How Adidas Became a Billion-Dollar Brand (And What Entrepreneurs Can Learn)

Hey there,

Imagine this: It’s the final match of the FIFA World Cup. The crowd is roaring, the pressure is insane, and a player steps up to take the winning penalty. What’s on his feet? Adidas shoes.

For decades, Adidas has dominated the sportswear industry, standing toe-to-toe with Nike and continuously reinventing itself. But have you ever wondered how Adidas makes money? How it started? What makes it so powerful?

Well, today, we’re diving deep into Adidas’ journey, its business model, marketing strategies, and the lessons entrepreneurs can steal from its playbook.

Let’s go!

1. The Humble Beginnings: A Shoe Factory in a Small German Town

Rewind to 1924 in a small town in Germany called Herzogenaurach (try saying that five times fast). A young shoemaker named Adolf Dassler (“Adi” for short) started making sports shoes in his mother’s laundry room.

His brother, Rudolf Dassler, joined him, and together they founded Dassler Brothers Shoe Factory. Their shoes were revolutionary for the time—lightweight, with special spikes for better grip.

Fast forward to 1936, and their shoes gained global fame when Jesse Owens wore them in the Berlin Olympics and won four gold medals. That moment put the Dassler brothers on the map.

But then, the brothers had a massive fallout. They split, and in 1949, Adi Dassler created his own brand: Adidas (a combination of his first and last name: Adi-Das). His brother, Rudolf, went on to create Puma.

And just like that, a legendary sportswear rivalry was born.

2. How Adidas Became a Global Giant

Adidas wasn’t just another shoe company. It was a brand built for athletes, champions, and game-changers.

Here’s how Adidas skyrocketed to success:

A. Innovation in Sportswear

Adi Dassler believed that better shoes meant better performance. He worked closely with athletes to create customized footwear that enhanced speed, agility, and comfort.

One of his greatest innovations? The screw-in studs for football boots (introduced in the 1954 FIFA World Cup). It gave the German team an edge, helping them win the final against Hungary. That single moment made Adidas famous worldwide.

B. Expanding Beyond Shoes

By the 1960s, Adidas wasn’t just about shoes—it started making sports apparel and equipment.

• 1970: Adidas became the official supplier of FIFA World Cup footballs.

• 1980s: Adidas signed basketball superstar Kareem Abdul-Jabbar, stepping into the US market.

• 1990s: Adidas acquired Reebok, expanding its reach even further.

Today, Adidas isn’t just a shoe brand—it’s a sports culture icon.

3. How Adidas Makes Money: The Business Model

Adidas generates billions of dollars every year. But how exactly does it make money?

A. Footwear Sales (The Cash Cow)

Shoes are Adidas’ bread and butter, making up 50%+ of its total revenue.

• From running shoes to football boots, Adidas dominates multiple sports categories.

• Limited-edition releases (like Yeezys and collaborations with designers) create massive demand.

• Sneakerheads line up for hours just to buy new releases.

B. Apparel & Accessories

Beyond shoes, Adidas sells:

• Jerseys, tracksuits, t-shirts, and hoodies (worn by everyone from athletes to fashion influencers).

• Bags, socks, caps, and watches under the Adidas brand.

C. Sponsorships & Licensing

Adidas pays athletes, teams, and leagues to wear its products. In return, Adidas gets massive brand exposure.

• FIFA, NBA, Olympics → Adidas sponsors these global events.

• Teams like Real Madrid & Manchester United wear Adidas kits.

• Superstars like Lionel Messi & David Beckham have lifetime deals.

D. Collaborations & Limited-Edition Drops

Adidas mastered the hype game by collaborating with celebrities and designers:

• Yeezy by Kanye West → Billion-dollar sneaker empire.

• Adidas x Prada → Luxury meets sportswear.

• Adidas x Star Wars → For sneaker + movie geeks.

These exclusive collabs sell out in minutes, creating scarcity and demand.

4. Adidas’ Marketing Strategies: Why It’s So Powerful

Adidas doesn’t just sell products—it sells a lifestyle.

A. Emotional Branding

Adidas connects with customers through storytelling and emotion. Their tagline “Impossible is Nothing” inspires people to push beyond limits.

B. Social Media Dominance

• Adidas has millions of followers on Instagram, Twitter, and TikTok.

• It partners with influencers and athletes to create viral content.

C. Streetwear & Pop Culture Influence

Adidas smartly positioned itself in street fashion, making its products cool for everyday wear.

• From hip-hop culture (Run DMC) to skateboarding and high fashion, Adidas stays relevant.

D. Sustainability Focus

Adidas is investing heavily in eco-friendly materials and recycled shoes to attract Gen Z and environmentally conscious consumers.

5. Challenges Adidas Faces

Even giants have problems. Here are Adidas’ biggest challenges:

A. Tough Competition (Nike vs. Adidas)

Nike is Adidas’ biggest rival, constantly competing in:

• Sponsorships (Nike has Michael Jordan, Adidas has Messi).

• Technology (Nike Flyknit vs. Adidas Boost).

• Market share (Nike is still bigger in the US).

B. Supply Chain & Production Issues

• Adidas manufactures most of its products in Asia (China, Vietnam, Indonesia).

• Any disruption (like the pandemic) hurts production and profits.

C. Staying Relevant in Fashion Trends

Streetwear trends change fast, and Adidas has to keep innovating to stay fresh.

6. Entrepreneurial Lessons from Adidas

What can you learn from Adidas as an entrepreneur?

A. Build a Strong Brand

Adidas isn’t just about products—it’s about identity and lifestyle. If you’re starting a business, build a brand people emotionally connect with.

B. Adapt & Innovate

Adidas constantly reinvents itself—whether through technology (Boost soles) or collaborations (Yeezy, Prada). Always be open to change.

C. Leverage Partnerships

Adidas partners with athletes, designers, and influencers to boost credibility. Entrepreneurs can collaborate with experts to grow their businesses.

D. Go Beyond Just Selling

Adidas doesn’t just sell shoes—it sells dreams, ambition, and culture. What are you really selling in your business?

Final Thoughts: The Adidas Empire

From a small German shoe workshop to a global sportswear giant, Adidas has built a brand that inspires athletes and entrepreneurs alike.

And while it competes fiercely with Nike, one thing’s for sure: Adidas isn’t going anywhere.

So, what’s your biggest takeaway from Adidas’ story? Reply and let me know!

Thanks for reading

THE BUSINESS BULLETIN TEAM