ADIDAS GROUP PROFILE:
Adidas Group is a global leader in the sporting industry, offering a board portfolio of products available in virtually evey country on the world. Adidas and Reebok are brand of Adidas Group that products include footwear apparel and accessories. Five Ten and TaylorMade- adidas Golf are the another brand. The group operation is controlled directly from Group’s headquarters in Herzogenaurach, Germany. s. Also located here are the headquarters of brand adidas and the strategic business units for Running, Football and Tennis as well as the Research and Development Centre. Additional key corporate units are based in Portland, Oregon in the USA, the home of adidas America Inc. and where the strategic business units Basketball, Adventure and Alternative Sports are based. Reebok headquarters is located in Canton, Massachusetts and TaylorMade-adidas Golf is based in Carlsbad, California. The company also operates creation centres and development departments at other locations around the world, corresponding to the related business activity. adidas Sourcing Ltd., a fully owned subsidiary headquartered in Hong Kong, is the worldwide sourcing agent for the adidas Group. The adidas Group also operates a limited number of own production and assembly sites in Germany (1), Sweden (1), Finland (1), the USA (4) and Canada (3). the adidas Group employed 46,306 people which represent a cross-section of cultures, ages and background. Adidas capital is about 434 million Euro in 2012. The market structure of company is monopolistic competition and the main competitor is NIKE
1. Porter’s five forces model considers the 5 competitive forces that impact a business success or failure: Threat of new entrants, bargaining power of buyers, threat of substitute products or services, bargaining power of suppliers. I will choose threat of new entrants to explain in detail. Threat of new entrants: if the industry sector is make profit easily so new entrants will want to come and join in the party, but nothing is easily so Porter had drawn 7 major barriers to entry: - Economic of scale: new entrant when first coming to market will open as small business and this is cause high cost of production - Product differentiation: the new entrant has to develop their product to create the different from the current competitors to build the brand image - Capital requirement: It will need money to establish plants, distributors services - Switching costs: this is the cost when the consumer have to be charged when they want to change their current products. This cost could be high, low or none in some industry.
- Access to distribution channels: is it easy to approach the current distribution channels that have been controlled by a major players in the market - Cost disadvantage independent of scale: this is the cost that new entrant will be face up because they have to train the employees before they can produce and sell their product to the market - Government policy: This is the most important barriers that the new entrant should consider. The new entrants must find out that their industry sectors is a monopolies or not and do the government encourage new entrants for this sectors. With the chosen firm –Adidas the threat of new entrants for ADIDAS is low because of some barrier that prevent a new competitor from competing directly with ADIDAS: * Capital requirement: Huge capital is required when entering footwear market. Adidas group ‘s capital is 434 million in 2012. A huge capital to...
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