While there are many battles occurring on the field at the 2006 World Cup, the largest and perhaps most significant fight is raging off the field, between Adidas AG and Nike Inc. The two sporting goods giants are battling for global supremacy in the soccer category with two distinct and different brand marketing campaigns. Nike is focusing on sponsoring great teams and players while Adidas does the same but also focuses on larger stages within the sport to market itself to tournaments and leagues. Adidas has been the undisputed leader in the soccer market for many years but its market leadership is under attack by Nike with both sides claiming superiority.

 

While this fight over soccer supremacy rages during the World Cup and will continue on afterwards, Adidas and Nike are also battling each other for the right to be named the global leader in sporting goods, which Nike currently holds based on annual sales (Nike .7 billion, Adidas billion). As Nike tries to gain ground in soccer, Adidas is rising in the sporting goods industry and the battle at the World Cup is a good example of two successful companies with differing strategies. On one side is European-based Adidas, which has been around since the 1940's and is in the European mold of being both quietly successful and trendy chic. On the other side is American-based Nike, with its youthful exuberance and the American bravado of wanting to be the best in the world.

 

Adidas
Adidas and its famous three stripe logo were officially introduced and trademarked in 1948 and 1949. Adidas, named using the beginnings of founder Adi Dassler's first and last name, was founded and remains headquartered in Germany and has always had an old-school European feel to its company and its products. There was always a focus on producing technologically sound and innovative sporting goods products that continues today even as the company has expanded its products and brand as a lifestyle and not merely sporting goods.

 

Adidas has recently grown through its acquisition of Reebok International Limited in 2006 boosting Adidas' revenues from billion to billion. This acquisition has helped Adidas close the gap on Nike in overall sporting goods sales while still claiming to maintain its supremacy in soccer.

 

Adidas has been the worldwide leader in the soccer category for many years and is striving to maintain that elite status while fending off Nike. As an official partner of FIFA and sponsor of the World Cup, Adidas enjoys exclusive marketing and advertising rights in connection to the world's most watched sporting event. This is a tremendous advantage for Adidas during the World Cup that must provide a boost in order for Adidas to remain the clear leader in the global soccer market.

 

Adidas's main advantage over Nike is its exclusive rights agreement for the World Cup. In 2005, Adidas extended its official sponsorship of the World Cup with FIFA through the 2014 tournament for 0 million, extending its opportunity to be the exclusive sporting goods company associated with the World Cup. In this year's tournament, Adidas will have its new prototype ball in use for the entire tournament, its logo on referee uniforms, advertisements around the pitch, advertisements on the official website, and advertising inside and outside of tournament stadiums. This exclusivity will allow the Adidas brand to be seen over and over by the billions of viewers who will tune into the game.

 

Adidas is also the official sponsor of twenty-one national teams including the following six teams that made the 2006 World Cup: Argentina, France, Germany, Japan, Spain, and Trinidad & Tobago. This is a lesser amount of teams represented than by Nike because several teams that Adidas hoped would qualify for the tournament failed to. Adidas also has other sponsorship agreements that are noteworthy, such as its agreement with FC Chelsea of the English Premier League, German star Michael Ballack, English star David Beckham, Argentina's Juan Roman Riquelme, and the American soccer league, MLS. Adidas views the ten year 0 million sponsorship agreement with MLS as integral to penetrating the growing North American soccer market.

 

Adidas also attempts to separate itself from Nike through its history of being on the cutting edge of sporting technology. Adidas spends vast amounts of time and money to research and develop the most technological advanced equipment for the game of soccer. For example, the new ball used in the 2006 World Cup has been developed over three years and is claimed to be "the roundest soccer ball ever" due to its fourteen panel configuration, when all previous balls had thirty-two panels. Adidas is also marketing its new advanced cleats that are fully customizable for customers. Being on the forefront of technology was a competitive edge of Adidas in the past but seems to be challenged as Nike closes ground in soccer sporting goods market share. Recent research has shown that Adidas currently has 38% of the soccer footwear market, which keeps them slightly ahead of Nike, with 31%.

 

Nike
Nike and the globally recognized swoosh symbol have been around since 1973 and is headquartered in Beaverton, Oregon. Nike is a fairly new company, relative to Adidas' sixty year history, but has extended its reach around the entire globe in its short existence. Its sporting good products bring in annual sales of approximately .7 billion and Nike is hoping its refocused attempt to be the worldwide leader in the soccer market will increase its lead over its nearest competitor, Adidas.

 

Nike has always had a different approach to its business that comes off uniquely American. Nike focuses on lifestyle marketing, which combines sporting goods and everyday life to make its products useful off the field in addition to on the field. This was hugely successful with basketball sneakers, which became fashionable for all to wear and followed the latest trends. This philosophy did not transcend so well into soccer though as soccer cleats could not be worn off the field. So Nike needs to adjust its focus and strategy if it wants to seriously challenge in the soccer market.

 

Nike has been a global leader in the sporting goods market for a long time but has never led in the soccer market, largely due to philosophical differences within the company on whether to pursue the soccer segment of the sporting goods market. The 1994 World Cup in America changed Nike's view as it looked to expand internationally and saw that opportunity with the world's largest sporting event taking place in America. Nike's re-launch into the soccer market was necessary according to the president of the Nike brand, Charles Denson, "If we were going to be the worlds biggest and best sports brand then we had to be No.1 in soccer."

 

Nike set out to take over the market in a traditional Nike manner that has proven successful in the past, by sponsoring the best teams and superstar athletes in that particular sport. Nike showed that it meant business when, in 1996, it pulled off a major coup in the soccer world, agreeing to a ten year 0 million sponsorship deal with the Brazilian national team, one of the greatest and most followed teams in the world. This agreement was recently extended through 2018 for an estimated 4 million. Nike continued its effort of signing top national teams and currently sponsors a total of fourteen national teams that includes eight playing in the 2006 World Cup: Australia, Brazil, Croatia, South Korea, Mexico, Netherlands, Portugal, and the United States. At the club team level, Nike sponsors famous teams such as Arsenal of England, Barcelona of Spain, and Juventus of Italy who are all top level teams in their respective leagues.

 

Nike also reached individual sponsorship agreements with some of soccer's greatest stars that it built elaborate marketing campaigns around, similar to the formula it used in making Michael Jordan a household name the world over. Three big name stars that Nike currently has under contract are Ronaldo, Ronaldinho, and Wayne Rooney. Ronaldo is a Brazilian player who has been named FIFA world player of the year three times and is viewed as one of the greatest players to play the game. Ronaldinho, who is also Brazilian, has been named FIFA world player of the year for the past two years. Englishman Wayne Rooney is a promising young star who is a fan favorite in England and is constantly in the news for both on field achievements and off the field incidents.

 

Through its sponsorship of famous teams and elite players, Nike has become a major player in the global soccer market. However, Nike may be gambling with its approach of only sponsoring teams and players, in contrast to Adidas sponsoring teams, players, leagues, and being an official partner of FIFA for the World Cup and other tournaments. As long as the teams and players that Nike has agreements with do well at the World Cup, Nike will continue to be seen and run its "joga bonito" campaign, which means "play beautiful" in Brazil's native language of Portuguese, in conjunction with the tournament. If teams falter or a player is injured, as almost was the case when Wayne Rooney broke a bone in his foot before the tournament, Nike's marketing plan may not work as well as hoped.

 

Ultimate Winner
The ultimate winner in this battle will not be decided by the end of this year's World Cup or probably in the near future. Both companies are predicting soccer-related sales of approximately .5 billion this year, an increase of thirty percent from the previous year for Adidas and more than double what Nike brought in during 2002. The World Cup has helped increase sales this year and the real test for each company is who will continue to grow each year and take the lead in lucrative emerging markets like China and India.

 

The Adidas brand and the Nike brand are strong brands that are recognized around the world and the fight for world dominance will continue as Nike pulls closer to Adidas in the soccer market and Adidas pulls closer to Nike overall. As more technically advanced and innovative products are developed by each company and efforts are made to gain a greater market share, the true winners in this competition between the two mega-brands will be the consumer.