CORPORATE OPPORTUNITIES OVERVIEW
| External and Industry Opportunities |
| Favorable macroeconomic and fiscal developments |
| Sports participation on the rise |
| Increasing demand for functional apparel |
| Fast-growing women’s segment |
| Ongoing fusion of sport and lifestyle |
| Emerging markets as long-term growth drivers |
| Growing popularity of “green“ products |
| Strategic and Operational Opportunities |
| Strong market positions worldwide |
| Multi-brand approach |
| Personalization and customization replacing mass wear |
| Breaking new ground in distribution |
| Taking control of distribution rights |
| Cost optimization to drive profitability improvements |
| Financial Opportunities |
| Favorable financial markets changes |
EXTERNAL AND INDUSTRY OPPORTUNITIES
FAVORABLE MACROECONOMIC AND FISCAL POLICY
CHANGES
As a consumer goods company, consumer confidence
and spending can impact our sales development.
Therefore, better than initially forecasted macroeconomic
developments
and fiscal policy changes which support private
consumption can have a positive impact on our sales and profitability.
In addition, legislative changes, e. g. with regard
to
the taxation of corporate profits, can positively impact
Group
profitability.
SPORTS PARTICIPATION ON THE RISE
Governments increasingly
promote living an active lifestyle to fight obesity and
cardiovascular
disease. According to the World Health
Organization, around 400 million people were considered
obese in 2005. Another 1.6 billion more were estimated to
be overweight. These numbers are projected to increase to
700 million and 2.3 billion respectively by 2015. Once considered
a problem only in affluent nations, obesity is also
becoming
an issue in countries with low per capita income.
This development has serious health consequences and a
dramatic
effect on health care expenditures. As a result,
governments
and non-governmental organizations are
increasing
their efforts to promote a healthy lifestyle and
encourage
sports participation. Given our strong market
position,
in particular in categories considered
suitable for
weight loss such as training, running and swimming, we
expect
to benefit from this trend.
INCREASING CONSUMER DEMAND FOR FUNCTIONAL
APPAREL
Consumer demand for functional apparel has
increased
significantly in recent years as consumers realize
the benefits of functional apparel over traditional cotton
sportswear. Improved moisture management, superior ease
of motion, and increased comfort are all factors encouraging
consumers to switch to high-performance gear. The design
and development of functional apparel requires significantly
more expertise, product and material research as well as production
know-how compared to low-tech apparel. Therefore,
only a few companies are able to supply high-end functional
apparel. Our resources and our positioning as a sports performance
leader enable us to constantly develop innovative products
and capitalize on them. For example, adidas is strongly
growing in
compression apparel. Due to our attractive
TechFit™ offering, we achieved strong growth in this category
in 2007 and expect
to double sales in 2008.
FAST-GROWING WOMEN’S SEGMENT
The women’s sports
market is one of the most attractive segments in the sporting
goods industry with women accounting for almost half of total
spending on athletic footwear. In addition, women also make
over 80 % of the purchase decisions for sports apparel for men,
women and children. As our Group generates the majority of
its revenue in the men’s segment, the women’s category offers
potential for further growth. adidas, Reebok and TaylorMade-adidas
Golf each address the female consumer in their own
distinctive way. With targeted product offerings in both performance
and lifestyle, such as the adilibria, Fuse and Clima 365
collections at adidas, the Avon Pink Ribbon collection at
Reebok
and the Women’s
r7® CGB MAX at TaylorMade, all of
our brands are well-positioned in the women’s category. Going
forward, we will extend and broaden our women’s offering –
emphasizing individuality,
authenticity
and style.
ONGOING FUSION OF SPORT AND LIFESTYLE
The border
between
pure athletics and lifestyle continues to blur as sport
becomes a more integral part in the lives of more and more
consumers. People want to be fashionable when engaging in
sporting activities without compromising on quality or the
latest
technological advances. At the same time, performance
features
and styles are finding their way into products meant
for more leisure-oriented use. As the global sports lifestyle
market is roughly three times larger than the performance
market, this development opens up additional opportunities for
our Group and our brands – which already enjoy strong positions
in this market. adidas has an authentic sports lifestyle
offering
and the adidas Sport Style division is targeted to grow
overproportionately
until at least 2010. 
see adidas Strategy
Lifestyle products
are also an important pillar in Reebok’s
brand strategy. We have augmented Reebok’s Classics and
music-inspired business with new celebrity partnerships to
upgrade and emotionalize the brand’s lifestyle offering. In 2008
and beyond, we will launch new initiatives in this category to
capitalize on Reebok’s
lifestyle credibility.
