How are MNCs doing the industry chain integration?

Adidas is the world-famous brand, has 60 years of history. Adidas global strategy is to reduce costs and open the Asian market.

Adidas has been outsourced more than 95% of production to independent third-party plants. Of its 1070-generation plants located in 67 countries around the world, mostly are concentrated in China, India, Indonesia, Thailand, Turkey and Vietnam 6 countries. Adidas is currently in China on behalf of the 264 plants, involving total number of employees up to 30 million people. Adidas in 2007 in the Chinese market purchased 201 million pairs of shoes, accounting for 49% of the total global sourcing; 252 million sets of garments, accounting for 32% of the total; 39 million sets of components, accounting for 65% of the total.

The first three quarters of 2008, Adidas global sales revenues of 8.225 billion Euros, an increase of 4%. Among them, the European sales of 3.776 billion Euros, up 9%; North America, sales of 1.871 billion Euros, down 17%; In the meantime, Asia and Latin America sales grew by 16% and 34%, reaching 1.875 billion Euros and 647 million Euros. Asia has surpassed North America as the second largest market for Adidas.

This is the Asian market for year’s growth. According to statistics, over the past 10 years, Adidas sales in Asia, with an average annual rate of nearly 20% increase in the proportion of total global sales in 1998 from 8% to 22% in 2007, until this year in one fell swoop over the North American market share. On the contrary, the North American market since 2000, there have been many sales decline, especially since the first quarter of this year, several times fell more than 15%.