Nike vs. Adidas

Business Model Element	Nike	Adidas	Similarities	Differences	Competitive Advantage
Customer Segments	Athletes, sports enthusiasts, lifestyle consumers	Athletes, sports enthusiasts, lifestyle consumers	Both target athletes, sports enthusiasts, and lifestyle consumers. Both brands have a global customer base.	Nike has a stronger presence in North America. Adidas has a strong global presence with a significant focus on Europe.	Global Presence (Both), Strong North America (Nike), Strong Europe (Adidas).
Value Proposition	Innovation, performance, lifestyle, branding	Innovation, performance, sustainability, branding	Both emphasize innovation, performance, and branding. Nike is known for innovation and a performance-focused approach. Adidas highlights sustainability efforts.	Nike is often seen as more performance-oriented, with a strong emphasis on innovation. Adidas places a greater focus on sustainability initiatives across its products.	Innovation and Performance (Both), Sustainability (Adidas).
Channels	Retail stores, e-commerce, wholesale	Retail stores, e-commerce, wholesale	Both utilize retail stores, e-commerce, and wholesale channels. Nike operates its own stores. Adidas also uses these channels for distribution.	Nike owns and operates its retail stores. Adidas utilizes similar channels for product distribution.	Owned Retail Stores (Nike), Retail and Wholesale (Both).
Customer Relationships	Brand loyalty, community engagement	Brand loyalty, community engagement	Both foster brand loyalty and community engagement. Both brands maintain strong relationships with consumers.	Nike and Adidas both prioritize building strong brand loyalty and fostering engagement within their communities of athletes and sports enthusiasts.	Brand Loyalty and Community Engagement (Both).
Key Activities	Research, design, marketing, manufacturing	Research, design, marketing, manufacturing	Both engage in research, design, marketing, and manufacturing activities. Nike focuses on innovative product design. Adidas emphasizes design and sustainability.	Nike’s key activity centers around innovative product design. Adidas places a significant emphasis on design and incorporates sustainability practices into its manufacturing.	Innovative Product Design (Nike), Design and Sustainability (Adidas).
Key Resources	Brand, product innovation, marketing	Brand, product innovation, sustainability, marketing	Both rely on their brand, product innovation, and marketing resources. Nike’s innovation is well-known. Adidas prioritizes sustainability.	Nike’s key resources include a strong brand, innovation capabilities, and marketing prowess. Adidas emphasizes sustainability practices as a key resource.	Brand and Innovation (Both), Sustainability Initiatives (Adidas).
Key Partnerships	Sports teams, athletes, retailers, suppliers	Sports teams, athletes, retailers, suppliers	Both collaborate with sports teams, athletes, retailers, and suppliers. Nike partners with prominent athletes and teams. Adidas collaborates with athletes and artists.	Nike often secures partnerships with high-profile athletes and sports teams. Adidas has a history of collaborations with athletes, artists, and influential figures.	High-Profile Athlete Partnerships (Nike), Collaborations with Artists (Adidas).
Revenue Streams	Footwear, apparel, equipment, accessories	Footwear, apparel, equipment, accessories	Both generate revenue from footwear, apparel, equipment, and accessories sales. Both have diverse product lines and revenue streams.	Nike has a larger revenue stream from athletic footwear. Adidas has a significant focus on athletic footwear but also diversifies its product offerings.	Athletic Footwear Dominance (Nike), Diverse Product Offerings (Both).
Cost Structure	Manufacturing, marketing, brand promotion	Manufacturing, marketing, brand promotion	Both incur costs related to manufacturing, marketing, and brand promotion. Nike invests heavily in marketing and brand promotion. Adidas focuses on manufacturing and design.	Nike allocates substantial resources to marketing and brand promotion, resulting in high costs. Adidas places a greater emphasis on manufacturing and design expenses.	Extensive Marketing (Nike), Design and Manufacturing (Adidas).

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Who Owns Adidas

Adidas is a German multinational best known as a designer and manufacturer of sportswear and related accessories. It was founded in 1924 in the Bavarian town of Herzogenaurach, Germany, and did not take on the Adidas name until 1949. The new company, known today as Adidas AG, is the holding company for the Adidas Group and the sole owner of Adidas. Some of the company’s largest shareholders include: Groupe Bruxelles Lambert SA (7.6%), Nassef Sawiris (3.3%), and Norges Bank Investment Management (2.8%).

Adidas Revenue

Revenue in 2019 was $23.64 billion. Revenue in 2020 decreased to $18.43 billion. Revenue increased in 2021 to $21.23 billion and further increased in 2022 to $22.51 billion.

Adidas Profits

Net income in 2019 was $1.97 billion. Net income in 2020 dropped to $432 million. Net income in 2021 increased to $2.11 billion but decreased in 2022 to $612 million.

Adidas Revenue Breakdown

In 2019, Footwear, Apparel, and Accessories and Gear had revenues of $13.52 billion, $8.96 billion, and $1.15 billion, respectively. In 2020, Footwear revenue decreased to $10.13 billion, Apparel to $7.31 billion, and Accessories and Gear to $0.991 billion. Revenues in 2021 increased for Footwear ($11.33 billion), Apparel ($8.71 billion), and Accessories and Gear ($1.19 billion). In 2022, Footwear revenue grew to $12.4 billion, Apparel remained relatively stable at $8.7 billion, and Accessories and Gear increased to $1.49 billion. Between 2019 and 2022, Footwear consistently generated the most revenue, followed by Apparel and then Accessories and Gear.

Adidas Distribution Strategy

In 2022, E-Commerce (Direct-to-Consumer) contributed to 20% of total revenue. Own Retail (Direct-to-Consumer) accounted for 19% of total revenue in 2022. Wholesale made up the majority of revenue in 2022, at 61%.

Adidas Employees

In 2022, the company had 31,477 employees in own retail. Sales function comprised 3,112 employees in 2022. There were 8,254 employees in the logistics department in 2022. Marketing had 4,685 employees in 2022. Central Administration, Production, R&D, and IT had 5,161, 558, 1,031, and 4,980 employees, respectively, in 2022.

Adidas Production

In terms of Footwear production, 34% came from Indonesia, 32% from Cambodia, 16% from Vietnam, and 18% from China. Apparel production was distributed as follows: 22% from Indonesia, 17% from Cambodia, 44% from Vietnam, and 17% from China. For Accessories & Gear production, Vietnam contributed 28%, Turkey 26%, Pakistan 25%, and 21% came from other countries.

Adidas Revenue By Geography

In 2022, EMEA (Europe, Middle East, and Africa) generated €8.55 billion in revenue. North America contributed €6.4 billion in revenue in 2022. Greater China, Asia-Pacific, and Latin America had revenues of €3.18 billion, €2.24 billion, and €2.11 billion, respectively, in 2022.

Related to Nike

Who Owns Nike

The Knight family owns Nike. Indeed, the top individual shareholder is Travis A. Knight, son of Philip Knight, co-founder of Nike, with a 7% stake in Class A stocks and a 2.4% stake in Class B stocks. On the other hand, the Knight family also controls the company tightly through their Trusts and an LLC called Swoosh (the Nike logo’s shape is a “swoosh”). Through individual shares, Swoosh LLC, and Travis Knight’s irrevocable trust, the Knight family controls over 97% of Class A and 21% of Class B stocks.

Nike Business Model

Nike follows a wholesale strategy combined with a very strong direct distribution strategy. The company makes money primarily from footwear, which represented over 64% of its total revenues in 2023, followed by apparel (27%). The most successful Nike brand is the Jordan Brand, which in 2023 generated $6.6 billion in revenue. Nike is the master of demand creation and generation through its influencer campaigns, where athletes become an inspiration for everyday people.

Nike Strategy

Nike leverages both a wholesale and direct distribution strategy. Indeed, while still in 2023, most sales come from wholesale distribution, in reality, since 2020, Nike has been ramping up its direct distribution through its NIKE stores and e-commerce platform (SNKRS).

Nike Revenue

Nike generated most of its revenue from footwear. Indeed, in 2023, Nike generated over $33.13 billion in revenue from footwear, $13.84 billion in apparel, $1.73 billion in equipment, and $2.43 billion from the Converse brand.

Nike Financials

Nike generated $51.22 billion in revenue in 2023 and over $5 billion in net profits, compared to over $46.71 billion in revenue and $6.05 billion in profits for 2022.

Nike Mission Statement

Nike’s vision is “To bring inspiration and innovation to every athlete in the world.” At the same time, its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sports innovations, by making our products more sustainably, by building a creative and diverse global team, and by making a positive impact in communities where we live and work.”

Nike SWOT Analysis

Nike Competitors

Jordan Business Model

Jordan follows a demand generation business model, where its iconic brand works as a propeller for the sale of its footwear and apparel, that in 2022 generated more than $5 billion in revenue for Nike or more than 10% of its total revenue.

Converse Business Model

Converse is an independent brand part of Nike’s family of brands. Indeed, Converse generated $2.35 billion in revenue in 2022. And like Nike, it follows an heave Wholesale distribution strategy, where most of its sales are made, through footwear. However, Converse follows also a direct distribution approach where it sells directly via its monobrand stores.

Michael Jordan’s Net Worth

Michale Jordan is a billionaire but doesn’t own the Jordan brand, which is part of Nike. Yet, he gets 5% royalties on the sales of Jordan. For instance, as of May 31, 2023, Nike had endorsement contract obligations of $7.6 billion, of which over $330 million were to be paid out to Michael Jordan as royalties on the sales of Jordan in 2023 (the company made over 6$ billion in sales in that year). We estimated that between 2018-2023 alone, Nike paid (or is paying) Michael Jordan over one billion dollars in royalties for Jordan’s brand sales.