The aim of this report is to undertake a strategic analysis of Adidas.The Adidas strives to be the global leader in the sports goods industry with brands build on a passion for sports and sporting lifestyle, it sells products in virtually every country around the world.
For more than 80 years, the Adidas has been part of the world of sports on every level, delivering state-of-the-art sports footwear, apparel and accessories. Adidas strategy is: continuously strengthen brands and products to improve competitive position and financial performance. Adidas brands are visible all over the world and sponsor global sports events such as the Olympic Games. Task A-Market Environment Analysis
"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations". Strategy can be defined as the scope of an organization over the long term, which achieves advantage in a changing environment through effective utilization of resources and competencies (Johnson et al, 2005, p9)
Organizational decision makers base their choice of strategy on their perceptions of the opportunities and threats in the environment, and the Internal strengths and weaknesses of their organization. Then, as a result of the strategy they choose, they institute an appropriate organizational structure. (. P111 Slack, M Parent, 2006) It is important for adidas Group to identify and respond to environment and industry changes in order to change its strategy and stay competitive and innovative. Sports equipment Industry
The sporting goods industry includes a wide range of sports and recreation activities. While most people tend to think of the industry in relatively narrow terms related to their own experiences, in reality, the industry includes six basic types of activities (R.Lipsey 2006):
The sports goods industry faces a segmented market and a high volatility of demand.( W. Andreff, S Szymański 2006:43) Value of industry
Total value of Adidas and Reebok is $9.3 billion (forbes.com 2010)
Organizations are mainly surrounded by three major layers of environment namely macro environment, industry and competitor see fig 1 (Johnson et al, 2005, p64). First we need to analyse Adidas Macro-environment - The set of factors and influences that are not specific to an organization or the industry in which it operates, but that nonetheless affect them.( Adrian Haberberg, Alison Rieple 2008:105)
Fig 1 Adopted from Johnson et al, 2005, p64
Political and regulatory factors influence sports equipment industry. For example, Brazil and Argentina recently introduced higher import duties on footwear imports from China on a preliminary basis. Similarly, in December 2009, the European Union extended the existing anti-dumping measures against leather-upper footwear from China and Vietnam for a period of fifteen months. These duties are expected to negatively impact on Adidas gross margin. (Adidas group) Economic
* Global economic conditions (including global demand for goods and services affecting sales levels and the availability of credit lines for business to its key suppliers affecting product supply) is affecting industry. * Exchange rate movements are important because sports in industry numerous purchase and sale transactions are in foreign currencies. A charge In exchange rates that affects the demand for shoes at competing company can indirectly affect the demand for company products.(J. Madura 373) * Consumer spending in European Union continues to be hampered by increasing energy prices, a continuing housing recession, and modestly rising unemployment rates (Eurostat). All factors stated above are influencing personal disposable income. Growth in the sporting goods...