BUS100 Final Project: Adidas Marketing Analysis in China

This report provides a comprehensive marketing analysis of Adidas, focusing on its operations within the Chinese market. The analysis begins with an introduction to Adidas, its logo, and consumer profiling, specifically targeting millennials and Generation Z. The report then delves into Adidas' internal environment, including employee engagement, financial resources, and sustainable material usage. The external environment section examines key competitors like Nike and Anta Sports, along with the impact of globalization and technological advancements in China. Porter's Five Forces are applied to assess the competitive landscape. A SWOT analysis is presented, followed by an examination of customer experience, including pain points and happy points. The report concludes by addressing the impact of the COVID-19 pandemic on Adidas' sales in China and offers recommendations regarding pricing strategies and market segment expansion. References are provided to support the analysis.

MARKETING ANALYSIS OF
ADIDAS
BY

INTRODUCTION OF ADIDAS
• ADIDAS AG IS ONE OF THE MAJOR MULTINATIONAL ORGANISATION IN THE
SPORTS INDUSTRY HAVING ITS HEADQUARTERS IN HERZOGENAURACH,
GERMANY (ADIDAS-GROUP.COM).
• THE COMPANY DESIGNS SHOES, ACCESSORIES AND CLOTHING.
• IT IS THE SECOND LARGEST SPORTSWEAR COMPANY AFTER NIKE AND IS THE
LARGEST COMPANY IN EUROPE (ADIDAS-GROUP.COM).
• ADOLF DASSLER STARTED THE COMPANY AT HIS MOTHER’S HOUSE WHERE
HIS BROTHER RUDOLF JOINED HIM IN THE YEAR OF 1924 (ADIDAS-
GROUP.COM).

ADIDAS LOGO
• THE DISTINCTIVE LOOK OF THE COMPANY LOGO HAS ALWAYS WORKED FOR THEM AND
CONSUMERS CAN EASILY RECOGNISE THE BRAND FROM THE LOGOS.
• THE UNIQUE AND SIMPLISTIC STYLE CREATED BY THE COMPANY HAS LED TO THE
ACCOMPLISHMENTS OF THE COMPANY (ROGOZA).
• THE LOGO THREE BARS DEPICT A MOUNTAIN AND CHALLENGING THE CONSUMERS TO
PUSH THEMSELVES TO THEIR LIMITS.
• THEREFORE, THE LOGO IS AN INSPIRATION TO ALL ATHLETES WHO FACE CHALLENGES
TO OVERCOME STEEP OBSTACLES AND THE COMPANY WANTS TO CONTRIBUTE TO THE
WELL-BEING OF ATHLETES BY SUPPORTING TO ACHIEVE SUCCESS (ROGOZA).

HOFSTEDE’ FORCES

CUSTOMER PROFILING
• IN TERMS OF CONSUMER PROFILING, ADIDAS HAS TARGETED TWO CONSUMER SEGMENTS
IN THE GLOBAL MARKET WHICH MAINLY COMPRISES OF THE MILLENNIALS AND THE
GENERATION Z.
• THEREFORE, ADIDAS MAINLY FOCUSES ON DEMOGRAPHIC AND PSYCHOGRAPHIC
SEGMENTATION OF THE GLOBAL POPULATION TO SELECT THEIR TARGET CONSUMERS
(CAMILLERI).
• .EVEN THOUGH, THE COMPANY OFFERS THEIR PRODUCTS TO DIVERSE RANGE OF
CONSUMERS IN THE MARKET BUT RECENTLY THEY FOCUS ON ATHLETES BETWEEN THE AGE
GROUP OF 20-29 AND 14-19 AS THESE CONSUMERS ARE STRONGEST SEGMENT FOR
IMPROVING THEIR MARKET SHARE.

INTERNAL ENVIRONMENT
• THEY FOCUS ON RECOGNISING THE VALUE OF THEIR EMPLOYEES SO THAT THESE EMPLOYEES
CAN ACHIEVE THEIR ORGANISATIONAL OBJECTIVES. THEREFORE, THEY HAVE SIGNIFICANTLY
FOCUSED ON EMPLOYEE ENGAGEMENT AND TALENT MANAGEMENT.
• THE FINANCIAL RESOURCES OF THE COMPANY ARE THE PRODUCT SALES AND THE LICENSE
SALES WHICH CAN BE CONSIDERED AS THE REVENUE STREAMS FOR THE COMPANY.
• THE COMPANY FOCUSES ON USING SUSTAINABLE MATERIALS SUCH AS RECYCLED POLYESTER,
“BETTER COTTON”, RECYCLED RUBBER, RECYCLED NYLON, TENCEL, ALGAE-BASED EVA,
RECYCLED THERMOPLASTIC POLYURETHANE (TPU), AND WATER-BASED POLYURETHANE (PU)
FOR DEVELOPING THEIR PRODUCTS (ADIDAS-GROUP.COM).
• ROLE MODEL LEADERSHIP WAS USED TO DEVELOP AN EXTENDED LEADERSHIP GROUP FOR
SUPPORTING THE ACTIVITIES IN DIFFERENT COUNTRIES AND THE COMPANY ALSO DEVELOPED
TRAINING AND DEVELOPMENT PROGRAMS FOR MANAGEMENT IN THE GLOBAL COUNTRIES.

EXTERNAL ENVIRONMENT
• NIKE AND ANTA SPORTS ARE THE BIGGEST COMPETITORS OF ADIDAS WHERE NIKE IS THE
MARKET LEADER AND ANTA SPORTS IS IN THE THIRD POSITION (ISPO.COM).
• NIKE AND ADIDAS ARE DOMINATING THE MARKET IN CHINA BUT THERE ARE OTHER LOCAL
COMPANIES JOINING THE COMPETITION SUCH AS ANTA SPORTS, X-TEP, 361 AND LI NING
(ISPO.COM).
• THESE LOCAL BRANDS BELONG TO THE MEDIUM SIZED CITIES AS THE PREMIUM BRANDS ARE
STRONG AND IT IS NOT POSSIBLE FOR CHINESE COMPANIES TO ENTER THE PREMIUM SEGMENT
WITH THEIR OWN BRAND.
• GLOBALISATION HAS CHANGED THE WAY COMPANIES OPERATE IN CHINAS AS IT ONE OF THE
FASTEST GROWING AND LUCRATIVE MARKETS IN THE WORLD.
• THE TECHNOLOGICAL SUPREMACY IN CHINA OFFERS ADIDAS THE OPPORTUNITY TO REDUCE
THEIR PRODUCTION COST SIGNIFICANTLY AND USE SUSTAINABLE SOURCING TO BE A SOCIALLY
RESPONSIBLE COMPANY.

CONTD.
• CHINA HAS A FREE TRADE ENVIRONMENT WHICH IS OPEN TO FOREIGN
DIRECT INVESTMENT AND THE GOVERNMENT HAS DEVELOPED NORMS TO
PROMOTE THE ARRIVAL FOR MULTINATIONAL COMPANIES TO IMPROVE THE
GROWTH OF THE ECONOMY AND PROVIDE BETTER JOB OPPORTUNITIES TO
PEOPLE IN THE COUNTRY.

SUPPLY CHAIN

PORTER’S FIVE FORCES
• ADIDAS IS THE SECOND LARGEST AND POPULAR BRAND IN THE SPORTS MARKET WHICH IMPLIES THAT THE BARGAINING
POWER OF THE CONSUMERS ARE LOW TO MODERATE.
• THE BARGAINING POWER OF THE SUPPLIERS IS RELATIVELY LOW AS ADIDAS CONSISTS OF LARGE NUMBER OF SUPPLIERS
AND IN ASIA THE COMPANY HAS 79% SUPPLIERS.
• THE LEVEL OF COMPETITIVE RIVALRY IN THE INDUSTRY IS HIGH DUE TO THE PRESENCE OF LARGE NUMBER OF BRANDS
IN THE MARKET.
• CHINESE MARKET INCLUDES BOTH LOCAL AND INTERNATIONAL BRANDS WHICH MAKES THE COMPETITION TOUGH FOR
ADIDAS AND AS SMALLER COMPANIES ARE PILING UP IN THE INDUSTRY, IT IS EXPECTED TO LEAD TO SATURATION WHICH
MAY AFFECT THE BUSINESS.
• THE THREAT OF SUBSTITUTION IN THE MARKET IS LOW AS THE NUMBER OF SUBSTITUTES ARE MINIMUM IN THE MARKET.
• THE THREAT OF NEW ENTRANT IN THE MARKET IS RELATIVELY LOW AS ALL THE MAJOR BRANDS ARE ALREADY PRESENT
IN THE CHINESE MARKET AND ALSO INCLUDES THE LOCAL POPULAR BRANDS. THE THREAT OF NEW ENTRANT IN THE
MARKET IS RELATIVELY LOW AS ALL THE MAJOR BRANDS ARE ALREADY PRESENT IN THE CHINESE MARKET AND ALSO
INCLUDES THE LOCAL POPULAR BRANDS.

SWOT
Strengths Weaknesses
 Brand value of the company is very high and it is second largest
company in China
 The brand is iconic and prestige is associated with it
 New product innovation
 Diversified product portfolio
 Effective supply chain management
 Strong financial position
 Strong distribution network
 Effective marketing strategy
 Supply chain shortage due to overdependence on foreign
suppliers
 Expensive products which alienates the low and middle income
group
 Limited brands which has restricted the company
Opportunities Threats
 Ecommerce is one of the biggest opportunity for Adidas
 Growing demand of sportswear in the global market
 Investing in smart materials
 Diversification into sports equipment

 Threat from smaller companies due to globalisation as they can
easily penetrate through online medium
 Loss of trademark
 Trade tensions between United States and China will affect the
operation of foreign companies in China where tariff and
currency war are major concerns.
 Global slowdown in economy