Company Overview
Adidas is a well-recognized, distinguished company of athletic apparel and footwear corporation Its headquarters is located in Herzogenaureach (Adidas.co. 2023). It is the German manufacturer of athletic shoes and apparel, which is identified by its three-stripe trademark.
Industry sector
(Source: britannica.com., 2023)
Figure 1: Adidas logo
Adidas company belongs to the consumer and industrial sectors (Adidas.co. 2023). Recently, the company’s sales revenue has stood at € 750 million (adidas-group.com., 2023), which has increased over the previous year.
Organization size
In recent times, more than sixty thousand employees have been working for the organization, and there are more than 4000 stores worldwide (Adidas.co. 2023). Adidas operates in more than 160 countries. The company’s net worth is $20.19 billion (Sportsbrief.com., 2023).
Product range
Adidas includes shoes, accessories, beauty products, perfumes, and swimwear.
Target segmentation
Adidas targets the younger generation, willing to spend on fashion, to increase its sales rate. In their segmentation, income and age become the major factors for Adidas’s market segmentation.
Macro environmental analysis of Adidas
Political Factors
Internal trade agreements, labor laws, and product safety laws can affect Adidas’s business.
Economic Factors
Currency fluctuations, economic growth, the interest rate of products, consumer spending behavior, and emerging markets.
Social factors
Consumer fitness trends, the ever-changing preferences of consumers, corporate social responsibility, and the company’s brand reputation can impact the company.
Technological factors
Data analytics, logistics and supply chain optimization, AI in product designing, and digitalization (Saatchian et al. 2021).
Legal factors
Product quality standards, Intellectual property rights protection, Taxation, marketing, and trade regulations are the external factors of Adidas.
Environmental factors
The circular economy, the changing climate, conservation efforts, sustainable packaging.
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Porters Five Forces of Adidas
Threat of new entrants
It has been observed that the threat of new entrants is low for Adidas company, for which a new company can easily set up a business and be established like Adidas.
Threat of substitutes
In this segment, the threat of substitutes, which is high, has been explored. There are various alternative products available on the market that can replace Adidas’s products.
Bargaining power of customers
The bargaining power of customers is significantly high due to the various stores in which the customers can shift according to their preferences.
Bargaining power of suppliers
The bargaining power of the suppliers is low because there are many suppliers in the market.
Competitive rivalry
Adidas’s competitive rivalry is very high (Li, 2022).
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SWOT analysis of Adidas
Strengths
Innovation of different products, unstained brand recognition,strategic partnership, expanded network, and diversification of products (Saatchian et al. 2021).
Weaknesses
Small product lines, increasing market competition, excessive dependence on the sports markets, and supply chain shortages.
Opportunities
Utilization of new products, advanced materials, and presence of E-commerce platforms.
Threats
Financial downturn, Economic instability, fake products, and the dominance of suppliers.
VRIO analysis of Adidas
| VRIO analysis | |||||
| Competencies | Valuable | Rare | Imitable | organized | Competitive advantage |
| Product Quality | Yes | Yes | No | Yes | Sustainable competitive advantage |
| Production portfolio | Yes | Yes | No | Yes | High-competitive advantage (Pratama and Hisjam, 2022). |
| Consumer base and experience | Yes | No | Yes | Yes | Sustainable competitive advantage |
| Workforce and culture | Yes | Yes | No | Yes | High competitive advantage |
| Product innovation | Yes | Yes | No | Yes | Long-term competitive advantage (Crasto et al. 2020). |
Competitor analysis
Market position: Adidas is a well-renowned company engaged in providing high-quality athlete products at high prices to consumers. There are wide competitors who are challenging to grow the business of Adidas in the future. It has targeted only sports enthusiasts, amateur athletes, and professional athletes.
Competitors: The major competitors of Adidas are Nike, Puma, Reebok, Fils, and Callaway Golf (Geetha et al, 2020). Based on the perceptual map of Adidas, it can be evaluated that the vital or crucial competitors of Adidas include Nike, Puma, and Reebok, which are involved in providing qualified sports products at high rates, just like Adidas. Adversely, Fils is another substantial competitor that generally provides high-quality products at low prices to consumers. Hence, there is a huge chance of attracting consumers easily by this company. On the other hand, Callaway Golf became one of the companies engaged in providing low-quality products at high prices, for which it has less chance to grow its business compared to Adidas.
| Customer persona | ||
| Biography | Name: Stephen Johnson Age and Gender: 29 years old, male Job: Creative fabricator and a reputed athlete Qualification: Bachelor’s degree in advertising and PR Location: Los Angeles (CA) Family situation: Single Prototype: Uncomplicated advertising professional Languages known: English, German | |
| Goals | His goal is to acquire and win various awards in the athletes and advertising movement. He tends to build amazing customer relationships and look for more effective ways to work better. | |
| Values | ● Freethinker ● Search for the latest ideas ● Practical and uncomplicated ● Loves security and stable income | |
| Buying decision process | He always shows interest in searching for qualified products with reasonable prices. He believes in product recommendations from customers. He wants to buy or choose products based on the high rating criteria. Also, he likes to purchase discounted athletes’ products from online platforms. | |
| Motivation | He always motivated himself to do work by obtaining various awards from advertising campaigns. Also, this motivation has helped him to enhance and grow his performance in athletes and advertising campaigns. | |
| Digital presence | Highly active on social media platforms like Facebook, YouTube, and Instagram. Runs a YouTube channel and Facebook page on exercises and fitness. Uses Instagram to follow international athletes and upload reels on fitness moves. | |
Marketing Mix (4P’s)
Products
Adidas is involved in selling athletes’ products such as shoes, accessories, beauty products, perfumes, and swimwear.
Prices
Adidas has followed a competitive pricing strategy and a skimming pricing strategy. The average range of price of Adidas products is between Є90- Є200.
Places
Primarily, Adidas has been operating and selling its products through franchising and licensing offline across the Americas, Europe, Asia Pacific, Africa, and the Middle East. Adidas also sells products online through websites like Amazon, eBay, etc. (Majcen, 2020).
Promotion
Influencer marketing, sponsorship, and social media marketing have been highly prioritized as promotional strategies by Adidas (Zhu,2021).
Market position
The product, pricing, and place strategy of Adidas has assisted to dominate in the sportswear industry for a long time over competitors such as Nike, puma, reebok, etc. It has helped Adidas become the most preferred sportswear apparel brand across different parts of the world as athletes trust and feel comfortable with Adidas.
Target audience
The selected promotional strategies of Adidas have led to greater awareness in society and also influenced buying behavior and emotional decisions of consumers.
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References
Adidas.co. 2023. Adidas. https://www.adidas.co.in/
adidas-group.com., 2023. Adidas sales revenue. https://www.adidas-group.com/en/media/news-archive/press-releases/2023/adidas-reports-revenue-increase-in-the-third-quarter-underlying-b/#:~:text=As%20a%20result%2C%20the%20company’s,first%20nine%20months%20of%202023.
britannica.com., 2023. Adidas logo. https://www.britannica.com/topic/Adidas-AG
Crasto, S.G., Kee, D.M.H., Xin, C.W., Juin, H.X., Man, L.K. and Pandey, D., 2020. Product innovation by Adidas Group through sustainability. Journal of The Community Development in Asia, 3(1), pp.1-7.
Geetha, S., Al-Khaled, A.A.S. and Fenn, C.J., 2020. The Intention of Purchasing Power Towards Adidas Sportswear in Klang Valley, Kuala Lumpur. Social Sciences, 10(9), pp.170-184.
Li, Z., 2022, April. The Analysis of the Reasons for the Success of the Under Armour Brand Based on “SWOT” and Porter’s Five Forces. In 2022 7th International Conference on Social Sciences and Economic Development (ICSSED 2022) (pp. 676-680). Atlantis Press.
Majcen, A., 2020. Adidas AG: powerful brand making strides in key markets (Doctoral dissertation).
Pratama, A.Z. and Hisjam, M., 2022. Comparative Study of Global Business Strategy: Lessons Learned from Excellent Sports-wear Companies (Nike and Adidas). In Proceedings of the International Conference on Industrial Engineering and Operations Management Istanbul, Turkey (pp. 3062-3071).
Saatchian, V., Azizi, B. and Talebpour, M., 2021. ADIDAS Sportswear Brand Popularity Model in Iranian Consumers. Sports Business Journal, 1(1), pp.163-177.
Saatchian, V., Azizi, B. and Talebpour, M., 2021. ADIDAS Sportswear Brand Popularity Model in Iranian Consumers. Sports Business Journal, 1(1), pp.163-177.
Sportsbrief.com., 2023. Adidas networth. https://sportsbrief.com/other-sports/29344-adidas-net-worth-how-adidas-worth-details-numbers/
Zhu, J., 2021. Analysis on Adidas Marketing Strategies in 4P Model. Scientific and Social Research, 3(5), pp.67-75.