Adidas Case Study Analysis: Global Competitiveness and Strategies

This report provides a comprehensive analysis of Adidas' global marketing strategies, comparing them with those of its main competitor, Nike. It examines Adidas' segmentation, targeting, and positioning strategies, as well as its sales channel and social media approaches. The report also includes a SWOT analysis of Adidas, highlighting its strengths, weaknesses, opportunities, and threats. Furthermore, it recommends specific regions for Adidas to focus on in the next five years to improve its market position and suggests ways for Adidas to become the industry leader. The analysis draws upon various academic sources to support its findings and recommendations, offering a detailed evaluation of Adidas' global competitiveness and strategic direction.

Running head: ADIDAS CASE STUDY ANALYSIS
ADIDAS CASE STUDY ANALYSIS
Name of the Student
Name of the University
Author Note

1ADIDAS CASE STUDY ANALYSIS
Table of Contents
Comparison between global strategies and competitiveness of Nike and Adidas.........2
Segmentation, targeting and positioning of Adidas...................................................4
Segmentation, targeting and positioning of Nike.......................................................5
Region recommended to Adidas to focus during next five years..................................6
Ways by which Adidas can become No. 1 in the industry.............................................8
References....................................................................................................................11

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Introduction
Adidas is another major global sportswear organization in the industry other than
Nike. The organization is able to offer the products with the help of three major brands that
include, Reebok, Adidas and Taylor Made-Adidas Golf. Adidas has been operating more than
170 subsidiaries in Asia, Europe and the US. The current operations of Adidas are based in
Germany along with its major competitor Puma. Adidas operates in the industry with the help
of three major segments of business including, the wholesales segment, retail segment and
other major businesses.
The analysis will be based on the comparison of Adidas and its major competitor
Nike. The strategies that have been implemented by the two organizations will be analysed in
the report in detail. The future recommendations will also be provided to Adidas based on the
analysis of its present strategies.
Comparison between global strategies and competitiveness of Nike and Adidas
The global strategies that have been implemented by Adidas can be compared with its
biggest competitor in the industry Nike (Aksoy and Öztürk 2016). The two organizations
have implemented major strategies including, sales channel strategy and social media
strategy.
Sales channel strategy of Adidas and Nike – The wholesale sales that are done by
Adidas with the help of different third party retail based channels are a major part of the
business operations of the organization. Around 68% of the total revenues of the organization
have been generated with the help of wholesale operations of Adidas. The products have been
distributed by Adidas through different third party based retail accounts. The strategy that has
been implemented by Adidas is named as “controlled space” (Azadi, Yousefi and Eydi 2015).
This mainly includes the process of development more company-owned stores and increasing

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the franchise based operations in China. The main aim of the organization is to generate 50%
of the total sales from the controlled space based operations of Adidas. The internet based
business of the organization is also being improved with the help of global strategies
implemented by Adidas (Baek et al. 2017).
According to Blaszczyk and Pouillard (2018), the sales channel based strategy that
has been developed by Nike in the year 2017 is named as “Triple Double Strategy”. The main
aim behind implementation of this strategy is based on the ways by which the company made
a promise to double the impact of its innovation and connection with the consumers as well.
The experience that is provided by Nike to the consumers is considered to be the most
important part of the strategy. Nike has been implementing different innovative methods in
the products that are manufactured and offered to the customers instead of defending its own
turf like its major competitor Adidas.
The number one position has been developed by Nike in the global sportswear based
market with the help of new and innovative types of products that are offered by the
company. The main focus of the organization has been on the retailers who are able to
provide the best experiences to its consumers on a global basis. The major aim of Nike on the
online and offline retail based platform has been to improve the customer experience in an
effective manner (Chiu and Choi 2018).
Social media based strategy of Nike and Adidas – The awareness levels based on
different brands that have been developed by Adidas are high. The organization has
developed a huge customer base with the help of proper social media communication. Adidas
has mainly aimed at improving the relationships with the customers with the help of proper
usage of social media platforms. This is considered to be an important strategy is followed
and implemented by the apparel based organizations. The Adidas Originals Facebook page

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has been able to gain around 5 million followers in the year 2014 (Chongkolrattanaporn and
Thai-Eiad 2019). Different apps have also been developed by the organization named,
mCoach Running and mCoach Football. These apps can allow the users to receive interactive
training related facilities. The tools are mainly used by the organization in order to develop
high levels of product awareness and engage the customers as well. However, Adidas has
lagged behind its major competitor Nike with respect to the social media based strategies
(Frank and Watchravesringkan 2016).
As discussed by Gratton and Kokolakakis (2018), the social media related activities
performed by Nike are worth noting with respect to the ways by which the promotion of the
products and brands have been done. The focus of the organization has not been only on the
promotions, the main aim was to engage the customers and improve relationships as well.
The focus has been provided by Nike to the athletes and the non-athletes as well. The sports
personalities and sponsorships have been used by Nike effectively in order to promote the
services and products. Marketing and social media related activities are considered to be a
major part of the popularity that has been gained by Nike in the industry.
As argued by Gwilt, Payne and Ruthschilling (2019), technology has been used by
Nike in order to interact with the customers in a close manner and develop the innovative
products as well. Nike has used Facebook in order to conduct different activities like,
marketing and branding. The “Just Do It” based slogan has been implemented by Nike on the
social media platform in order to communicate with the consumers. Twitter on the other hand
is used in order to communicate various features of its products to the consumers who are a
part of the sportswear based industry.

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Segmentation, targeting and positioning of Adidas
As discussed by Hayes and Venkatraman (2016), segmentation of the target market is
considered to be a major process that is based on the division of mass markets into different
groups of consumers who have similar wants and needs. Adidas has used segmentation
process in order to divide the bigger markets into small groups of customers. Demographic
segmentation is used by Adidas based on dividing young consumers between the age group
of 14 years to 40 years. The equity of the brand is however not limited to this group as the
products of the company are popular among consumers between the age of 40 years to 65
years.
According to Heroux (2017), psychographic segmentation on the other hand is based
on the premium and sub-premium based consumers. The quality of products that are offered
to consumers are based on the premium pricing based strategy. Targeting strategy on the
other hand is based on three major criteria that include, growth and segment size,
attractiveness of segment structures and resources and company objectives.
The segments are chosen by Adidas in order to drive the business strategy, marketing
and sales based activities. The positioning of Adidas is not only based on the sports branding.
The organization has tried to develop itself as the Creator Sports Brand. The organization had
launched a campaign named “Calling All Creators” that featured different stories from
different influential athletes from all over the world (Lim, Kim and Cheong 2016).
SWOT analysis of Adidas
Strengths – Adidas has developed a high value for its brand among the consumers.
Key sporting based events are also supported by the company. The products of Adidas are
available in different parts of the world. The strategies have been successful in attracting
consumers towards the company.

6ADIDAS CASE STUDY ANALYSIS
Weaknesses – The manufacturing based costs of the products that are offered by
Adidas are high. Adidas has a limited base of customers due to the premium products which
are offered by the company in the industry.
Opportunities – The access levels of the products in different markets around the
world have increased in the last few years. Innovative products can be developed by the
organization in order to develop a larger customer base.
Threats – The strong levels of competition faced by Adidas from Puma and Nike
have been able to affect the prices of products of the company. Different macroeconomic
threats that are offered to the organization vary with respect to the levels of expenditure of the
consumers. Technological changes are also a major threat to the organization.
Segmentation, targeting and positioning of Nike
As discussed by Lu and Xu (2015), the process of segmentation, targeting and
positioning is used by Nike in order to divide the its target customers into small groups. Nike
has used six major interactive bases for the purpose of market segmentation that include,
demographic variables, psychographic style, geographic variables, behavioural style,
socioeconomic variables and benefits that are required. The “all athletes” based segment of
consumers have been targeted by Nike. The various market segmentation related bases are
used by the organization in order to offer the products to consumers who belong to different
age groups.
Gender is considered to be an important factor by Nike in order to target the
customers in contrary to its major competitor Adidas. The lifestyle, interests, activities and
personality of the consumers are taken into consideration by Nike in order to offer its
products. The behavioural segmentation process is used by the organization in order to focus
on the needs and demands of the consumers. The region and countries are also used as a base

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for segmenting the market of consumers in an effective way. The benefits that are sought by
consumers are considered to be a major factor by Nike in the segmentation process (Merk
2015).
The targeting process is based on the ways by which the target market is divided into
different groups with respect to measurability, size, reachability and the behavioural variables
as well. The niche market is served by the organization with the help of its products. The
positioning of Nike is based purely on leading the market with the help of proper sports
equipments. The promotional activities of the organization are also based on the ways by
which Nike aims at connecting with the customers (Molinillo, Ekinci and Japutra 2016).
The global strategies that have been implemented by Adidas and Nike are quite
similar and are based in experiences provided to the consumers. Adidas has however not been
able to gain a major position in the global sportswear industry with the help of effective
communication that has been established with the customers. The customer base and
innovative products of Nike have been the most significant reason behind the leadership that
has been gained by the organization (Moon 2018).
Region recommended to Adidas to focus during next five years
The changes that have been seen in the preferences of consumers who are a part of the
global sportswear based market have a major impact on the products that are offered by the
organizations like, Nike and Adidas. The organizations have started offering the products that
are based on the demands of local people in different countries. The emerging markets have
been able to play a key role in the ways by which the organizations are to increase the
revenue levels on a global basis (Nam, Dong and Lee 2017).
The levels of competition in the emerging countries are also quite high and this has a
major impact on the strategies that are developed by the organization. Adidas is a global

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sportswear based brand and it has aimed at targeting different regions or countries with the
help of its products. Europe is considered to be the biggest domestic market of Adidas in the
entire sportswear based industry. Adidas has been able to identify two major “attack markets”
that are a major part of the focus that has been provided by the company. The two attack
markets of the organization include, Greater China and Russia and North America (Park, Ahn
and Lee 2015).
Adidas has aimed at developing its operations in the market with the aim of increasing
its revenues from these areas in the future. The brands have been supported by Adidas with
the help of high profile based sports sponsorships and supplying uniforms to the sports teams
as well. The demands for the products of Adidas have been highest in its home country,
Germany. Europe has also been a major and significant market that has been able to play a
key part in the operations of Adidas in the global sportswear based industry. However, the
future growth prospects of Adidas will be mainly based on its operations in the emerging
markets outside Europe (Pope and Nauright 2016).
Russia has been able to play a major role in the revenues that have been earned by
Adidas in the industry. Strongest sales have been generated by the Russian market for a
period of five years. Brail, Russia, India and China which can also be called the BRIC
countries have been able to provide major growth opportunities to Adidas in the industry. The
value of Chinese market has started rising in the last few years due to the Eurozone based
crisis that has taken place. Adidas has a higher share in the Indian market in comparison to
Nike which is the closest competitor (Schlegelmilch 2016).
Adidas can thereby aim at increasing its operations in Asia in order to take advantage
of the share that has already been gained. A leading position has already been held by Adidas
in India based on the global sportswear based industry. The strong position that has been

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developed by Adidas in the sportswear industry of India can be improved with the help of its
products. The market shares of Adidas and Nike in China are quite close and this is
considered to be a major factor that has been able to influence the operations of Adidas.
Adidas can therefore aim at increasing the levels of awareness related to the products in the
sportswear based industry. The sportswear based market of Asian countries will be able to
provide effective levels of opportunities of growth to Adidas (Sharma 2017).
The organization will be able to further enhance its position in the country by
increasing the levels of awareness among consumers. China has also been successful in
providing effective growth opportunities to Adidas and the organization can aim at increasing
the share that has already been gained in the industry. The apparel market of the United
States has been able to provide growth opportunities to Adidas. The share in the US market
has been increased by Adidas between the years 2009 to 2014. Adidas thereby needs to focus
on the dynamic parts of the market in order to operate in the industry and increase the levels
of revenues as well (Su and Tong 2015).
Ways by which Adidas can become No. 1 in the industry
Adidas has been able to maintain a profitable position in the industry with the help of
its social media based strategies and products. The organization has however not been
successful in improving its position in the industry as compared to its biggest competitor
Nike. The strategies that have been implemented by Nike in different countries or regions
have been able to play a major part in the growth of leadership position in the industry on a
global basis (Wang and Shen 2017).
The most important part of the success of Nike in the industry is based on the social
media based strategy, the channels of distribution and the innovation in different products as
well. The global apparel based industry has been affected by the proper operations of two

10ADIDAS CASE STUDY ANALYSIS
major organizations namely, Adidas and Nike. The operations of Adidas in the year 2010 to
2011 had been able to cope effectively with the economic crisis that has taken place. On the
other hand, the levels of weakness of Adidas had been quite high in the key market that is
based in Europe in comparison to Nike (Su and Tong 2015).
Adidas had also faced major issues based on sentiments of the consumers in Russia in
the year 2013 and 2014. The retail based network that has been developed by Nike has a
major negative impact on the operations of Adidas and the levels of profitability as well.
Adidas however needs to implement different strategies in order to improve its position in the
global sportswear and apparel based industry (Pope and Nauright 2016). The different
recommendations that can be provided to Adidas in order to operate profitably in the industry
are as follows,
Adidas needs to develop a highly efficient retail based network in order to
compete with Nike on a global basis. Adidas has been dependent on the
wholesale sales for most parts of revenues that have been earned in the
industry. Nike has been able to develop a leadership position in the industry
with the help of proper retail strategies and networks which have been
developed (Lim, Kim and Cheong 2016). The retail sales can play a key role
in the ways by which Adidas can increase the levels of presence in the
industry. The organization will also be able to reach the consumers faster with
the help of proper retail sales. The distribution network based on retail sales is
highly important for the ways by which the organization is able to reach
higher number of customers in different countries or regions (Hayes and
Venkatraman 2016).
Adidas also needs to improve the social media based strategies in order to
communicate with the customers in an effective manner. This will help the

11ADIDAS CASE STUDY ANALYSIS
organization to provide the high levels of experiences to the customers like the
experiences that are provided by Nike. The experiences that provided by Nike
to the customers have been able to provide a different position to the
organization. This factor can be taken into consideration by Adidas in order to
understand the requirements and the demands of the customers (Pope and
Nauright 2016).
The demographic factors of the consumers are highly relevant for the ways by
which Adidas will be able to analyse the needs and demands. The age levels of
the consumers need to be considered in order to decide the ways by which the
organization can offer the suitable products to consumers. The age based
factors are able to affect the ways by which the organization can develop the
products based on demands of the consumers (Park, Ahn and Lee 2015).
The development of new products is another major strategy that can be
implemented by Adidas in order to increase the levels of revenues and
profitability in the industry. New product development will play a main part in
increasing the revenues of Adidas in the global sportswear and apparel based
industry as well. The increase in product portfolio is considered to be a major
factor that has an impact on the levels of profitability in the industry (Wang
and Shen 2017). Adidas can aim at developing different types of health and
protein based drinks which will be useful for the health conscious consumers
and the athletes as well.
Adidas has been able to operate in different countries or regions in a profitable
manner. The organization has been able to provide tough competition to the leader Nike. The
most effective operations of Adidas have been in its home country Germany. On the other
hand, it has not been able to provide huge competition to Nike in some of the countries. The

12ADIDAS CASE STUDY ANALYSIS
recommendations that have been provided can improve the operations of Adidas and future
growth in the global sportswear and apparel based industry (Molinillo, Ekinci and Japutra
2016).

13ADIDAS CASE STUDY ANALYSIS
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