To identify the main strategic issues facing Adidas in maintaining their current global competitive position.
To evaluate potential strategic options that Adidas should consider in order to sustain and develop their global competitive positioning.
To discuss the implications of these options for the strategic management decisions of the company. To make appropriate recommendations for the future.
This report sets out the different aspects of strategic management at the Adidas group. Sometimes the two are used interchangeably, but there is a lot of difference between the two. They can partly be distinguished on the basis of different ways of financing them and partly by comparing the sizes of the companies involved. The takeovers and different issues related to it are of very much importance in present times of LPG (Liquidation, Privatisation and Globalisation). The basic fields of concern are the benefits related to M&A, post M&A activities, M&A failures and success, etc. All these concepts have been undertaken in this report. There is also a case study of Adidas and Reebok given at the end for a deeper analysis of the concept. The various aspects of the Adidas and Reebok merger have been clearly explained. Introduction:
Adidas-Salomon is one of the major sports apparel manufacturer. It consists of Reebok Sportswear Company, Taylormade Golf Company, Maxfli Golf and Adidas Golf. It is the second largest sportswear manufacturer of the world after Nike. The company was founded by Adolf (Adi) Dassler in 1948 and is named after him. But the story started way back in 1920 when Dassler and his brother Rudolf Dassler started making shoes Herzogenaurach, near Nuremberg. Rudolf Dassler is also the founder of other sports goods manufacturer company, Puma. The group is actually named as Replica Adidas Shoes.
In order to identify the main strategic issues facing Adidas in maintaining their global competitive position, it will be quite useful to undertake a SWOT analysis of the company. According to Rogoff and Bezos (2007:44), the best way to begin a research on the competitive advantage and competitive position of a company is to do a SWOT analysis of the company which is an acronym standing for strengths, weaknesses, opportunities and threats of the business. SWOT analysis of Adidas will involve the evaluation of its internal as well as external environment. In order to be the market leader and gain more and more profits, Adidas always intends to develop new opportunities which make it highly prone to risks. STRENGTHS· Renowned brands.· Extensive Marketing Infrastructure.· Diversity and Variety.| WEAKNESSES· Underperformance of Reebok.· Channel Conflicts.| OPPORTUNITIES· Growing Demand in Sport Equipment.· Emerging Markets.· Developing Technology. | THREATS· Increased Raw Material Costs.· Competition.· Economic Recession.· Counterfeit Products.|
Following are the key strengths of Adidas Group:
It is one of the major strengths of the company. Adidas group owns brands like Adidas, Reebok, TaylorMade (Adidas Group Website). The strong brand image of Adidas has increased its brand loyalty which in turn has led to increase in profits. It is the brand reputation which has helped Adidas to be the market leader in almost every part of the world. Adidas brands are not only popular in Europe and US but they have also captured most parts of Asia now. According to Shanley, 2006 (Helmsman Online), Adidas emerged as a market leader in Japan in 2005 replacing Nike for the first time. According to a report of Adidas, it is has maintained its top position in Europe till date. Adidas also strengthens the images of its brands by customer satisfaction (Adidas Official).