Adidas Report

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  • Topic: Reebok, Adidas, UEFA Euro 2012
  • Pages : 9 (1907 words )
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  • Published : October 29, 2012
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adidas did Strategic Analysis Strategic Analysis 2011 ‐ 2016 David Bajak MET AD 711 Leadership and Strategy December 18, 2010

What business are we in? What business are we in?
• Currently l
– Athletic Performance Enhancing Footwear,  Apparel & Equipment (80%) – Athletic Fashion Styled Footwear, Apparel &  Equipment (20%) 

• Recommend
– Design – Marketing – Retail Distribution

Competitive Forces Affecting adidas Competitive Forces Affecting adidas • Five Forces Model of Competition Five‐Forces Model of Competition – High Rivalry among Competitors
• Intense rivalry between adidas (21%) & Nike (36%) for market share • Powerful competitive strategies used by market leaders Powerful competitive strategies used by market leaders

– Low Threat of New Entrants
• Strong brand preferences and customer loyalty • Market leaders benefit from significant economies of scale • Diffi lt f Difficult for new entrants to establish distributor/retailer networks t t t t bli h di t ib t / t il t k

– High Threat of Substitute Products
• Substitutes are readily available and attractively priced • Low Switching Costs g

– Low Supplier Power
• Materials supplied are commodities • Manufacturing is outsourced to low cost producers

– Hi h B High Buyer Power P
• • • • Buyers benefit from intense rivalry for market share Low switching costs for buyers Buyers have discretion in purchasing products Buyers are well informed on purchased products due to intense marketing

Our Impact from Globalization Our Impact from Globalization • Heavy competition continues to develop in  emerging markets between adidas and Nike  g g for worldwide market leadership • Production activities are migrating to Production activities are migrating to  countries where costs are lowest • Growing global consumer demand • Reduced trade barriers and government Reduced trade barriers and government  cooperation for production

Forces Driving Change in Industry Forces Driving Change in Industry • Ch Changes in long term industry growth rates in emerging markets  i l t i d t th t i i k t due to high demand • Increasing globalization as a result of intense rivalry • Aggressive product innovation averaging one major product  innovation annually in each product category of each brand y y q • Reduced costs and increased efficiency achieved by acquisition of  diversified companies • Consumers demand differentiation in products as well as  customization • Emerging markets in developing nations undergoing changing  societal concerns, attitudes, and lifestyles New internet applications allow consumers ability for customization  • New internet applications allow consumers ability for customization in online stores • Successful marketing, technological and product innovation • I Impact of driving forces increase industry profitability t fd i i f i i d t fit bilit

High 

adidas Strategic Group Map adidas Strategic Group Map
Nike

P Price/Performance/ /Reputatio on

adidas

Timberland PUMA K‐SWISS

Lo ow

Low

Models

High

adidas Key Success Factors adidas Key Success Factors
• A well‐known and well‐respected brand name • Clever advertising Clever advertising • Strong direct sales capabilities via the internet  and company‐owned retail outlets, etc d d il l • Ability to secure favorable display space on  y p y p retailer shelves • E Expertise in sports technology ti i t t h l • Innovate or die

adidas SWOT Analysis adidas SWOT Analysis
• Strengths
– Leveraging strong brand portfolio to establish a robust retail footprint – Record levels of cash from operations and significantly improved financial position amidst a  weak economic backdrop – S Strong performance driven by the success of 2010 FIFA World Cup f di b h f 2010 FIFA W ld C – Wide geographical footprint with increasing focus on emerging markets

• •

Weaknesses
– Weak performance in China impacted by excess inventories p p y – Dependence on third party manufacturing...
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