Adidas Case

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Adidas Case

1. To evaluate the competitive environment in which adidas launched the “mi adidas” pilot I will use the five competitive forces model.

|Competitive Force |IT Influence on Competitive Force | |Threat of New Entrants |LOW - The main brands in the market (Nike, New Balance, and Adidas) have already | | |launched their respective MC programs with Reebok just offering customization for| | |running shoes. Additionally, two other brands that adopted a MC initiative have | | |closed operations; even-though entered the market. | |Bargaining Power of Buyers |HIGH – It’s easy to switch to other providers. As such, the buyer has the power | | |to bargain for lower prices, better product, more customization, or any other | | |characteristic; if not he is able to switch to another brand. | |Bargaining Power of Suppliers |LOW – Adidas has the power to choose the supplier they are buying from and choose| | |the country in which they want to produce the product. | |Threat of Substitute Products |HIGH – The consumer can choose if he wants to use a MC shoe, but if not is | | |willing to choose a normal shoe. Additionally several competitors offered a | | |similar service. | |Industrial Competitors |HIGH – There is a lot of brands that make shoes. Reaching economies of scale, | | |advertisement costs, and other barriers make it expensive to enter/leave the | | |industry. |

2. The “mi adidas” pilot was:

a) Competitive strategy would be enhanced by differentiating from the product of competitors. Additionally, adidias will be seen as the leader in the shoes industry. There are other value added propositions as the exposure due to PR and the bond that the program will create with retailers.

b) This approach presented several advantages as the 100% customer satisfaction creating brand loyalty, differentiating product from competitors, and increase exposure in the media. I would have created a higher marketing buzz around the events and would have included retail businessmen into the process to start getting their feedback.

c) It was a success because adidas was able to offer a customized product, viewed that there was a demand for customized products, and got 100% satisfaction fulfilling customers’ expectations. Additionally, it allowed the project team to gather experience in marketing, information management, production, distribution, and after service of customized shoes. Finally it provided basis to make cost-benefits analysis to see how budgeting and costs should work in the future.

3. The company encountered several challenges in Phase II when management decided to increase the scale of “mi adidas” by offering mass customization via retail challenges, such as:

• A new, smaller retail unit had to be created to make it easier to transport, be more durable, and make it user-friendly.

• There was too much interest from retailers, so only few had to be chosen based on different parameters: marketing preferred small athletics specialty shops; however, sales favored big key accounts....
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