Case Study: Salomon

Résumé du document

In 1997, the Adidas-Salomon group was formed as a result of the fusion of three brands: Salomon, Adidas and TaylorMade. This group represents 14,000 employees worldwide. The strength behind this association is the global presence of Adidas-Salomon in more than 60 sports, and its distribution of products in 160 countries.

Salomon is an international firm which is implanted in several countries.
However, we can see that this brand is mostly established in Europe. Salomon's sales represent 64% of its turnover in this geographical area.
The second main market for Salomon is North America with only 25% of its sales. This market represents the biggest blackhead of this company. For example, at the end of 2003, the order book of Adidas-Salomon showed a 31 % recession in nominal value with regard to the same period in 2002, and only 18 % was free from the effects of exchange. Indeed, the competitors were more implanted in the US, and were very profitable and mature. Hence, the lone way for Salomon to increase its market share was to stay focused on this market via Adidas. Finally, Asia and South America represent only 11% of Salomon's sales in the world market.

From 1985 to 2002, the turnover of the ski market had witnessed a huge increase from 75 billion euros to 160 billion euros. However in 2002, sales began to be directed downwards.

In this market, there are three different actors who share themselves as a primary component of this market:
Salomon was the primary one, with 492 million euros in 2002 in Winter (684 millions of euros at the end of the year), Rossignol is the second one with 468 million euros (in Winter) and Atomic was the last one and was placed in the third position in the market of the equipment of the winter sports. It recorded a turnover of some 200 million euros , and expects a stagnation of the world market in 5 million units .
The sales of snowboards are not expected to increase (1.7 million units approximately), as it faces some difficulties in the Japanese market, especially after the effects of September 11 attacks that slowed down the American economy.

Salomon and Rossignol aim at being a reference brand in each segment of practice (from Racing to Freestyle. This strategy has been quite successful, thanks to its innovative products. However, as they are not specialized, their image is very broad in the middle segment. We can see that Armada is very small and is highly specialized in Freestyle/Freeride. This is the typical example of a "core brand". Therefore, when a young customer will look for freestyle skis, he will be more confident in buying Armada skis.

Extraits

[...] (They are professionals of the communication/consumption). They are more and more informed, highly critical, ethic oriented, open to the world, more close to products than brands, because are less and less sensitive to advertising. Strengths of the Y Generation This generation is very powerful in North America. Young people are most of the time working along their studies, that's why they have a huge purchasing power. Moreover, due to the immigration, this part of the population is growing. This generation is more powerful than ever in France and in Europe. [...]

[...] These videos are much targeted; each video is targeted in term of practice (Snowboard, ski, freeride, freestyle, etc.) and the buyers are big fans of the sport and practice it regularly. Thus, the impact is excellent for the firm especially if the level of ski is good (viewers want to see new tricks in every new video.). The events are the third key elements of the strategy. The firm can take part in big events (e.g. the X-games) or even creates its own events. [...]

[...] Indeed, the icons are paid by this firm to represent Salomon. They have to vehicle a positive image in order to the future consumers to identify themselves to the firm . Salomon counts on the exceptional quality of their riders to remain the driving force of the discipline. The Salomon's team is very important because it contains 40 riders. Since the beginning of the development of this discipline, Salomon has always pushed for the best riders and brought out new talent. [...]

[...] It is clearly product oriented. The other positive point is the fact that, as the rider is not in movement, we easily see its Rossignol's clothes and boots, which is a better way to present the products than Salomon's. The main drawback is the lack of a website address and the fact that we don't really see the ski in action. The last advert is from Armada Ski[12]. This brand is a core brand, highly specialized in freestyle and benefiting from a very high brand image. [...]

[...] At least, Bonfire and Arc'teryx represent the clothes and footwear pole. Bonfire is a supplier of clothes of snowboard and lifestyle. Thanks to its innovative and specific design it is appreciated by riders young people. This brand is rapidly expanding. Arc'teryx is a specialist in the manufacturing of clothes outdoor and of High Mountain and the equipment of escalation. It is first on the North American market. Growing European brand Salomon is an international firm which is implanted in several countries. [...]