Global Business Strategy Paper 2022

Running head: GLOBAL BUSINESS STRATEGY
GLOBAL BUSINESS STRATEGY
Name of the student
Name of the university
Author Note

Executive Summary
The respective paper is a global business strategy of the two American companies, Nike
and Adidas. The paper is a comparison and contrast between the American lifestyle companies
Nike and Adidas by introspecting, analyzing and interpreting the resources and capabilities of the
firm for strategic leveraging to create sustainable competitive advantage. The respective paper
would be utilizing VRIO Framework for analyzing the business strategy of both of the
mentioned firms in order to bring out the differences of competitive advantage between them
precisely and clearly in the assignment.

Table of Contents
Introduction.................................................................................................................................................3
Who outperforms whom.............................................................................................................................3
Nike.............................................................................................................................................................3
VRIO of Nike................................................................................................................................................4
Adidas..........................................................................................................................................................6
VRIO Framework of Adidas..........................................................................................................................6
Difference between the two companies.....................................................................................................9
Conclusion.................................................................................................................................................10

Introduction
The respective paper is a global business strategy of the two American companies, Nike
and Adidas. The paper is a comparison and contrast between the American lifestyle companies
Nike and Adidas by introspecting, analyzing and interpreting the resources and capabilities of the
firm for strategic leveraging to create sustainable competitive advantage. The respective paper
would be utilizing VRIO Framework for analyzing the business strategy of both of the
mentioned firms in order to bring out the differences of competitive advantage between them
precisely and clearly in the assignment.
Who outperforms whom
The company Nike has been ahead than Adidas however, Adidas has been outperforming Nike
in terms of technology, innovation and style, globally. Adidas has been globally recognized as an
innovating company, bringing innovative pair of shoes and accessories to the youth which goes
by the global trends and fashion (Mahdi et al. 2015).
Nike
Nike is an American multinational corporation which is committed to designing,
developing, manufacturing and marketing the sale of footwear, apparel, equipments, accessories
and services. The company has its headquarters at Beaverton, Oregon in the Portland
metropolitan area of the United States. Nike has been considered to be the largest supplier of
athletic shoes, apparels and uniforms and is one of the major manufacturers of sports equipments
all over America and the world (Nike.com.2019).

VRIO of Nike
VRIO Framework is a business analysis framework that forms a part of firm’s macro
strategic planning. VRIO framework is an analytical technique that evaluates a company’s
resources, thereby, evaluating the company’s competitive advantage. VRIO framework has four
different parts which are classified as: V- Valuable, R- Rare, I- Inimitable and O- organized
(Knott 2015). Analysis of Nike in the VRIO Framework can be deduced hereafter.

Valuable? Rare? Costly to
imitate?
Exploited by
organization?
Competitive
implications?
Firm
performance
Technological
capabilities
Yes Yes Yes Yes One of the
latest and
significant
competitive
advantages.
Outstanding
in the global
and local
market.
Customer
Focus
Yes No No Yes Sustainable
competitive
advantage
(which
means
consumers
tend to stick
to the brand)
Average in
global
market
Brand
recognition
Yes Yes Yes Yes Sustained
competitive
advantage
Outstanding
in global
market
including
third world
countries
Effective
marketing
capability
Yes No Yes Yes Competitive
in terms of
its peers
Above
average,
including a

massive
global
campaign
Strong
distribution
capability
Yes Yes Yes Yes Above
average
sustainable
competitive
advantage
Outstanding
performance
in global
market.
Adidas
Adidas is a multinational company which has its headquarters in Germany, which designs and
manufactures shoes, clothing and accessories, especially for necessities of sports and latest
trendy activities such as hiking, trekking and camping. It has been considered to be the largest
sportswear manufacturer in Europe, and the second largest in the world, after Nike. Adidas is a
holding company of Adidas group that comprises of Reebok sportswear company, Taylormade
Golf company. Adidas possess a unique, remarkable and trendy branding logo as well as
packaging which has been made famous all over the world, especially among the young
generations and adolescent sport and adventure enthusiasts (Adidasgroup.com.2019).
VRIO Framework of Adidas

Valuable? Rare? Costly to
imitate?
Exploited
by
organization
?
Competitive
implications
?
Firm
performanc
e
Product
portfolio
Yes with the
inclusion of
various
marketing
segmentatio
ns and
consumer
preferences.
Up to
certain
extent as
most of
the
competitor
s of
Adidas are
trying to
enter the
segments
Yes Yes Short term
competitive
advantage
for the
company
requiring
continuous
innovation
and
rejuvenation
Above
average in
the local as
well as
global
market.
Opportuniti
es for
extension of
brand
Yes No Yes Yes and in
the path of
exploiting
more
perspectives
in near
future
Temporary
and short-
term
sustained
competitive
advantage
Average in
the global
as well as
local
market.
Marketing
expertise
Yes. The
other
No. Most
of the
No.
Pricing
Yes. The
firm has
Temporary
competitive
Above
average in

within the
Adidas
marketing
strategies
enterprises
are in a
competition
based on the
differentiatio
n in the
industry.
competitor
in this
arena are
aware of
the
marketing
statics and
dynamics
strategies
often get
matched
with the
competito
r in the
market.
been
reported to
be
leveraging
and
developing
its in-house
expertise
advantage the global
forum
Customer
community
Yes.
Customers
have been
co-creating
products by
providing
the firm with
ideas.
Yes. The
firm has
special
ability to
build
relationshi
p with
customers
No. Plethora of
upsides still
left.
Strong
competitive
advantage
Average
Opportuniti
es for brand
extensions
Yes. New
brands
emerging in
the market.
No. Can be
imitated
by
competito
r
Yes Not critical Average
Capabilities
to manage
regulatory
Yes No. Yes Yes Not a
critical
Average

obligations factor
Difference between the two companies
Difference between Adidas and Nike can be deduced hereafter. Adidas has higher
financial leverage than Nike that signifies that Adidas does depend in debts more than Nike.
Nike depends on internal funding more than external funding. Over the period of several years,
Nike, as a sports equipment and apparel brand, has shifted its focus to the sport Football, which
has given them a universal recognition (Holland, 2015, May). Whereas, Adidas targets people in
football and tennis, however, Nike being exclusively famous than Adidas in European countries,
which are considered to be the hub of football charisma (Richelieu, 2016). The distribution
strategy used by Adidas is concentration of most of their products and resources in places that
has cluster of customers (Choi et al., 2015). Nike, on the other hand, explores different new and
developing markets all around the world where distribution is independent, along with
subsidiaries and licenses (Kaser & Oelkers, 2015). Promotional Strategies used by both of the
companies are the media tools such as usage of magazines and endorsement. Adidas provides
more of quality enhancement in their work while Nike provides the customers with innovation
and creativity in their product development (Steenkamp, 2017). However, it has to be
remembered that even though Nike has been overpowering Adidas in terms of revenue annually,
Adidas has been outperforming Nike for the last ten years in terms of innovation, creativity and
style. (Mahdi et al. 2015).

Conclusion
The respective paper is a global business analysis of the two American companies, Nike
and Adidas. The respective paper has analyzed the global competitive advantage of the two
companies, Adidas and Nike in an attempt to deduce the difference between both of the
companies and understanding which company overpowers the other. The respective paper had
been utilizing VRIO Framework for analyzing the business strategy and competitive advantage
of both of the mentioned firms in order to bring out the differences of competency and credibility
between them in the global market precisely and clearly. The paper is a comparison and contrast
between the American lifestyle companies Nike and Adidas by introspecting, analyzing and
interpreting the resources and capabilities of the firm for strategic leveraging to create
sustainable competitive advantage.

References:
Adidasgroup.com.(2019). Available at: https://www.adidas-group.com/en/
Choi, H., Ko, E., Kim, E. Y., & Mattila, P. (2015). The role of fashion brand authenticity in
product management: A holistic marketing approach. Journal of Product Innovation
Management, 32(2), 233-242.
Holland, C. P. (2015, May). Internet and Social Media Strategy in Sports Marketing. In ECIS.
Kaser, K., & Oelkers, D. B. (2015). Sports and entertainment marketing. Nelson Education.
Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources?. Management
Decision, 53(8), 1806-1822.
Mahdi, A., Abbas, M., Mazar, T. I., & George, S. A. (2015). A Comparative Analysis of
Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to
Competitive Advantage in the context of a Dynamic and Competitive Environment.
International Journal of Business Management and Economic Research, 6(3), 167-177.
Nike.com.2019. Available at: https://www.nike.com/in/
Richelieu, A. (2016). Sport teams' brands going international: The ‘Integrated Marketing
Strategy on the Internationalisation in Sport’(IMSIS). Journal of Brand Strategy, 5(2),
218-231.
Shank, M. D., & Lyberger, M. R. (2014). Sports marketing: A strategic perspective. Routledge.
Steenkamp, J. B. (2017). Global brand strategy: World-wise marketing in the age of branding.
Springer.