Polar Adidas Joint Venture

1. The alliance with adidas will be an excellent opportunity for growth at Polar. It seems that Polar’s growth potential is somewhat unlimited as they can target new market segments outside their niche and move into many new markets. However, their resources are limited, so the partnership with adidas will be a critical aspect of future growth. Adidas will bring Polar to their many flagship stores around the globe. Also, Polar can ride along into adidas’s vast distribution network. Lastly, the international name recognition of adidas will help Polar to gain more notoriety and perhaps help them reach outside of their core group of athletes to the larger group of everyday fitness enthusiasts.

2. Pros:
 Polar name recognition and visibility will increase with sales in the adidas stores and the adidas distribution network
 Complementary products can increase sales of both adidas and Polar equipment
i. For example, if a customer chooses to buy a pair of adidas shoes that can hold the Polar Stride Sensor, the customer will be more likely to buy the Polar Heart Rate Monitor to complement the shoes
 Cross marketing opportunities allow the companies to work together to advertise their products -- this can reduce marketing costs for both and attract past adidas customers to try a Polar product (and vice versa)
 Loyal Polar customers have the option to buy clothing and accessories to complement and increase the functionality of their HRMs
i. Partnership allows Polar to offer these items to their customers without having to independently make the investment into apparel
Cons:
 A much smaller partner like Polar could be dominated by adidas in partnership agreement issues
i. Who owns the intellectual property rights to jointly-developed products? ii. Can technology or ideas be offered to other companies outside the agreement? Adidas could try to team up with an industry leader like Apple’s iPod to make