KUNAL JAGGA /

201337916
ADRIANA
FERRER/201337399

Contribution
sheet
Name

Contribution

Cacatte,
Mukthi

SWOT, competitive
advantage, conclusions,
recommendations

Ozturk, Berk

Background, scope, industry

analysis, Porter

Socias, Luis

Strategy, goals,
organization, internal &
external logic

Signature

Strategic indentification exercise: NIKE

Background
Adidas AG is a German multinational corporation that designs
and manufactures sports shoes, clothing and accessories based in
Herzogenaurach, Bavaria, Germany. It is the holding company for
the Adidas Group, which consists of the Reebok sportswear
company. Besides sports footwear, Adidas also produces other
products such as bags, shirts, watches, eyewear, and other sportsand clothing-related goods. Adidas is the largest sportswear
manufacturer in Europe and the second biggest in the world, after
Nike.[3]

Founded: 1924 as Blue Ribbon Sports

- Renamed in 1978 as Nike Inc.

Founders: ADOLF DASSLER; CEO: Herbert Hainer

Revenue: 14.49 Billion Euro

Net Operating Income: US$ 1.202 Billion (2013)

HQ: Herzogenaurach,Germany
Strategic indentification exercise: Adidas

Net Profit

Strategic indentification exercise:Adidas

Scope of the firm

Brands

Adidas
Reebok
TaylorMade
(Golf)
Rockport

Subsidaries

Adidas Korea
Reebok
Adidas America

Products

Footwear,
Apparels
and
Accessori
es

Strategic indentification exercise:Adidas

Scope of the firm

Target
Customers

13-40 Male/Female,targeted mostly young

people.People involved in any given discipline or
sport.

Apparel is fashionable & footwear by shaping

high technology and has designers to serve
ValueProduc
ts
qualified sports products to customer.

Activities

It serves Malls, Retail stores, Partnered stores,

Outlets, Online stores.

Strategic indentification exercise:Adidas

Industry analysis
Major Players
Nike,Puma and K-Swiss are positioned as the key players
in the global athletic sports wear market.
Characteristics of Market
Some barriers to entry
High sunk cost ( Factory, other investments)
Too much brand loyalty and brand awareness based
business
Intense rivalry and competition
Size of the Market
Highest market share of 38% in Football Market

Strategic indentification exercise:Adidas

Industry analysis
Size of the Market Share

Strategic indentification exercise: NIKE

Porters five
forces
Lo
w
Lo
w

Hig
h

d
i
M
h
g
i
H

Lo
w
Strategic indentification exercise: Adidas

Porters five
forces Low

Threat of Entry-exogenous

There are entry barriers, companies need to invest in

R&D, innovation and design structure, unique positioining
in the market (exogenous).
Customer loyalty to existing brands, creating brand
equity and strong brand awareness.
Too
much
effort
requirements.

product

proliferation,

Capital

There should be: Economies of scale,

differentation, access the distribution channels

product

Strategic indentification exercise: Adidas

Porters five
forces Low

Threat of Substitutes

Buyer propensity to substitute is important and relative

price performance of substitute based on the
competitors design and innovation strategies.
Number of substitute products available in the market
BUT price, design and quality are biggest questions for
substitution!!

Strategic indentification exercise: Adidas

Power of Buyers

Porters five
forces Mid

Product portfolio is wide

non- sensitive, enables
existing products.

ig
H
to include price sensitive and
h
degree of dependency upon

Availability of existing substitute products Nike, Puma

and Asics is always option
Firms like Adidas, can implement loyalty programs to
reduce the buyer power.

Strategic indentification exercise: Adidas

Power of Supplier

Porters five
forces Low

Adidas believes that diversity is a must... Supplier

Diversity can have a favorable impact on our
business

Creating more competition in the supply chain to live

up new businesses in the supplier market.
Raw materials are leather, rubber, cushioning, canvas
and coton in abundance. Ability to bargain when
selling high volumes.
Strategic indentification exercise: Adidas

Porters five
forces
Hig
Competitive Rivalry
h

There is strong competition between Adidas and Nike

to get more sponsorship, share and brand loyalty.
Main idea is to try to sustaincompetitive advantage
through innovation, eg.different concepts each season
eg: online selling decrease the opt. costs
Advertisement and sponsorship expenses are a major
component.

Strategic indentification exercise: Adidas

Porters
conclusion
Out of Porters Five forces, the one that has the
biggest impact is Industry Rivalry. Intense competition
on quality/technology, competitive price, marketing
capability, celebrity endorsement, distribution and
manufacturing.
Keeping the power of buyer is low, sportwear industry
is in the maturity stage, to sustain its competitive
advantage and to always be first choice of customers,
Adidas needs to be innovative with high quality
products.

Strategic indentification exercise: Adidas

Strategy - Goals
Slogan #1

Impossible is nothing
Slogan #2

Adidas is all in

Strategic indentification exercise: Adidas

Strategy - Goals
Make
today
better

Designin
g the
future

Continuous improvement: our personal

best. Manage our impacts not only in our
own business but in its reach across our
value chain.

Innovation as an engine. It has the ability

to make the status quo obsolete.
Creativity, patience and high tolerance for
failure.
We need scalable system change to
transform our business, the industry and
markets.

Strategic indentification exercise: NIKE

Strategy - Goals
We must succeed in a
world where natural
and human resources
are constrained

Consumers demand new

services, creation of new,
digital solutions and to
customize products more
quickly than ever before.

To be the leaders, we have

to deliver innovative new
products and experiences
in a more sustainable way
Sustaina
Recognizing that
b ili
ty
sustainability is a
route to future
profitability
Strategic indentification exercise: NIKE

Strategy Organization
Vertical disintegration
Nike is a vertically disintegrated or specialized firm
that focuses its efforts into an innovative focus in
designing and marketing their athletic textiles and
brand.
They closed the manufacturing processes, but
maintained the hierarchical governance within the
remaining domain of the firm.

Strategic indentification exercise: Adidas

External logic
We live in a world in natural risk: global change, limited
resources
Adidas focuses its strategy on sustainability

Innovation plays a very important role for

being the leader: new products, being near to
the customer
IT to be quickly conected to the customers:
web, online store, social networks
Society is aware of human rights problems
The firm has been accused of child exploitation
and abuse in developing countries
Strategic indentification exercise:Adidas

Internal logic
Cut energy

Support
communitie
s

Reduce
waste

Empower
workers
Make
today
better

Reject toxics

Strategic indentification exercise: Adida

Internal logic
Unleash
innovation

The way we
work

People and
culture

Revolutioniz
e product
Desingi
ng the
future

Transform
manufacturi
ng

Strategic indentification exercise: Adidas

STRENGTHS:

SWOT analysis

BRAND EQUITY
HIGH PRODUCT QUALITY
AND INNOVATION
PRODUCT
DIFFERENTIATION
HIGHLY EFFECTIVE
MARKETING STRATEGY
LOW COSTS OF
PRODUCTION
HIGH LEVELS OF
CUSTOMER
SATISFACTION
STRONG FINANCIALS

OPPORTUNITIE
S:

GROWING FITNESS
CONSCIOUSNESS

WOMEN TAKING MORE

INTO SPORTS AND
SPORTS RELATED
ACTIVITIES

MARKET FOR STYLISH

SPORTSWEAR

GROWING POPULARITY
OF SPORTING EVENTS
WORLDWIDE

WEAKNESS:

HIGHLY COMPETITIVE
PRICING

LIFE CYCLE STAGE

CONTROL OVER
PRODUCTION

Adidas
THREATS:

INCREASED
COMPETITION FROM
LOCAL AND NICHE
PLAYERS

COUNTERFEIT
PRODUCTS

Strategic indentification exercise: Adidas

Resources:
-Brand Equity
-Customer
Loyalty
-Patented
Products
-R & D and
Innovation

Distinctive
Competencies

Competitive
Advantage

Differentiation
Advantage:
Superior Products

Superior
Value
for the
custome
r

Capabilities:
-Contract
manufacturing
-Efficient
manufacturing
cycle
-Low cost of
production

Strategic indentification exercise: Adidas

Conclusions

Adidas is one of the most valuable brand among sportswear

Businesses.

Adidas along with Nike are the largest producers of athletic

footwear and apparel

Adidas enjoys positional based advantages in the football

market

Adidas responds to trends and customer preferences by

developing new products and reviving up existing product
offering.

Adidas influences sports and fitness preferences through

aggressive marketing (Messi & Beckham).
Strategic indentification exercise: Adidas

Recommendations

Nike will have to continue its aggressive marketing,

develop new products, styles and categories using latest
technologies, (eg: Nano) control costs and inorganically grow
in order to sustain its dominance in the industry and
stay competitive.

Nike has to continue its strong online presence and

develop their retail presence.

Nike can sponsor more social events and improve its brand
image.

Strategic indentification exercise: Adidas

Bibliography

http://www.nikebiz.com/crreport/content/strategy/2-1-1-corporate
responsibility-strategy-overview.php?cat=cr-strategy

http://www.businessinsider.com/is-nikes-hero-athlete-strategy-injeopardy-2013-2

http://sneakernews.com/2010/05/06/nike-introduces-2015-globalgrowth-strategy/

http://www.siegelgale.com/blog/nike-and-adidas-different-strategiesfor-telling-their-brand-stories/

http://www.reliableplant.com/Read/22389/Nike-sustainable-businessstrategy

http://brainmass.com/business/business-analysis/326105

Strategic indentification exercise: NIKE

Thank you

London, July 2013

Strategic indentification exercise: NIKE