MKT 3130: International Marketing Strategy Analysis of Adidas

This report provides a comprehensive analysis of Adidas' international marketing strategies. It begins with a background of the company and its position in the market, followed by an external analysis using PESTLE and Porter's Five Forces frameworks, and an internal SWOT analysis. The report then delves into Adidas' segmentation, targeting, and positioning strategies, as well as its marketing mix. It highlights the company's success with the FIFA World Cup, its strong marketing infrastructure, and its positive market image, while also addressing weaknesses such as reliance on third-party manufacturing. The report concludes with recommended strategies for enhancing Adidas' competitive advantage in the global market. Desklib offers a wide range of solved assignments and past papers for students.

Running Head: INTERNATIONAL MARKETING 0
adidas
International Marketing
(Student Name)
2/9/2019

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Table of Contents
Introduction................................................................................................................................2
Background of the company......................................................................................................2
Position of Company..................................................................................................................3
External Analysis of Adidas.......................................................................................................4
PESTL analysis......................................................................................................................4
Internal Analysis of Adidas........................................................................................................5
Porter 5 analysis.....................................................................................................................5
SWOT Analysis......................................................................................................................6
Marketing Strategies of Adidas..................................................................................................7
Segmentation Targeting and Positioning................................................................................7
Segmentation......................................................................................................................7
Targeting.............................................................................................................................7
Positioning..........................................................................................................................8
Marketing Mix........................................................................................................................8
Recommended Strategies...........................................................................................................9
Conclusion..................................................................................................................................9

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References................................................................................................................................10
Introduction
Marketing strategy plays a significant role in the growth and success of the business. Most of
the leading companies majorly focus on their marketing strategies to grow in the market in a
more effective manner. It assists the companies to target their consumers as well as reach out
to the targeted consumers in an effective and efficient manner that help the company to
compete in the competitive market (Hawkins and Mothersbaugh, 2010). The international
market has a huge scope that helps the companies to target the consumers at maximum
consumers. The international market provides huge business to the companies that enhance
the level of completion at the global level. The sports industry has a huge competition in the
market that makes the companies make their marketing strategies more strong to compete in
such a competitive market (Morgan et al., 2018). One of the leading company Adidas has
continued to make their presence in the market that felt like a very strong player in the sports
shoes as well as the apparel industry (Brown and Brison, 2018). The strong marketing
strategy of Adidas made the company stronger as a comparison to its competitors. They have
spread their business at an international level for which the company has adopted effective
marketing strategies to enter the international market. It made the company more successful
at a global level. In the recent scenario, the company is well-known in the sports industry at
the international level (Reilly and Larya, 2018).
In the following part, there will be a detailed analysis on the leading company Adidas, the
way they adopted the marketing strategies at the international market and the way they can

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enhance their strategies in a more effective manner to enjoy a competitive advantage in the
market.
Background of the company
The company was promoted in the year of 1949 by Adolf as well as Ruldi Dassler. The name
of the company is based on the founders “Adi” from Adolf and “Das” from Dassler. The
name of the company was changed from Adidas-Salomon to Adidas AG in the year of 2006.
Headquarter of the company is located in Herzogenaurach in Germany as well as
approximately 39,596 individuals are working under such a company.
It is one of the largest sportswear manufacturing companies in Europe as well as the second
biggest sportswear manufacturer at the global level (Frey, Bass and Nelson, 2017). Adidas is
majorly engaged with the sports industry in which they are offering a widespread selection of
sports equipment t the consumers. The company has segmented its market into three divisions
Sports Heritage, Sports Style, as well as Sports Performance. They have extended their
existence in the US, Europe as well as Asia with other 150 continents. The company is
producing almost all kind of products for athletes, swimming, golf, bodybuilding, football, as
well as boxing. They make all kind of products for their consumers to provide the, more
comfort as well as confidence that they are wearing reliable products which help in enhancing
their performance (Laluyan, Pangemanan and Worang, 2017).

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Position of Company
The company is enjoying its position as the second largest producer of footwear, apparel,
equipment, as well as gear at the international level. The company has a group of strong
brands such as Reebok, Adidas, as well as Taylor that helped the company to build its leading
marketing position at the global level. The total revenue of the company in the financial year
of 2010-11 was approximately 11 million with a net profit of 245 million. The major success
step for the company was FIFA world cup campaign due to the reason of wide coverage
media across 190 countries with an audience reached approximately 26.3 billion. Adidas was
the official sponsor of FIFA 2010 world cup. They have achieved huge success from such a
step (Jayawardhana, 2017).
The company has holds a share of 22% of the marketplace split in the cut-throat market. The
company has shaped a characteristic representation in the cleverness of the possible
customers from side to side aiming on the superiority of the manufactured goods from a
dependable trade name. The company is able to support their trademark soul. However, the
company has defeated by Nike in term of novelty. The company would not able to bring in
innovative as well; as advanced products in the marketplace at an instance like Nike that
made Nike more competitive than Adidas. The position of Adidas come after Nike in the
market place in term of fashion as well as sales and profit as well (Huttner and Brem, 2017).

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(Source: Adistats, 2013)
External Analysis of Adidas
PESTL analysis

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(Source: Marketing Tutor, 2018)
Political Analysis
The company enjoys the presence in the entire market of Europe after their acquisition of
Reebok in the year 2006; the company has also created inroads in the US as well. Adidas has
also expanded its business in Asia as well as Latin America in which the following sphere
remain steady as they are also very self-governing setups. It implies that the administration
has not imposed the unnecessary restriction that provides a positive environment to the
company in a more effective manner.
Economic
The condition of economics has a great impact on the sale as well as on the day to day
working of Adidas. The purchasing power, price rises rate, buy-out, and consolidation greatly
affected the revenue of the company. World economy suffered from the biggest recession in
recent duration with the descend of the Lehman Brothers as well as the trembling of the
whole fiscal sectors. At such a situation, most of the people lost their jobs. The purchasing
power of the consumers greatly affected all over the world especially in Canada and the US
that affected the net earnings of the company at a greater level (Cruz and Karatzas, 2016).
Social
It comprises of the belief, culture, psychographics, demographics, spending habit as well as
the lifestyle of the targeted consumers. Adidas used such knowledge in an effective manner.
Their well-known motto “Impossible is Nothing” capture it wonderfully as it helps the
company to mixed with the youth at the global level. The company targeted targeting their
consumers through the source of online that made the company more competitive as we as

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promote the same by offering various discounts to the consumers to make them feel for
satisfied.
Technological
The continuous use of technology as well as innovation is one of the immense crucial in the
manufacturing. The company uses the knowledge signify a number of the explicit
enhancement such as greater operation routine, extra comfort, moderate with more support,
the improved grasp of the floor decline in the cost of industrialized or the consumer's prices.
The unique perforated expertise of Geox claims that it helps the shoe to respire and overcome
the issue of perspiring foot is one of the extraordinary achievements of the company.
Legal & Regulatory
The legal and regulatory affected the branding as well as advertisement significantly. The
company needs to create certain that everyone their promotions would able to provide a
factual depiction of the merchandise that were being advertise as they cannot rupture the law
of the Trade Descriptions Act. They need to create certain each and every one of their retailer
have enough information of the Adidas goods in command to comply with the Trade
Descriptions Act due to the reason if Adidas would not give the retailers sufficient
information about the products then it would be possible that they offer wrong information
about the manufactured goods which is against the law of Trade Descriptions Act (Shtal et
al., 2018).
Internal Analysis of Adidas
Porter 5 analysis
Barriers of Entry

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The brand loyalty is extremely high as well as the economy if extent and range also restricted
the admission for the minute troupe as the business is conquered by the hardly any leading
companies who reap enormous reimbursement form the volume as well as supply chain
integration. Therefore, the barriers to entry are high to moderate in such an industry.
Bargaining power of consumers
The bargaining authority of consumers is high owing to the reason the switching cost for the
consumers is low that provides an option for them to switch for other brands. The consumers
have easy access to the products through online shopping as well.
Bargaining Power of Suppliers
The bargaining authority of the supplier is little in such business due to the reason; the
unprocessed resources used in such business are cotton, rubber, as well as froth. Switching
between the suppliers is also very high in the industry. Therefore, the power of suppliers is
very low, the suppliers work at the norms as well as process governed by the big players of
the industry.
Threat of Substitute
The threat of substitution at the international market for the company is very small as it is not
potential for sneakers to be interchanged by heels or any other fashion shoes. Likewise, stuck
between running and tennis shoes, there would not be a possibility of any substitute (Mahdi et
al., 2015).
Rivalry among the existing competitors
The rivalry among the firms in such an industry is quite high as could be representing as
mostly being non-price. There is force competition between Adidas and Nike especially in

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shoes such as Geox, Ecko, and Rockport also compete in the niche segments. Nike creates
great competition for the company due to their high level of innovation in the market that
affected the profit margin of the company at a greater level (Ageron, Gunasekaran and
Spalanzani, 2012).
SWOT Analysis
(Source: Shata, 2013)
Strength
 Success from FIFA World Cup: the company has achieved the biggest success from
the FIFA cup in the year 2010. Adidas had a great presence at the event with the
teams of twelve that also include the host nation in the finals.
 Strong Infrastructure of Marketing: the company targets its consumers through strong
marketing strategies being adopted by the company that help them to compete in the
competitive market.
 The positive image in the market: the company has a positive market image as they
have gained a strong market position in Japan, Germany, Europe, as well as France.

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The company has also gained 20 percent share in the athletic footwear market of the
US.
Weakness
 Relying on the third party manufacturing: according to the researchers, the company
has outsourced almost 95 percent of their production on the third party suppliers to
minimize their production cost that is majorly located in Asia.
 The company has a vast portfolio of products but still, they highly depended on soccer
shoes as compared to Nike (Holtbrugge and Schuster, 2017).
Opportunities
 The growth of footwear at the global market: the market of footwear at a global level
is expected to grow by four percent which will reach approximately $300 billion in
the next five year. Therefore, it is the opportunity for Adidas to expand their business
in a more effective manner at a global level.
 Use of the internet: the consumers are majorly preferred to purchase the product from
online. It gives an opportunity to the company to use the platform to target their
consumers in a more effective manner.
Threat
 Bargaining power of Consumers: in the recent scenario, the bargaining power of the
consumer's increases day by day due to low switching cost that increases the threat to
the company to deliver a quality product at a reasonable price that affected on their
margin at a greater level.
 Competition: it is one of the major threats for the company for which they have spent
a huge amount on competing their competitors. It increases the cost to the company as

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well as enhances the fear among the company for competing their competitors (Byun,
2015).
Marketing Strategies of Adidas
Segmentation Targeting and Positioning
Segmentation
It is the price of dividing the mass market into the different group to target the consumers.
These are explained in below points:
 Geographic: Marketplace is spread into varied unit of place forexample as cities,
district, area, as well as country. The company operated in the metropolitan as well as
non-metropolitan cities.
 Behavioural: in such segment, the consumers are distributed in accordance with the
answer, attitudes as well as utilization of products such as brand freakier, athletes,
regular users, image seekers as well as a sports lover
 Psychographic: the consumers are divided according to the scrutiny of the diverse
personalities of every customer such as Achievers, Well-Experienced, Hard Workers
as well as Goal Achievers.
 Demographic: It is alienated keen on the segment that is majorly depends on the
changeable of earnings, gender, the existence of family, an era which includes
 Income level: $15000 - $80000
 Age between 14-35
 Gender: Both male and female
 Societal class: Lower, Middle, and Upper class (Baena, 2017).