Adidas: Creating a Niche Market and Lowering Product Costs

Operational
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Organisational Overview........................................................................................................1
Has Adidas created a niche market by differentiating it from its competitors? Explanation of
the perspective........................................................................................................................1
How Adidas has been able to lower the costs of its products? Discussion of views.............5
Discussion in detail of the understanding of success or failure behind Adidas supply chain
management strategies............................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Operations management can be described to administration of entire business practice for
creating huge efficiency level in the enterprise. The concept is related to converting materials
together with efforts of labours into tangible commodities or intangible services as successfully
as possible for the purpose of maximising organisational profits (Annarelli and Nonino, 2016).
All business concerns have separate department of operations management that attempts for
balancing costs with income so that highest net operating profits are achieved as soon as
possible. It majorly includes utilisation of resources such as materials, technology, human
capital, equipments and many more. The report is based on Adidas that is Multinational
Corporation that was established by Adolf Dassler in 1924. The report includes answers of three
questions as per the Case Study of Adidas Management. It highlights about has the company
created niche market through differentiating it from its rivals. Further, it includes the ways the
entity has been able to lower costs if its commodities and understanding about success and
failure behind supply chain management strategies of the business.
MAIN BODY
Organisational Overview
Adidas is well popular multinational company that was established in the year 1924 by
Adolf Dassler. Its headquarters are situated in popular city Herzogenaurach, Germany. It is one
of largest sportswear entity across nation and majorly deals in clothing, shoes and other products.
It has more than 57000 employees that makes huge efforts from the point of designing to selling
phases. It has mission of becoming best sport brand across the globe and has strong management
team along with effective corporate strategies.
Has Adidas created a niche market by differentiating it from its competitors? Explanation of the
perspective
Niche market is termed to that market that is known as subset of main market wherein
main focus is on particular product. It defined about features of product that aimed to meet
specific needs of that market section (Ávila and Amorim, 2016). Moreover, it is small market
segment that is created v\by an entity for understanding the needs of that particular segment and
then offering suitable commodity that differentiates it from its rivals. Addition to this, niche is a
focused and targetable part of wider market in which an entity must leverage its expertise
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together with knowledge. Creation of such market is considered as important path to success as
well as establishing dominant position in the targeted segment for various businesses. No large
companies can be all for all people, so it is important for all to target a niche segment so to fulfil
their unmet needs and requirements for particular commodities and services.
In case with Adidas, yes the entity has created a niche market through differentiating itself
from its major competitors. As the entity has main objective of becoming worldwide leader of
offering sporting products. To attain this, the entity has formed niche market through focusing in
various parts that are maintaining variants of brand portfolio, emphasising on monetary
investments on most promising avenues, ongoing development of innovative commodities,
creating adaptable addition to efficient supply chain, cultivating passionate corporate culture as
well as functioning as environmentally together with sustainable thoughtful company. Besides
this, the company followed basic concepts that are key for niche market success and that includes
offering unique products, offering marketable products, selecting available niche market and
them marketing. Marketing is more important as increases awareness among targeted segment
about the products and services in which the entity is best (Benedetti, Cesarotti and Introna,
2017). This is considered as its major marketing tactic that is deployed for targeting particular
market segments that is unique in nature and is not yet targeted by the rival firms yet. It is
created through identifying customer wants and then trying to offer them with better solutions for
any problem that is least emphasis by other companies. Moreover, a niche market not only refers
to small market but also includes particular target population having specialized offerings. With
this, the organisation become leader of the market and enhances possibilities for other businesses
to enter in the specific segment.
It is analysed that Adidas has majorly targeted audiences from apparel, footwear and
clothing industry, including high preferences for sportswear products. The entity first understood
all the demands of the industry and later offered them similar products such as accessories,
shoes, watches and many more as per their choices along with values that was different from its
main competitors like Nike, Puma, Under Armour and so on. Following are the steps thatw ere
followed by Adidas managers to create a nice market:
Examining existing business: The managers of Adidas at this stage examine its existing
practices, policies, strategies, plans and available products. Along with this, they also think about
particular client segment with whom they like to work with as well as though about the common
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