Analysis and Comparison of Nike & Adidas: A Business Report

This report provides a comprehensive analysis and comparison of Nike and Adidas, two leading companies in the sports shoe industry. It begins with an executive summary outlining the report's focus on the value propositions of Adidas and its market position relative to Nike. The report delves into the perceived values of sports shoes, examining both the benefits and sacrifices associated with purchasing them. The Means-end Model is used to analyze Adidas's value proposition, and a detailed comparison between Adidas and Nike is presented, highlighting their core values, marketing strategies, and market share. Benchmarking of the value propositions is also included. The report also suggests new value propositions for Adidas to improve its operations and revenues, alongside an implementation plan and marketing plan for these new propositions. The report concludes by emphasizing the potential for Adidas to enhance its market position through strategic adjustments. References are provided at the end.

Running head: ANALYSIS AND COMPARISON OF NIKE & ADIDAS
ANALYSIS AND COMPARISON OF NIKE & ADIDAS
Name of the Student
Name of the University
Author Note

1ANALYSIS AND COMPARISON OF NIKE & ADIDAS
Executive Summary
The analysis in the report is based on discussion related to the value proposition of Adidas
and the market position of the company. The value perception and market position of Adidas
is compared to its biggest competitor Nike. The analysis has depicted that Nike has held the
strongest position in the market even after the improvement shown by Adidas in the recent
years. New value propositions are suggested for Adidas which will help the company in
improving its operations and revenues as well. The implementation plan for the new value
propositions are also discussed and suggested in the report. The report has been concluded by
stating that Adidas can improve its market position by changing some of its operations and
values.

2ANALYSIS AND COMPARISON OF NIKE & ADIDAS
Table of Contents
Introduction....................................................................................................................3
Perceived values of the sports shoes..............................................................................4
The Means-end Model is used for the value proposition analysis of Adidas............6
Comparison of the value proposition of Adidas and Nike.............................................7
Benchmarking of the value propositions..................................................................11
Creation of new values for Adidas...............................................................................11
Implementation plan of new value proposition for Adidas......................................13
Marketing plan for Adidas.......................................................................................13
Conclusion....................................................................................................................14
References....................................................................................................................16

3ANALYSIS AND COMPARISON OF NIKE & ADIDAS
Introduction
Customer perceived value for a particular organization is an important factor that is
related to the marketing plans. The value of a particular product or an organization is mainly
based on the ways by which the products satisfy the needs of the customers. Customers are a
major part of the marketing plans and activities of the organization and they are able to
decide the value of the organization. Extensive research is conducted by the companies so
that they can understand the needs and desires of the customers and design their products
accordingly (Arslanagic-Kalajdzic and Zabkar 2015). Value proposition is the comparison
between the benefits offered by the products of the company and the amount of money paid
by the customers. The companies tend to use different advertising techniques so that they can
enhance the value of the brand and create place for the brand in the market. The marketing
messages are delivered by the organization for fulfilling various objectives and with the help
of various media (Bowen and Chen McCain 2015).
This report will be based on the analysis of the value proposition Adidas and
comparison of the value propositions with those of Nike which is the closest competitor of
the company. The perception of the customers towards the brand will also be analysed and
new values will be proposed.

4ANALYSIS AND COMPARISON OF NIKE & ADIDAS
Perceived values of the sports shoes
Benefits of Sports shoes Sacrifices of buying sports shoes
Convenience or availability –
 The wide range of products are
suitable to satisfy the needs of the
customers.
 Considerable amount of outlets in
the countries.
 Easy to use for all types of
customers who are concerned about
fitness.
Monetary –
 The costs related to the purchase of
the sports shoes.
 The costs incurred to travel to the
stores of the companies.
Monetary –
 The prices of the shoes are
affordable for a varied range of
customers.
 Reward schemes and discounts
provided to the customers.
Effort –
 The time required to visit the stores
and choose from the various
products.
 Understanding self needs and then
purchasing the suitable product
(Bricci, Fragata and Antunes 2016).
Quality –
 The products of the sports shoe
companies are certified by various
quality standards.
 The brand value of the companies
help in determining quality.
Health –
 Stress related to the inability of
purchasing the desired shoes due to
heavy crowd.
 The problems that can occur from
the bad quality or harmful products.
Social –
 Social status is related to the
association of big brands like
Adidas.
 Increase of self-esteem of the buyers
who purchase products of big
brands.
Social –
 The stigma related to the purchase of
the cheaper items of the same
quality.
Opportunities –
 The unavailability of opportunity to
buy products with have high
demands (Cossío-Silva et al. 2016).

5ANALYSIS AND COMPARISON OF NIKE & ADIDAS
Adidas is a multinational organization which was founded in the year 1924 and the
headquarters of the company is located in Herzogenaurach, Germany. The company mainly
operates in the designing of shoes, accessories and clothes. Adidas is considered to be the
largest sportswear manufacturing company in Europe and it holds the second position in the
world. The belief among the customers of Adidas is that the meaning of the term is “all day I
dream about sports”, however, the actual meaning of the word according to the company is
different and it is adopted from the name of the founder, Adolf Dassler. The brand perception
of the sports shoes division of Adidas is related to its concept of cutting edge soccer (Adidas-
group.com 2018).
The company mainly focusses on the field to improve the brand and strengthen its
position. An important feature of Adidas is that they produce the most lightweight material
which is used for the manufacture of footwear products. The innovative benefits of Adidas
are the lethal spins that are manufactured for the soccer cleats. The major difference or
benefit that Adidas holds in the market is the perception of the brand in the market. Adidas
had attached a tiny chip in their TECHFIT compression top which was able to capture the
data like, distance, speed, heart rate, field position and acceleration. This was then used by
the coaches so that they can improve the performance of the players in the field (Bricci,
Fragata and Antunes 2016).

6ANALYSIS AND COMPARISON OF NIKE & ADIDAS

7ANALYSIS AND COMPARISON OF NIKE & ADIDAS
The Means-end Model is used for the value proposition analysis of Adidas
This model can be used to relate the quality, price and value of the products
manufactured by Adidas. The model permits the companies to correlate the concepts related
to perceived quality, perceived value and price from the perspective of the customers.
Figure 1 – Source – Created by author
The attributes of the company related to the pricing strategy and the customer value
are analysed with the help of this model. The value of the products of a company are decided
by the customers based on the intrinsic and the extrinsic attributes. The major driving factor
of the customers for purchasing Adidas sports shoes can be divided into extrinsic attributes
which include, the positioning of the brand in the market, the advertisement policies. The
intrinsic values of the other hand consist of the quality of the shoes, the features provided, the
packaging (Chen 2015).
Extrinsic
Attributes: Attractive
advertisements and holds
the first position in Europe.
Intrinsic Attributes: High
Quality, affordable prices,
customers get value for
money
Objective Price
Price
Intrinsic Attributes:
Attractive packing,
recyclable packing and eco-
friendly
High
level Abstractions
Perceived Quality Perceived Value
Purcha
se
Perceived
Monetary Price
Perceived
Sacrifice
Perceived Nonmonetary Price

8ANALYSIS AND COMPARISON OF NIKE & ADIDAS
The extrinsic attributes of Adidas are related to the second position of the brand in the
whole world in terms of its sales. The advertisement policies of Adidas are also quite
effective for the company so that it can attract the customers towards the brand. The
collaboration of Adidas with rapper Kanye West has been able to elevate the perception of
the brand in the market. The intrinsic attributes of the brand are related to the quality of the
sports shoes manufactured by the company. The innovative products of Adidas are important
intrinsic attributes of the company. The different products of the company include, 3D
printed soles. Sneakers manufactured from recycled plastic, leather uppers and many more.
The intrinsic attributes of Adidas are quite strong and this will improve the perception of the
brand in the industry (Cossío-Silva et al. 2016).
Comparison of the value proposition of Adidas and Nike
The core values of Adidas are related to the principles of conduct and the ethics that
guide the shape of the company and govern the ways by which the company conducts with
the other companies in the business world. The core values of Adidas are derived from the
mission statement of the company. The core value of Adidas states that they are a global
organization and are environmentally and socially responsible to embrace diversity and
creativity. The creative and diverse nature of the company will help in providing financial
benefits to the shareholders and the employees. The four major parts of the core values of
Adidas include, performance, passion, diversity and integrity. Diversity has been a major part
of the value proposition of Adidas and they aim to deliver a wide range of products to the
customers (Floh et al. 2014).
The extrinsic factors of Adidas which include the advertising policies are a major
point of difference with its biggest competitor Nike. The association of the company with
celebrities were able to provide them the position of the top-selling shoe company in the

9ANALYSIS AND COMPARISON OF NIKE & ADIDAS
world. The flagship product of the company named Adidas Superstar was launched in the
market with low price and this enabled Adidas to attract investors and customers who were a
part of the Team Nike (Xu, Peak and Prybutok 2015). Adidas has gained huge popularity in
the market as it is being increasingly used by the soccer players in Europe and they have
become an athletic brand. The stock prices of the company have also risen in the recent times
and the stocks of Nike have suffered. The growth of Adidas in the core market areas has
made the company much more favourable for the investors as compared to Nike (Kang,
Alejandro and Groza 2015).
However, the other products of Nike have helped the company in holding its position
in the market. The latest and most recognised launch of Nike in the recent times is the Air
Jordan Space Jam 11 which is supposed to be Nike’s biggest launch. Many products
manufactured by the Nike company include the classic converse, Air Force 1 low and Chuck
Taylor All-Star Low. Nike still remains in the top position in the shoe manufacturing industry
in spite of the growth of their biggest competitor Adidas. The competitive position of Nike is
the highest in North America where they hold 50.8% of the total market share and Adidas
holds 7.4% even after its improvement (Kaura, Durga Prasad and Sharma 2015). Nike has
also been able to maintain a lead based on their revenues as the annual sales of the company
amounts to 32.4 billion dollars and the revenue of Adidas amounts to 20.6 billion dollars.
Nike has a high level of understanding related to the change in the market dynamics
in the digital arena and the changing ways of shopping done by the customers. Nike is
therefore taking much lesser time as compared to the other companies for bringing new
products into the market and this helps them in retaining the position as the market leader.
The other strategy of Nike to maintain its competitive position is related to the increase in the
growth of the number of outlets and e-commerce operations. As Adidas has been dominating
the soccer market, Nike has been a major player in the basketball market. This is the main

10ANALYSIS AND COMPARISON OF NIKE & ADIDAS
reason why the success and growth of Adidas in the industry did not affect the growth rate of
Nike (Nike.com 2018).
The reason behind the success of Nike in the basketball business are the sponsorships
that they have of the English and the Brazilian National teams. Basketball has been the base
of Nike’s success from its inception and they continue to make significant growth in the
market with the help of this factor. The integrity of the Air Jordan sneakers was lost many
days ago, however, these shoes are still in demand and the customers spend huge amount of
time during the purchase of these products (Zakaria et al. 2014). The debt position of Nike is
also better as compared to Adidas and the company generates cash flow which much higher
as compared to that of Adidas. Nike is also cheaper than Adidas from the point of view of the
investors. The recent success of Adidas is mainly related to the changes in the fashion choices
of the customers and the increasing popularity of the lifestyle related products. Adidas has
however gained a lot in the recent times due to the ways by which the analysts have
downgraded Nike in the recent times (Kim et al. 2015).
The major risk that is being faced by Adidas due to its reliance on the fashion
products is the restriction towards the growth of the company. The durability of Adidas and
the power of pricing mainly relied on the sponsorships that were provided to the sportspeople
and not fashion stars. This change of reliance of Adidas on fashion products from sports
related products can affect the future sales of the company (Kumar and Reinartz 2016).
Nike and Adidas have been popular names in the sportswear and streetwear products
and they have also been biggest competitors of each other for many years. The two
companies have been fighting the battle to become the more superior brand in the market.
The two organizations have made huge contributions in the sneaker and sportswear market by
introducing many new and innovative products. Both Nike and Adidas have been many

11ANALYSIS AND COMPARISON OF NIKE & ADIDAS
significant partnerships in their lifetime. Adidas has made many collaborations in the last two
years and they are relying heavily of the young fans of the streetwear fashion. The company
has taken the hep of social media pages like Instagram to reach the young people (McMurrian
and Matulich 2016).
The various collaborations that have been made by Adidas in the recent times are with
Raf Simons, Palace Skateboards, Kanye West. The open partnerships created by Adidas have
helped in the improvement of the position of the brand and has created a positive image in the
industry. Adidas has been increasing the ties with many famous Japanese names like, White
Mountaineering, kolor, Yohji Yamamoto (Zhang et al. 2016). On the other hand, Nike has
always tried to make ties with the sportsperson or athletes. The company also uses the inputs
provided by these athletes so to create the innovative products for the customers. Nike enlists
partners and the partnership is much deeper as compared to normal collaboration. The
designer of their famous product UNDERCOVER was Jun Takashi who was a member of the
running crew in Tokyo (Nikhashemi et al. 2016).
The performance collection of Nike was clubbed together with fashion-friendly colour
blocking technology. Nike has been on the topmost position in the industry for a more than a
decade now and this was a result of their collaborations with the various athletes. Nike is
selective about their choice of partnerships and this has proved to be helpful for the company.
The impact of the selective partnership policies of Nike is much more as compared to the
huge number of collaborations that have been made by Adidas. Nike strives to create new
products and opens new avenues for the improvement of revenue and sales (Pérez and Del
Bosque 2015).

12ANALYSIS AND COMPARISON OF NIKE & ADIDAS
Benchmarking of the value propositions
This comparison shows that although Adidas has many more collaborations as
compared to that of Nike, the latter has been able to create more value with the help of their
selective collaboration techniques.
Creation of new values for Adidas
The mission and marketing strategy model can be used for the creation of new values
for Adidas. This will help in the alignment of the new values with the expected value of the
customers (Piyathasanan et al. 2015).
NEW MISSION STATEMENT
To provide new and improved products to the
customers which are mainly related to sports.
To maintain the sports based and athletic image of
the company.
NEW OBJECTIVES
To add more products to their range along with the
present products.
To develop relationship with the customers and
understanding their needs.
NEW MARKET STRATEGY
To increase the reach and availability of their
products.
To become more selective towards the choice of
collaborations.
NEW MARKET PROGRAMMES
Maintain the affordable prices of the products and
try to improve the debt position of the company.
Maintain the durability of the products that are
supplied in the market.
Figure 2 – Source – Created by author
The new value propositions of Adidas are mainly related to the improvements that can
be made in the current operations of the company to match with its biggest competitor Nike.
MISSION
STATEMENT
OBJECTIVES
MARKET
STRATEGY
MARKETING
PROGRAMMES

13ANALYSIS AND COMPARISON OF NIKE & ADIDAS
The new value propositions are linked to the maintaining of the image of the company related
to sports which has changed recently due to their reliance on the fashion products.
 Adidas will increase their reach and availability in the market.
 Adidas will try to improve its debt position in the market so that the cash flows are
more than the costs.
 Adidas will maintain the customer relationship policies that it has established with the
help of social media.
 Adidas will become much more selective in collaboration and try to take inputs from
their partners regarding their operations and the product designs.
 Adidas will improve the pricing policies of their products so that they can fulfil the
needs and the demands of the customers easily.
 Adidas will be more committed towards their environmental responsibilities and try to
use sustainable and recyclable raw materials for the manufacture of raw materials.
 Adidas will improve their customer services by providing training to the employees.
 Adidas will improve their work culture so that the employees have the right balance
between their work and personal lives (Prasertchuwong 2018).
 Adidas will not only aim the young population by their products and offering, they
will increase the product range to cater needs of the customers of all the age groups.
Nike and Adidas are the two major players in the sports shoes industry and they are
the biggest competitors from the inception of both the companies. Nike has been the leader in
the market for many years and the value propositions of Adidas need to be improved so that
they can attain the topmost position in the market. The implementation of the new value
propositions that have been defined above will help Adidas to create a new market position
and gain more customers for the company. The management of Adidas needs to monitor the

14ANALYSIS AND COMPARISON OF NIKE & ADIDAS
implementation process so that Adidas can be successful in its endeavour (Prebensen, Kim
and Uysal 2016).
Implementation plan of new value proposition for Adidas
The implementation plan for new value proposition of Adidas will involve the
improvement of the marketing programmes and the marketing strategies formulated by the
organization.
Figure 3 – Source – Created by author
The major factors related to the changed value propositions of Adidas are the to cater
to the needs and desires of the customers. The promotional activities of Adidas need to be
improved by making collaborations with the athletes and sportspersons and take inputs from
them regarding the products. The product range can be increased by recruiting more
professionals in the production units and increasing their efficiency by providing adequate
training (Rahi 2016).
Marketing plan for Adidas
The 4 Ps of marketing can be used for creating the marketing plan for Adidas.
Marketing
strategy
Marketing
programme
Marketplace of
customers
The offered value ………………. Product policies
Pricing policies
Place or distribution
Promotions or marketing

15ANALYSIS AND COMPARISON OF NIKE & ADIDAS
Product – Adidas can add new products to its range which will cater the needs of the
sports people along with the fashion conscious youth. The customer base of the company will
increase in the process.
Price – Competitive pricing of the products is important for the improvement of sales
of the company. This will help Adidas to cater to the needs of the customers of all age groups
(Scherer, Wünderlich and Von Wangenheim 2015).
Place – The availability of Adidas is quite high, however they need to increase their
outlets and e-commerce presence so that the reach of the products can also increase.
Promotion – The promotional activities of Adidas have been aggressive in nature and
has been making noise in the market. However, the advertisements did not have much effect
on the target audience. Adidas needs to make collaborations with sports persons mainly and
take inputs from them regarding the design of the products (So, Danaher and Gupta 2015).
Conclusion
The value perceptions of the consumers have immense effect on the sales of the
company and the products that they offer. The report was based on the analysis of the value
perception of two strong organizations and biggest players in the market, Nike and Adidas.
The value perception of Adidas is analysed and then compared to the value perception of
Nike. The analysis has shown that Nike has maintained the topmost position in the market in
spite of the improvement made by Adidas in the recent time. This was possible due to the
unique value proposition of Nike and the effective advertisement policies as well. The report
can be concluded by stating that the position of Adidas in the market can be improved by
changing the value propositions of the company and further increasing the range of products.
The changes in advertisement policies are also necessary for the improvement of the sales
and revenue of Adidas. The service provided to the customers also has an effect on the value

16ANALYSIS AND COMPARISON OF NIKE & ADIDAS
of the company as perceived by them. This will help the company in improving its position in
the market.

17ANALYSIS AND COMPARISON OF NIKE & ADIDAS
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20ANALYSIS AND COMPARISON OF NIKE & ADIDAS