This summer, Adidas sponsored nine teams at the FIFA World Cup, the world’s most watched sporting event. Two of the teams they sponsored were Germany and Argentina who ultimately played each other in the final. Despite Adidas’ success at that event, the company has been struggling recently.

The root of Adidas’ struggles lies in the U.S., the market responsible for nearly a quarter of their revenue. The company focusing on soccer, a sport that is not entirely popular in North America, as its primary sport, has caused part of their struggle. This has helped top competitor Nike win over North American consumers in the football and basketball industry, two of the most popular sports in the U.S.

This seems to me like the classic battle between the number one and two competitors in an industry. Adidas can try, but it is hard to see it overtaking Nike as the number one brand in competitive areas where Nike has led for ages. If they continue to see negative growth in sales in foreign markets in the long run, it may be in their best interest to focus more on what has made them a global success – the soccer industry.

Source:

http://www.businessweek.com/articles/2014-10-02/adidass-u-dot-s-dot-sales-drop-as-hedge-funds-circle