Nike and Adidas Both Compete in the Essay

Nike and Adidas both compete in the athletic apparel and footwear industries. Both companies offer roughly the same lineup of goods, so therefore are good corollaries for one another. Nike is based outside of Portland, Oregon while Adidas is based outside of Erlangen in Bavaria. The industry is worth approximately $126.3 billion worldwide, according to Global Industry Analysts, Inc. (2011). Nike's sales of $19.0 billion indicate that it has an approximate market share of 15%, while Adidas has $11.99 billion in sales, indicating an approximate market share of 9.49%. These are the two leading firms in this fragmented industry. The products for each company include athletic apparel of all types, athletic shoes of all types, some casual clothing and some sporting gear as well, for example soccer balls. Both companies operate in a wide range of sports as well, meaning that both have very diversified product lines.

Neither company does its own manufacturing. Both Nike and Adidas use hundreds if not thousands of suppliers based around the world to produce the products that these companies market. This was actually a source of controversy for Nike, which has had a lot of problems in the past with respect to using suppliers that used child labor, and other such labor transgressions. Nike has adapted to the criticism by focusing on its reputation and by enforcing codes of conduct for its suppliers to ensure that employment standards are met and there is no child labor involved in the production of Nike's various goods.

For Nike, its main strengths are its brand, its financial position, its celebrity endorsements and its corporate culture. Adidas has similar strengths, including corporate reputation, strong brand, strong product lineup, good financial position and strong celebrity endorsements. Competition between these two firms is often based on the differential strength between the two companies and their competitors with respect to these different attributes. Both companies have relatively few weaknesses, as befits market leaders. Nike has had significant image problems in the past and the firm is a lightning rod for anti-poverty activists.

According to its 2010 Form 10-K, Nike uses the FIFO method of inventory valuation (p.61). According to its 2010 Annual Report, Adidas uses the average cost method of inventory valuation (p.191). FIFO refers to "first in first out" which counts the value of inventory remaining that was the last to be added to inventory. The average cost method averages out the cost of all the inventory still in storage, to determine the book value of that inventory.

With respect to working for these companies, there are a number of considerations that must be taken into account. Working for either company would be appealing. I feel that they both have excellent corporate cultures and both companies are oriented towards winning and excellence. Both companies have a relatively informal corporate culture that is attractive. I feel that Oregon is a great place to live, but so is Franconia, so there is little to choose from there. There good career options for each, and they both operate with the English language, something that is helpful. It is difficult to choose between them. It should be noted that career and lifestyle are the most important factors because neither company is in any…