Adidas Competitive Analysis

This assignment delves into a comparative analysis of Adidas's business strategies and competitive advantages within the dynamic sportswear market. It requires an examination of their business models, strategic capabilities, and how they position themselves against key competitors like Nike. The analysis should also consider the challenges Adidas faces in this competitive environment and explore relevant industry trends impacting the company's future.

Running head: Strategic management and marketing
Strategic management and marketing

Strategic management and marketing
Table of Contents
Introduction.................................................................................................................................................3
Analysis of macro environment...................................................................................................................4
PESTLE analysis.........................................................................................................................................4
Analysis of microenvironment....................................................................................................................5
SWOT analysis............................................................................................................................................5
Porter five forces model..............................................................................................................................7
Key issues in Adidas and resolutions...........................................................................................................8
Strategies of Adidas.....................................................................................................................................9
Recommendations.......................................................................................................................................9
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11
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Strategic management and marketing
Introduction
The report explains the business activities and operation of the sportswear company.
Adidas Company has been selected for the report. Adidas is leading sportswear company across
the world. It explains that how the company is increasing its net profit and operating profit in the
market. It describes the various marketing strategies that are used by the company. Further, the
report explains the SWOT analysis, Pestle analysis and porter five forces analysis of the
company. It tells that how the company is becoming a most popular brand in the world. It
explains the current innovation and production techniques of the company.
Adidas is a German multinational company which was founded on 1924. Its head office
is located in Herzogenaurach, Bavaria. It deals and manufactures clothing, shoes, baseball,
football products, and accessories. It is one of the biggest sportswear producers in Europe and
second biggest in the world. There are approx 53,731 employees are employed in the association.
The company maintains the highest brand loyalty in the world. The company has done various
collaborations with popular designers such as Raf Simons, Alexander Wang, and Jeremy Scott.
The company is increasing its revenue and profit day by day. The Adidas group wants to bring
innovation and inspiration to every athlete in the world. The firm wants to become a leader in the
sports and apparel industry. Mainly, the company focuses on the business practice, strategies and
transactions in order to meet long-term goals and objectives. The main aim of the company is to
provide a wide range of good quality of products to its customers in the market. Further, the
company wants to make good relationship with its customers. The firm continues improving the
quality and image of the products in the market (Ratten, 2011). The core values include
performance, integrity, diversity, passion, honesty, and trust. The firm identifies target customer
in the market to satisfy the customer needs, wants and requirements across the world. The
capabilities and resources of the company include efficient employees, strategic innovation, and
supplier relation, good reputation, outsourcing capability, financial control, and distribution
network. Adidas is selling its products through various distribution channels to gain the revenue
and profit of the company. The unique and effective brand image and reliable and excellent
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Strategic management and marketing
products are the main competitors’ advantages for the company (Uhrich, Koenigstorfer &
Groeppel-Klein, 2014).
Analysis of macro environment
A macro environment is a situation which exists in the economy. The macro environment
is also called as the external environment. It includes various external factors such as inflation,
political factors, economic factors, socio-cultural factors, gross domestic product, and fiscal
policy.These factors cannot be controlled by the company. The business activities and operations
are highly affected by these external factors. By using of pestle analysis, the company can
evaluate and measure these external factors (Lu & Xu, 2015).
PESTLE analysis
The pestle analysis has been discussed below.
Political factors: Theses factors play a vital role in the external environment. It affects the
business operations and activities. The political factors such as war, risks, terrorism, nationalism,
vital changes in trade policies and regulations influence the business of the firm. The firm cannot
take the benefits of the low labor salary due to political factors. Thus, the company should
evaluate and analyze these factors to gain the long-term goals and objectives (Shank & Lyberger,
2014).
Economic factors: These factors influence the profits and revenue of the firm. The economic
factors include taxation, unemployment, inflation, interest rate and per capital income. The
business goals and objectives are affected by these economic factors. These factors should be
controlled by the government to maintain sustainability in the market. In this way, the firm can
also overcome on its competitors (Hlophe, 2013).
Sociocultural factors: These factors also affect the business innovation of the company. The
sociocultural factors include language, race, culture, religion, buying habits, gender, and lifestyle
of the people. The company should measure and evaluate these factors to overcome on its
competitors and to obtain a higher return in near future.
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Strategic management and marketing
Technological factors: Adidas is one of the biggest companies in footwear industry across the
world. The technological factors affect the business activities and operation of the company.
Therefore, the company should analyze these factors to gain the competitive benefits in the
market. The firm must analyze and evaluate the technological factors to measure the technology
of the competitors across the world. In this way, the firm can increase its production process and
it can also enhance the production quality in the market. It will save the energy, time and efforts
of the employees (Rothaermel, 2015).
Environmental factors: Adidas must evaluate and analyze the environmental factors which
influence the business actions and operations across the world. The main aim behind to evaluate
these factors is to encourage and increase the use of sustainable and good quality of products in
the market (Luo, Sun & Wang, 2011).
Legal factors: These factors play a vital role in the macro environment of the country.
Therefore, the firm must evaluate and identify these factors to run the business smoothly across
the world. Legal factors include various acts such as sales and supply of goods act, press
complaints commission, advertising standards authority import and export. All these factors play
an integral and significant role in Adidas Company. These factors can affect the business
activities, management and operation of the firm negatively thus these factors should be
controlled and monitored by the company to maintain a good position in the market (Pangarkar,
2011).
Analysis of microenvironment
A microenvironment is also called as internal environment of the country. It affects the business
areas, operations, activities, and decision-making process of the company. These external factors include
customers, suppliers, competitors, public, and distribution channels. These factors can be controlled and
managed by the company with the help of SWOT analysis (Krüger, Stieglitz & Potthoff, 2012).
SWOT analysis
Through SWOT analysis, Adidas can evaluate and analyze the strengths, weaknesses,
opportunities, and threats of the company. The SWOT analysis has been discussed below (Gabel,
2015).
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Strategic management and marketing
Strengths Weaknesses
 Adidas develops new and innovative
sports products.
 It provides effective wider distribution
network.
 It provides collaboration and teamwork
to its employees.
 The firm maintains strong financial
position in the market.
 It provides limited economical and
financial resources.
 Competitors affect the business
activities and operation of the company.
 It includes market and foreign
exchange risk.
 The company charges high prices due
to its effective and innovative
production strategies, methods and
techniques.
Opportunities Threats
 It provides excellent growth
opportunities in Asia.
 It increases fitness and health tendency
and trend across the world.
 It increases the demand for premium
and good quality of products.
 Mainly, the firm focuses only on sports
and footwear products.
 It increases the competition in the
market.
 Government rules and regulations also
affect the business activities and
operation of the firm.
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Strategic management and marketing
Porter five forces model
Porter five forces model has developed by the Michael Porter to analyze and evaluate the
competitors of the company. This model includes rivalry/ competitors, bargaining power of
suppliers, bargaining power of buyers, threats of substitutes and threats of new entrants. The
porter five forces model has been discussed below (Shank & Lyberger, 2014).
Rivalry: It is the first step of porter five forces model which should be analyzed by the company
to overcome on its existing competitors in the market. The main competitors include Nike Inc,
Puma SE, converse, Fila, Asics, Air Jordan are the main competitors of the firm. First, the
company needs to identify its competitors which are existed in the market. The firm needs to
evaluate and analyze the strategies and plans of the competitors in order to gain long-term goals
and objectives (Mahdi, Abbas, Mazar & George, 2015).
Bargaining power of suppliers: It is the important step to analyze the bargaining power of
suppliers in Adidas. The company is not able to find out the main competitors of the company.
Thus, the company should identify the main suppliers of the firm to maintain the sustainability
across the world (Mann & Byun, 2011).
Bargaining power of buyers: There are two main buyers of the company such as professional’s
athletes and a group of buyers who want to wear comfort and stylish footwear, apparel and sports
accessories. Thus, the firm should evaluate and measure the bargaining power of buyers in the
market (Elangovan, 2012).
Threats of a substitute: The Company should analyze its substitutes who are producing the
same products as well as Adidas. Although, they are not considered the competitors of the firm
but still substitutes affect the productivity and efficiency of the company (Miloch, Lee, Kraft &
Ratten, 2012).
Threats of new entrants: To starts a new business, first the company needs to think the market
of the country. New entrants are the major issue for the company, thus the corporation should
analyze the new entrants and competitors which are entering the market. In this way, the
company can beat the competitors and the firm has chances to know the marketing strategies and
position of the company (Ratten, 2011).
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Strategic management and marketing
Nike Inc. is one of the biggest competitors across the world. Through porter five forces analyze,
Adidas can evaluate and measure the plans and mission of its competitors in the market.
Key issues in Adidas and resolutions
Due to high competition exists in the market; the firm is facing various key challenges in
the retail world. The firm is not fulfilling the expectations and requirements of the customers.
The competition is increasing between Adidas and Nike Inc, under armour. But in today’s era,
Nike is making effective and excellent position in the market due to its effective and unique
strategies. Inventory is the big issue in the company (Kahle & Close, 2011). As a result, it has a
negative impact on its financial and economic report. Now a day’s the firm is charging high
prices for its sports and athletic products in the market. Further, the company is operating its
business globally but still, the distribution network of the company is very weak and
inappropriate. Adidas supply chain management is also very complex and long and it depends on
the factories across the world. In this way, it becomes difficult to manage distribution in an
appropriate and effective manner. Changes in purchasing power of customers and individual
various product choices are the major key issues for the company. The firm is not able to do
effective planning and forecasting. Globalization and competitive environment are also a big
challenge for the company. Further, the company is not able to find good and potential
employees to do the job effectively in the company. All these challenges are faced by the Adidas
group in the market (Piller, Lindgens & Steiner, 2012).
Adidas should make effective plans and policies to overcome these challenges across the world.
The firm needs to focus on its communication and information technologies. The firm must use
advance time sensitive innovative techniques to control and resolve these key challenges.
Further, the firm needs to improve its distribution network across the world. The company
should provide training to its employees to improve the productivity and efficiency of the
employees. Adidas should use collaborative physical logistics across the world to increase the
productivity of the company. By using of collaborative physical logistics management, the
company will become able to share and exchange its physical infrastructure and transportation
such as warehouse storage and stores. In this way, the company can resolve entire issues and
challenges that are faced by the company (Cafagna, Diterlizzi & Voorhorst, 2014).
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Strategic management and marketing
Strategies of Adidas
The strategies of Adidas have been discussed below.
Global sales strategy: It is an important strategy of the company. This strategy is responsible
and liable for the commercial activities and functions of the Adidas. Through this strategy, the
company is able to maintain a good image in the market (Brennan, Merkl-Davies & Beelitz,
2013).
Global brand strategy: To secure and maintain long-term sustainable growth and success, the
global brand strategy is focusing on the development and improvement of the brand across the
world. Through brand strategy, the company is able to make a good image in the market
(Caniato, Caridi, Crippa & Moretto, 2012).
Marketing strategy: The Company is using the effective marketing strategy to analyze and
evaluate the plans and strategies of the competitors in the market. In this way, the company can
maintain sustainability in the market. The company needs to aware in the market to beat the
competitors in the market (Connor & Haines, 2013).
Distribution and promotional strategy: The Company is using the distribution strategy to
distribute its products across the world. Through distribution and promotional strategy, the
company differentiates its products from the competitors’ products in the market.
After various researches, it has been analyzed that the firm is using effective and innovative
strategies and plans to gain the success and growth in the market (Merk, 2014).
Recommendations
Although, the company is increasing its business in the market but still it needs to improve the
marketing strategies to gain success and growth in the market. The firm should tie up with
various chain supplying companies to increase and enhance the distribution network in the
market. Through this strategy, the firm can reach its targeting customers in the market. Adidas
can establish more shops and stores around the world to provide various products to its
customers in the world. The company should conduct advertisement programs and campaigns to
attract the more customers in the market. The firm should use effective and unique promotional
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Strategic management and marketing
strategies to increase the sales of the products. The firm must focus its positioning and targeting
strategies to generate more sales in the market. The company should reduce the prices of the
products to increase the demand of the Adidas products across the world. The firm should use
effective and excellent internet applications so that the various products are made available in the
market. The company should produce some new products to gain the competitive advantages in
the market. Adidas must improve its advertisement and marketing strategies to gain success and
growth in the market. It should focus on the marketing mix of the firm. The marketing mix
includes product, price, promotion, and place. Through marketing mix strategies, the firm can
overcome on its competitors in the market.
Conclusion
On the above discussion, it has been evaluated that the company can improve their
business with using various effective and unique strategies in the market. The company should
focus on the market penetration, product development, market development and diversification.
By using effective marketing strategy, the firm can determine the success and growth of the
association. The company is improving its two-way communication system to attract more
customers in the market. Further, it is maintaining teamwork and collaboration at the workplace.
In addition, Adidas needs to use some innovative and new technologies to make different
sportswear and footwear in the market. Through SWOT analysis, PESTLE and porter five forces
analysis, the company can evaluate and analyze the position and strategies of the competitors
across the world. Some recommendations have been suggested in the report to improve its brand
and goodwill across the world. Therefore, the company is trying to become a most popular brand
in the world in the sportswear industry.
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References
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