Strategy

To achieve our goal of leadership in the sporting goods sector, the adidas Group continually focuses on strengthening and developing our brands. We aim to maximize consumer impact and enhance brand profitability through the application of five strategic approaches.

Matching Our Structure to Our Consumers

Anticipating and fulfilling consumer desires and needs is central to building powerful brands. The Group organization is structured to ensure that our brand values are inseparably linked to the particular expectations and aspirations of our consumers. This is unique in our industry, which is traditionally organized along footwear, apparel and hardware lines, and is a competitive advantage for our Group.

Extending Design and Innovation Leadership

Consumer buying and brand perception in the sporting goods sector are intrinsically linked to cutting-edge design coupled with market-leading, high-profile technologies that capture consumer imagination. At the adidas Group, we are committed to keeping our product pipeline full with new, exciting designs and technologies. We plan to launch at least one major new technology or technological evolution per year. 

Developing Leading Positions in All Our Major Markets

We are in the business to win. We aim to occupy the number one or number two positions in all the markets and categories in which we compete. To accelerate our top-line growth going forward, we will intensify our activities with key accounts, step up own-retail initiatives and increase our focus on selected consumer groups (e.g. women). On a regional basis, our efforts start in Europe, where we will extend our leadership position with our “Winning in Europe” program to drive both top- and bottom-line growth for the coming years. In North America, our goal is to significantly increase both market share and profitability within the next three to five years. In Asia, we are striving to become the market leader with top positions in the region's major markets. In Latin America, we expect to continue to deliver the strong growth seen during 2004.

Achieving Excellence in Execution

Great products and marketing are vital to success in our industry, but sales growth also depends on consistent on-time retail delivery, ensuring best quality and the ability to go the extra mile for the customer. We are particularly focused on shortening and streamlining our global supply chain, ensuring best-practice social and environmental standards and improving our customer service efforts.

Focusing on Financial Health

Outstanding performance is required of a leader and we know that top- and bottom-line growth is critical to success. But we also believe that other performance indicators are crucial, in particular operating margin. We intend to achieve an operating margin of 10% by 2006 and believe we can be among the leaders in the industry in this area over the next three to five years. In addition, tight management of working capital and generating significant free cash flow will continue to be important for us going forward. At the same time, we remain committed to increasing returns to our shareholders, as reflected in our new share buyback program and higher dividend.