Market Analysis Report by A. Walton

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A Market Analysis for
Yeezy
Aretha Walton
Full Sail University
Project & Portfolio II: Business and Marketing
27 October 2019

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EXECUTIVE SUMMARY
This is a market analysis report for Yeezy, a subsidiary brand of Adidas that has
experienced an abundance of success. This report examines the current product line and financial
status in its competitive market. A review of some financial data regarding Adidas, the parent
company’s, financial data is included for a well-rounded picture of financial positioning. Along
with the overall strengths and weaknesses to provide recommendations for product expansion
within the next five years.

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Figure 1: Adidas Yeezy Boost 700 Inertia
OBJECTIVE
The objective of this report is to convince Yeezy to produce a new product and connect
with unexplored target markets to keep the brand relevant in the athletic wear industry.

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RESEARCH METHODOLOGY
The information utilized in the creation of this report was
gathered using external, secondary sources from internet searches
and online databases gathered in October 2019. All Adidas
financial data was accurate, and current when sourced from these
varied platforms.
Figure 2: Yeezy Boost 500

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Figure 3: Yeezy Logo
RESEARCH AND KEY FINDINGS
Yeezy is a sportswear collection owned by Adidas as a result of
the collaboration with recording artist Kanye West (Business Insider,
2019). They are ranked number two in the sports apparel industry. It’s
parent company Adidas is a global company founded in 1949 by Adolf
Dassler. Currently, the CEO is Kasper Rorsted. Each year the
production of more than 900 million sports lifestyle products is
produced in collaboration with independent partners. (Adidas, 2018)
Yeezy sneakers are considered one of the most influential sneaker brands
on the market to date (Sneaker.com, 2019).
Kanye West had a desire to release a unique collection of revolutionary sneakers, to
attract sneaker lovers around the world. West previously designed a shoe with Adidas in 2004
that was never released to the public. Following his desire, he has also collaborated on designs
Figure 4: Kanye West
(recording artist Yeezy Collab.)

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with other prominent shoe designers such as Nike, Louis Vuitton, and Giuseppe Zanotti with
unmeasurable results. However, Yeezy has developed a cult-like following that has resulted in a
rise in Adidas’ fourth-quarter earnings of 3.5 percent to 5.23 billion euros ($5.91 billion) and
profits increased 29% to 93 million euros. October 2019’s Net income was 1,929.00 billion euros
an increase of 11.66%. (Yahoo! Finance, 2019) According to Adidas' profit and loss, the Debt to
Assets Ratio as of October 2019 is moderately high at 65.71%. (Adidas, 2019). In 2018 the
brands Dow stock performance increases .33% ranking third best in the industry. The notoriety it
has established is largely due to the boost technology that consists of thermoplastic polyurethane
material that provides comfort and durability to the fit. (Patos, 2017).
The areas of weakness include their affordability, the average pair of Yeezy brand
sneakers cost $350.00 USD. With this price tag, only a limited number of consumers can afford
to purchase a pair. Association with the recording artist Kanye West, and the lack of variety in
the current line creates a disadvantage in reaching some consumers. Even though these factors
exist the premium price and limited stock created a buzz allowing the brand to sell out in record
time. The majority of Yeezy production takes place in third world countries where labor cost is
much lower, making the cost to manufacture a pair approximately
$76.00 (Amaded, 2019). The brand is streamlined with a simple design that appeals to a sizable
amount of its target consumers. Some brands perform best when offering fewer choice options,
but the world of fashion-conscious consumer's individualism is not offered. The lack of color in
the shoe makes them less appealing to some.
Currently, Yeezy has a target market that consists of middle to upper-class
consumers located in Asia, North America, and Europe. They are predominantly males between
the age of 16 and 40 who are fashion conscious that are interested in style and comfort. On
average they use the product moderately after purchase.

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An issue Yeezy constantly must address is design copying and infringement of their
patent. Because of the elevated price and limited production of produce counterfeit replicas can
be found via the internet and other channels (O’Hara, 2008). This has cost the company large
amounts of lost revenue and constant legal procedures

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CONCLUSIONS
Yeezy is performing well against its competition showing substantial growth since 2016.
The brand's financial performance is rising due to clever production and marketing techniques.
Limiting the production of their product and heavy promotion takes full advantage of the rule of
supply and demand. An additional factor that further boost sales is the celebrity association
Kanye West provides, often fashion labels accelerate in growth because of these types of
collaborations. Even though West’s celebrity essence has helped sale it has been a hindrance in
the past. After the brand partner publicly voiced political and social views many consumers
chose to abandon the brand temporarily. Competition with sportswear brand Nike is constant;
leaving Adidas/Yeezy in 2nd place position within its market segment.
RECOMMENDATIONS
My recommendations include broadening the product line by gathering data from
existing market reviews and designing a line with more variety. This will move the brand
forward to gain more momentum and increase profits. An intense focus should be paid on the US
footwear market since they represent 40% of all sportswear sales. Athletic shoes are marketed
towards men and women between the ages 16 to 40 years old, with large amounts of spendable
income. Heavy marketing with the channels this demographic frequents will keep them as
clients. The expansion of products should include the current shoe line accompanied by an
additional line within the next five years.
Additionally, developing a communication mixed marketing strategy where a combination of
advertising, personal selling, direct marketing, sales promotion, and public relations should be

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implemented. This combination has proven effective for Nike Inc. in promoting products and
strengthening its brand image (Gregory, 2018).

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REFERENCES
ADDYY: adidas AG ADR Quarterly Balance Sheet. (n.d.). Retrieved October 24, 2019, from
https://www.marketwatch.com/investing/stock/addyy/financials/balance-sheet/quarter.
Adidas Yeezy Boost 700 "Inertia" - EG7597 - 2019. (n.d.). Retrieved October 23, 2019, from
https://www.stadiumgoods.com/adidas-yeezy-boost-700-inertia-eg7597.
Gregory, L. (2018, August 21). Nike's Promotional Mix (Marketing Communications Mix).
Retrieved October 24, 2019, from http://panmore.com/nike-marketing-communications-mix.
Hanbury, M. (2018, April 26). Kanye West's secret to building a footwear empire to compete
with Nike. Retrieved October 24, 2019, from https://www.businessinsider.com/how-
kanye-west-made-yeezy-brand-a-success-2018-4.
Mitchell, J. (2015, December 3). Yeezy Season: Kanye West And The Art Of Design Thinking.
Retrieved October 24, 2019, from
https://www.forbes.com/sites/julianmitchell/2015/11/30/kanye-west-and-the-art-of-
design-thinking/#22f8f2027c50.
O'Hara, E. (2008, October). striped suits. Retrieved October 24, 2019, from
http://web.a.ebscohost.com.oclc.fullsail.edu:81/ehost/detail/detail?vid=29&sid=ed92237e-9c3b-
4901-bf22-
c68137dec7c9@sessionmgr4006&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ==#db=ehh&AN=35517937.

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Patos, R. (2017, February 16). An Exploratory Look at adidas's Revolutionary BOOST
Technology. Retrieved October 24, 2019, from https://hypebeast.com/2017/2/adidas-
boost-technology-explained.
Richard, B. (2017, December 16). How Buying That Expensive Yeezy 500 Bundle Is Paying Off
for Some. Retrieved October 23, 2019, from
https://solecollector.com/news/2017/12/yeezy-500-bundle-blue-tint-yeezy-350-v2.
Sole Collector. (2019, October 18). The Complete Yeezy Price Guide. Retrieved October 24,
2019, from https://solecollector.com/news/yeezy-price-guide/.
Woolf, J. (2017, December 6). Kanye West's New Yeezy 500 Sneaker Is Here. Retrieved
October 24, 2019, from https://www.gq.com/story/kanye-west-yeezy-500-sneaker-how-
to-buy.