity is their main criterion in choosing teams.
Nevertheless, they’d have loved to see their kitted sides – 2004 European champions Greece, China, African giants Nigeria - make it to the World Cup.
Adidas at the World Cup
The figures that Adidas supplies for the World Cup are impressive:
2,650 Teamgeist (Team Spirit) branded footballs for the 64 matches
16 balls per match, each ball is special
35,000 products (kits, shorts, socks, shoes, etc) for the six Adidas teams
265,000 products for the 14,000 volunteers
Adidas plans to sell 6 million pieces of World Cup merchandise
Adidas hopes to sell at least 500,000 Germany replica shirts