Analysis of Adidas' Strategic Position and Future Recommendations

This report provides a comprehensive analysis of Adidas' strategic management, evaluating its current position and offering recommendations for future development. It begins with an executive summary and an overview of Adidas, followed by an analysis of the company's strategic position in the industry, including market share and Google search results. The report then delves into Adidas' strategic direction, examining the Ansoff matrix (market penetration, development, product development, and diversification) and the BCG matrix (cash cows, stars, question marks, and dogs). A critical evaluation of the company's strategy using the SAF framework (suitability, acceptability, and feasibility) is also included. Finally, the report concludes with recommendations for Adidas' board of directors, offering insights into the future development of the business strategy. The analysis highlights Adidas' strengths, weaknesses, and opportunities within the competitive sportswear market, providing a roadmap for continued success.

Adidas strategic management
1 2 / 1 5 / 2 0 1 9

Strategic management 1
Executive Summary
The report is prepared with the motive to analyse the strategic options that are present with the
Adidas Company. The findings of the report show that the company is leading in the market
comparing it with the competitors. Also, analysis of the strategy shows that the company adopt
diversification and market development strategy of Ansoff matrix. BCG matrix is also applied
which shows that the company need to focus on certain things. The evaluation of the strategic
option of market competition has been done which shows that the company should proceed as it
is feasible. In the end, the recommendations for the future actions of the company have been
provided to the board of directors of Adidas.

Strategic management 2
Contents
Introduction......................................................................................................................................3
Overview of Adidas.....................................................................................................................3
Analysis of the organisation’s strategic position in its industry......................................................4
Market share................................................................................................................................5
Google searches results................................................................................................................7
Analysis of the organisation's strategic direction............................................................................7
Ansoff matrix strategy.................................................................................................................8
Diversification strategy of Adidas...........................................................................................8
Market development strategy..................................................................................................9
BCG matrix..................................................................................................................................9
Critical evaluation of the organisation's strategy...........................................................................11
SAF Framework.........................................................................................................................11
Suitability...............................................................................................................................11
Acceptability..........................................................................................................................12
Feasibility..............................................................................................................................12
Conclusions....................................................................................................................................14
Recommendations..........................................................................................................................15
References......................................................................................................................................16

Strategic management 3
Introduction
The report aims to talk about the strategic options that are available to the business. The
assessment shows the evaluation of the present strategy of the business and as per the existing
strategy, some of the recommendations are provided to the board of directors as to the
development of the future business strategy. It is expected to make use of the same company that
was selected in assignment 1 that is Adidas Company. The report provides a study of strategic
position of business in industry. The position can be understood with the help of the KPI which
helps in comparing the same with the competitors. Further, there is a discussion about the
analysis of the strategic direction which has been done with assistance of the Ansoff matrix and
BCG matrix. The critical evaluation of strategies has been done with the help of the SAF model
for the Adidas Company. It has been found that the Adidas Company operates in the accessories
and apparel industry in which they try to encounter growing wants of clients. The competitors of
company are consists of VF Corporation, Nike, Under Armour and many others.
Overview of Adidas
Adidas is an MNC company that founded in Herzogenaurach, Germany as it enterprises and
manufacture shoes, clothing as well as other accessories. The company is major casualwear
brand in the market of Europe across world after Nike. The name Adidas is an abbreviation of
name of the originator who is Adolf (Adi) Dassler (Adidas, 2019). The company is largest in the
sportswear brand because of its strategies that help them in attaining the high growth in markets.
Analysis of the organisation’s strategic position in its industry
In industry, the company has formed a position which is followed by the use of different
strategies. The analysis of strategic position of business has been done with the help of KPIs

Strategic management 4
which are essential for comparing the performance of the organization with that of its main
competitors (Hill, Jones & Schilling, 2014). The position of the brand is founded on three
strategic options which include Speed, Cities and Open source. In this, the speed element shows
how the company deliver the products to their customers. The company always ensure that they
provide the best quality products at the best prices to their customers. The customers who order
the product from the company can easily get the same which shows the speed of the company
towards the brand.
On the other hand, the cities where the company sell its products bring the changes in the
perception, belief and buying decision of the brand. The company ensure that they remain easily
accessible for the customers which allow them a way through which they can form the high rated
position in the eyes of customers (Eden & Ackermann, 2013). Also, open-source is one of the
ways through which companies for their position in the market. Adidas has the open-source as it
allows the doors of the brand that invite athletes, customers and partners, to co-create the future
of the sport as well as the culture sports with us. Under Armour is one of the competitors of the
company who is going to grow in the market soon. The company make huge investment sports.
It has paid highest dollar for a line-up of world-class sportspersons across all main athletic
(Palmer, 2019).
The analysis of strategic position of business has been done with the help of KPIs which are
essential for comparing the performance of the organization with that of its main competitor
Nike has been done

Strategic management 5
Market share
Market share of the company is one of the major elements which are considered as one of key
performance indicators of business. In recent research, it has been found that Adidas Company
can perform effectively in their market shares and they can easily compete against its
competitors (Adidas, 2019). Adidas AG Company is thrashing Nike Inc. on Wall Street as per
the recent update. The company share has increased 21.87% so far in the current year while
comparing it the Nike it is just 16.92% (Mourdoukoutas, 2019). The comparison of the two
stocks is tricky and this is the fact that Nike has outstripped Adidas over the last three-year
period. The company lags behind its competitors over 5 years.

Strategic management 6
(Source: Mourdoukoutas, 2019)
The image given above shows the graph of the market share of the companies. The image shows
that Adidas is winning in terms of market share which reflects a rise in profit of the company,
high returns to the investors and many others. However, this has been found that in the year

Strategic management 7
2019, Nike gave the tough competition to their competitor Adidas in terms of market share
(Mourdoukoutas, 2019).
Google searches results
Adidas and Nike Company compete based on different elements. In terms of marketing, one of
the major key performance indicators is Google search results. It has been found that Adidas
Company is giving tough competition to its competitors. However, Nike wins this battle of
Google searches with approx. 3.78 trillion and on the other hand Adidas Company has Google
searches of 3.27 trillion (Mourdoukoutas, 2019).
(Source: Mourdoukoutas, 2019)
Thus, this shows that there is tough competition current in market and business deals with this
with the motive to form a strong position in the market.
Analysis of the organisation's strategic direction
This section of the report includes the analysis of business strategic direction which shows
methods which are used by the companies for the development shortly. The strategic direction of
the Adidas can be understood with the help of the different strategies which are given below: -

Strategic management 8
Ansoff matrix strategy
Ansoff market growth matrix provides the suggestion that the company efforts to produce to
depend on the components of the market new or the existing goods in the new or existing market.
The four major policies of Ansoff matrix are market penetration, market development, product
development and diversification (Bhasin, 2019). Adidas Company applies the different strategies
in the market so that they can attain the best position and can give tough competition to other
companies.
 Market penetration: - The strategy of the marketplace penetration is used by business
that has a product in the existence and who seeks for the growth in present market.
 Market development: - The firm wants the market development strategy as they target
the companies with the existing product in new market (Hussain, Khattak, Rizwan &
Latif, 2013).
 Product development: - The firm uses the product development strategy when they have
a decent part in the present market and they need to present the novel product which is
required for the growth.
 Diversification: - This strategy of Ansoff matrix is used by company when the product is
introduced in the new market.
Diversification strategy of Adidas
Adidas Company adopts the diversification strategy in the market which helps them to increase
the profitability in the market which is possible with the high sales volume that is obtained from
the new goods as well as new markets. The company is the global leader with a wide range of
product portfolio. The strategy of the brand is simple as they want to offer an extensive range of
products and services to their clients (Murdock, 2017). Currently, company offer a wide range of

Strategic management 9
products in the market that includes apparel, irons putters, golf balls, footwear and accessories
(Bhasin, 2019). This strategy of company allows them to meet the growing and diverse needs of
clients who are present in the market. Thus, by applying the strategy of the diversification
strategy, the company is offering high value to its customers who are present in the market.
Market development strategy
Adidas Company has adopted the market development strategy in which they target the new
market with the existing products (Johnson, 2016). It has been found that Adidas Company has
applied the market development strategy in which they have expanded their existing products in
the different market across the world due to which they were able to manage the brand loyalty in
markets. The company has a wide range of operations across the different areas of the world due
to which they have improved the position. Further, the company still have the opportunity to
expand the business in the developing market like Asian countries.
BCG matrix
It has been found that BCG matrix assist in determining strategic position and the upcoming
sequences of actions of the strategic corporate unit. Adidas Company applies the BCG matrix
that aids them to form the position in market. There is four major elements of the BCG matrix
are given below for the Adidas company (Adamkasi, 2019).

Strategic management 10
(Source: Adamkasi, 2019)
 Cash cows: - The cash cow element shows that product has high market share but low
market growth that worth that they are creating profit through transactions in current
market but it doesn't have the probable of additional development as well as growth
within the market (Mohajan, 2017). Adidas Company has some products that fall in the
cash cow segment which include clothing as well as apparels. Apparel and clothing
products of the company have a high market share. However, it has been found that there
is low market growth for these products.
 Stars: - This component of the BCG matrix include those products of the company which
have the high market share as well as the high level of marketplace growth which decline
in this category (Whitehead, 2015). It has been determined that the products are wisely
categorised for this as these products of the Adidas leads to the rise in the profit of the
company. The product of business that fall in this category is shoes. It has been found the
shoes provided by the brand are highly demanded in the market.
 Question Marks: - This category includes the products with the low market share but
also with the high market growth which shows that business will pay the amount for the
more strategic attention (Tan, 2019). It has been found that the equipment’s of sport falls
in this category. It has been found that the company need to focus on their segment for
attaining a high profit.

Strategic management 11
 Dogs: - This element shows that products include low market share and market growth.
The category of sunglasses and hats of the Adidas Company falls in the category of the
dogs (O'Brien, Parent, Ferkins & Gowthorp, 2019). There is less amount of selling of
these products and people don’t spend much amount on it. It has been found in the
research, Adidas Company is not successful enough in thrashing competition in this
range due to which they are still facing the struggle in this category.
Critical evaluation of the organisation's strategy
This section of report includes critical evaluation of business strategy of Adidas Company. The
analysis has been done with the help of the SAF framework (Grünig & Morschett, 2017).
SAF Framework
Suitability
It is one of the most important factors in the strategy of SAF is to determine that suitability of
Option. Adidas apply different sort of strategy, it helps in evacuating that strategy adopted by
company is suitable or not (Moulton & Sandfort, 2017). The strategic options that are present
with the company include the market competition options. In this, Adidas Company will perform
either mass marketing or niche marketing. In mass marketing, the company produce the products
on a large scale for all their clients irrespective of the segmentation of the market. On the other
hand, company produce products in the limited quantities category of customers. The company
applies mass marketing as the option in which they produce the products on a large scale for all
their customers. This helps them to meet the needs of the customer at a wide scope and can attain
more attention than their competitors. However, this strategy affects the company because they
are unable to provide the product to the special category customers as per their needs. If in case,