New Product development for Adidas Discussion 2022

New product development
NEW PRODUCT DEVELOPMENT FOR ADIDAS
DATE
STUDENT NAME
STUDENT ID
TUTOR’S NAME
TUTORIAL TIME
UNIVERSITY NAME
WORD COUNT

New product development
Table of Contents
Executive summary..................................................................................................................4
Adidas Australia.......................................................................................................................4
The Market background and key take-aways.......................................................................4
Stakeholders..............................................................................................................................4
Strategy and objectives............................................................................................................5
Competitive environment........................................................................................................7
Target market...........................................................................................................................8
Positioning strategy pricing strategy......................................................................................8
Conclusion.................................................................................................................................9
References.................................................................................................................................9
Appendix...................................................................................................................................9
Individual reflection.................................................................................................................9
2 | P a g e

New product development
List of tables
Table 1 Projected profit and loss statement...............................................................................5
List of figures
Figure 1 Market share of footwear product companies.............................................................5
3 | P a g e

New product development
Executive summary
The business strategy of Adidas would demonstrate a set of competitive moves and actions
taken by company while introducing new footwear product line. The discussion will be
around penetration and marketing strategies for the customers. The strategy includes three
levels of decision making namely business level, corporate level and functional level decision
making. Here, the report will focus only on functional level business strategy which will
demonstrate the strategies for introducing “self-lacing sneakers” techno product line,
considering financial and marketing aspects. The business strategy outlines the steps by
which new product can be launched successfully and desired outcome can be achieved by
strengthening the performance and improving quality of new shoes.
Adidas Australia
The Market background and key take-aways
Stakeholders
4 | P a g e

New product development
Strategy and objectives
What is your business strategy, goals and objectives for the new footwear product?
Consider both marketing and financial objectives and present smart objectives
Adidas Australia aims to increase their sales by 20% with increased net income by 5% in
coming 5 years by means of new brand extension in the footwear industry. Adidas will
extend their existing product line by introducing “Self-lacing sneakers 2.0”. The shoes will be
manufactured by using the most innovative technology and enable company to serve their
customers belonging to different backgrounds namely athletes, businessman, industry leaders,
young entrepreneurs, etc.
Product Description: This product “Self-lacing sneakers 2.0” is from the Adidas Brand. It is
primarily targeted towards men athletes, businessman, industry leaders, and young
entrepreneurs who do not want to spend time tying shoes in their rapidly moving routine life.
The self-lacing shoe will be battery operated featuring a high quality canvas wrap around
it. The shoes will itself adjust and tighten the shoe lace based on size of the individual foot. It
has elastic stretch mechanism and the shoes are lightweight and comfortable to wear. There
will be two small touch buttons of left side of the shoes, and on pressing those buttons, an
individual can loosen or tighten the shoe laces. It has a high quality EVA sole for higher
durability. It will have Bluetooth enabled app with which person can adjust the shoe lace by
giving commands in the app to tighten or lose by some degree. The product will be available
in 3 colors namely Red, Green and Yellow with seven different sizes. The product has a 10W
portable pad charger to charge the shoe batteries and app installation kit.
5 | P a g e

New product development
The customer value creation would be the fact that the shoes will be stylish and possess good
quality and durability along with the next generation technical features. A portable Charging
board and in-built battery backup will be provided along with shoes. The company emphasis
on the slogan: “designing something new for foot”. The company is excited about its launch
as it has been spotted as one of the most favorite brands amongst the youngsters.
Adidas aims to provide convenient footwear blended with digital technology and cool
designs. The company will have particular strategies for managing finances against marketing
the shoes. The company will adopt both print media and social media platform to market their
products. The objective of the company is to penetrate the customers belongs to the age group
of 17-34 years. “Self-lacing sneakers 2.0” will be marketed through marketing campaign and
sports sponsorships. It is essential to give convenient experience to customers while selling
any footwear products, customer expect to see personally how the “self-lacing sneakers 2.0”
works, the store will give details about the product and will have separate demo sections for
this brand extension to give premium experience to the customers. The table has given
projected profit and loss statement for Adidas for introducing new product. The income and
expenses are based on past results and assumptions. The given figures are related only for
new product line of “self-lacing sneakers 2.0” for Adidas.
Projected profit and loss statement for Adidas’ New Product Line
Particular Year 1 ($) Year 2 ($) Year 3 ($)
Sales 350000 1500000 2000000
Direct cost of sales 4000 5000 6000
Production cost 50000 50000 50000
Gross margin 296000 1445000 1944000
6 | P a g e

New product development
Payroll 10000 10000 10000
equipment’s 15000 15000 15000
samples distributed 35000 15000 35000
marketing expenses 25000 35000 45000
Profit before tax 211000 1370000 1839000
Table 1 Projected profit and loss statement
Competitive environment
Who are your competitors (direct/indirect)? What market share do your competitors
currently have and how cluttered is the market place? This should be narrowed focus on
the competitive environment presented in assessment 2- i.e. at the product line and not the
organizational level.
Figure 1 Market share of footwear product companies
Based on the industry news, the footwear market in Australia is highly competitive in nature.
The country has a list of well-established players which may pose a threat to sketchers. If we
talk about specific product of “self-lacing sneakers 2.0”, none of the company has come up
7 | P a g e

New product development
with such kinds of shoes; however, it is in the news that Nike is going to introduce it soon.
However, the graph shows the Market share of all competitors including Adidas.
It is observed that key players which are operating in the industry and pose threat to Adidas
are “Nike Inc., Skechers Australia, Converse Australia, H & M Hennes & Mauritz AB,
PUMA SE, and Kickstarter, PBC, U&A, FILA etc. It is evident that these corporate players
jointly hold a large market share in the Australian market.
While there are some major direct competitors, indirect competition may be created in the
market. While studying retail and domestic market of Australia, it was observed that the
market comprises of labels such as Rebel Sports, Am art All Sports, target, Kmart, Big W,
Rivers, Myer, David Jones, etc. The market scenario in Australia is much cluttered and
companies are opting for mergers and acquisition to increase the market share and product
offering portfolio in the industry. Although, international brands make up for most of the
competitive market, the retailers have made out their way through collaboration in order to
sustain in the market. Considering the facts for new product development, it is important to
note that Adidas Australia should have appropriate marketing strategies to enter the market to
compete with direct and indirect players in the market. However, the “self-lacing sneakers
2.0” is a new concept is the market; it would be easy to cut through the competition and
thereby enable Adidas to gain more market attention and share.
Target market
Positioning strategy pricing strategy
8 | P a g e

New product development
Conclusion
References
https://www.youtube.com/watch?v=hViOYZVMiWs
https://interestingengineering.com/back-to-the-future-9-technologically-advanced-sneakers
https://www.youtube.com/watch?v=pTIZZ3QoG5Q
https://marketing-insider.eu/new-product-development-process/
https://www.ibisworld.com.au/industry-trends/market-research-reports/retail-trade/other-
store-based-retailing/footwear-retailing.html
Appendix
Individual reflection
Overall, it was wonderful experience to work in a team. By working in team, I found that we
get different opinions and ideas and it is easy to ponder upon different ideas on new product
development. Initially, discussion was time consuming and multi-directional but once we
decided on product, it was easy to come up with marketing and pricing strategies. The team
enables us to come up with most innovative product and services with fewer efforts. It was
9 | P a g e

New product development
really worth spending time with team members, they were intelligent and creative enough to
lead the assignment. All members belonging to different culture help us to predict the
customer views that are culturally different and staying in Australia. Initially, the
brainstorming process took much time than expected but it was worth I feel.
The most appreciating thing is that each team member was discussing their topics with each
other, although the topics were divided but we were all aware about the content of each
section. Hence, the content was more synchronized throughout the project. We worked very
well as a team and advising each other to come out with the best idea.
Working with (name of team members) was wonderful; I realized that it is important to
possess good listening skills to work in group. Listening each other carefully will enable team
to come out with better ideas and tends to have better performance compared to others. It is
imperative to consider positive point of each team member and ignoring the negative aspect,
it will enable us to collaborate and share knowledge between each of the team members.
10 | P a g e