Principles of Marketing
Adidas AG sells sports shoes, apparel, and equipment in 170 different countries. There focus lies in football, soccer, basketball, running, training gear, golf, and apparel. This is a two billion dollar industry and with Adidas being a main cog. They also specialize in lifestyle goods including SLVR and Y-3 fashion brands. They have trademarked their three-striped logo that has become a global symbol of sporting excellence. They are the #2 sporting goods manufacturer behind only NIKE. Adidas’ main market is the footwear manufacturing industry. Research and development is what gives Adidas a competitive advantage. They focus many resources on being innovative and developing new products. An analysis of the internal and external environments indicates the firm has strengths in new product development, a global footprint, and a strong brand portfolio. The main weakness of the company is their dependency on a third party manufacturer. They have many strategies planned out to reach marketing objectives. They have a number of actions they plan on using to innovate and expand their company.
Adidas’ primary industry is Footwear Manufacturing. The US footwear manufacturing industry consists of about 230 manufacturers with sales of about $2 billion (Hoovers 2012). The major shoe companies in the US are mainly owners of brand names that source their shoes from independent manufacturers outside the US. Some US manufacturers make a percentage of their shoes in the US while other smaller operations manufacture all their shoes in the US. The global footwear market generates about $85 billion in export revenue, according to the International Trade Centre. The largest footwear producing countries in terms of export revenue are China, Italy, Vietnam, and Germany.
The shoe manufacturing industry is high risk because economic stability affects spending on non-essential goods. In times of economic struggles people may shy away from buying news shoes or opt to purchase the bare essentials. This limits the opportunity of growth within the industry. Demand is driven by fashion and demographics and calls for the need of good design and merchandising. Some opportunities do include Internet sales, international sales, and brand extensions. These are ways that the companies within the industry are looking to expand and obtain a competitive advantage. The output of US footwear and other leather products manufacturing is forecast to grow at an annual compounded rate of 1 percent between 2012 and 2015 (Hoovers 2012).
Brand names are the most valuable asset of shoe companies. Many companies put their products on display for wholesale buyers, and exhibit them at regional and international trade shows. Retailers usually place orders with shoe companies three to four months ahead of expected delivery time. Shoe companies then place orders with their manufacturers who import them into the US. Large shoe companies maintain a quality control staff near their foreign manufacturers. Relationships are a major part of the industry. There are no long-term contracts with manufactures or retailers, so the need for maintaining goodwill within the supply chain is essential (Hoovers 2012).
Adidas grew from a feud between German brothers Adi and Rudi Dassler, who created athletic shoe giants Adidas and Puma. In the early 1920’s, the two brothers began a shoe company together and by 1926 the shoes' success allowed the Dasslers to build a factory. In 1936 American Jesse Owens sprinted to Olympic gold in Dassler's double-striped shoes. Soon a dispute between the brothers split the business. Rudi set up his own factory, facing Adi across the River Aurach. The brothers never spoke to each other again, except in court. Rudi's company was...