Category: Adidas

Introduction

The age of millennials is indeed a unique time, in which people live, evolve, and advocate for their self-identification. The central theme of the Yalla! Go For It campaign assigned by Adidas is primarily the representation of the true version of oneself as part of the social media society. I believe that social networking is mainly used to demonstrate a hyper-idealistic version of oneself that is not necessarily a true version. My campaign is targeted at the female population of the UAE region to reinforce the Emirati women and their uniqueness. For me, the most significant issue is the empowerment of women in the UAE who serve as a model the world should follow.

One of my intended goals is to choose the key hashtag associated with the campaigns headline and intertwined with its core idea. Therefore, the hashtag that will be incorporated in my campaign is #UNIQUEME. It is short and concise and reveals a strong concept that I aim to manifest in social media advertising. The decision to integrate these two inspirational words emanated from their meaningfulness and manifestation of crucial aspects of my life and, therefore, my identity. The decision to include the hashtag was based on its prevalence in todays world of social media. It plays an essential role in my life and the millennial generation in general. #UniqueMe so that sticks and stones will not break my bones, but words will never harm me, which is inspired by the song that symbolizes the liberty of choice.

The Background of the Campaign

Adidas is one of the major leaders on the market that pursues changing the future for young female athletes in key cities across the globe. Most importantly, the company addresses the barriers that forced women to drop out of the sport, such as a legacy of inequality and opportunity. In addition, Adidas pursues changing the lack of access, role models, as well as funding, and, thereby, building the womens future. As such, the company requires a long-lasting change concerning the mental and physical barriers that girls face, as well as the engagement of women into sports.

The Key Insights and Elements of the Campaign

Our generation is a unique and complex phenomenon, which is why the millennials are my target audience for this project. According to Barry, the modern consumer becomes more sensitive, sceptical, and complex (11). Thus, it is crucial to generate not only new ideas, but to focus on problem-solving approach, perceptual choice, and periodic reassessment (Bono 43). I want to create a campaign for Adidas based on promoting sports in the UAE for the female population, specifically those females who wear headscarves. The advertisement will be showcased in the most prominent areas where teenagers spend most of their time.

Thus, I chose public transportation as the aimed place for commercial, namely the female side of the metro, which is designed specifically for females with children. Concerning the fact that I sit along with other females on the metro, I consider it as a great advertising strategy for my campaign.

The critical insight of the Yalla! Go For It campaign is to stay true to yourself and be in love with your own body because you only have one. This stands for all the Emirati women who will be inspired by the campaign and challenge themselves in a variety of sports activities. The social media framework for my project is the Instagram platform that is focused on promoting love and respect to own body and engage the female audience into sports.

The advert will be represented inside the train, at the metro entrance and exit, in the magazines, as well the at the Adidas store itself. The core idea of the campaign is to emphasize the unique passion and determination of women in the UAE. The campaign will have its own Yalla_Go_For_It nametag on its Instagram profile, which enables every woman involved in it to tag the campaign and, therefore, promote it worldwide. The advert inspires women to appreciate their bodies and shapes and follow this journey.

The critical element of my advertising campaign is the young female who is working out on the beach with a marvellous view on the bay and the ferris wheel. The advert embodies a healthy, enthusiastic, and energized spirit that the girl transmits to the viewer.

She is free to choose a preferred sport within a broad spectrum of activities, whether it is a rugby or tennis. Thus, I added the thinking speech balloons to highlight a wide selection for every female engaged in the Adidas campaign. Emirati women fulfil critical roles that shape their future economy and society. Having analysed the role of the women, I now think that the audience will respond well to the Yalla! Go For It campaign. I created the visual representation of the advertisement in the store to demonstrate how the female consumers regard the campaign favourably.

Recommendations for Future Practice: Reassessing the Weak Points

One of the major weaknesses is the limited range of visual aids. More specifically, only one advertising poster is used for all the target areas of my project. The proposed solution is to cooperate with inspiring female celebrities, perhaps the Emirati politician or even a female athlete. Previously, I did not question myself about the prominent female figures of the UAE. I examined the list of inspirational Emirati women and was greatly surprised by a large number of females and their incredible achievements.

For instance, the advertising campaign can engage with Nahla Al Rostamani, who is the first female Emirati F3 driver, and focus on the motorsports equipment. The company might work with Mariam Al Safar, who is the first Emirati woman to drive a train in the Middle East and proves that women can be more than the passengers. Asma Al Janahi is another Emirati female who is the female-first fencer and breaks the stereotypical views regarding womens role in sports.

Conclusion

I consider the benefit of broadening the visual scope and creating more adverts with these prominent women. Although engaging the ordinary females of the UAE might be more efficient as it will inspire and empower more of the general female public. Yalla! Go For It is a striking example of a wide array of opportunities one might attain once involved in the campaign. Every woman engaged in this project might create a unique hashtag and inspirational quote based on her personal experience. Hence, each of the target areas will include different posters with different Emirati women to broaden the scope of the campaign and make it a significant change, not only the advert.

Works Cited

Barry, Pete. The Advertising Concept Book: Think Now, Design Later. 3rd edition, Thames & Hudson, 2016.

De Bono, Edward. Lateral Thinking, An Introduction. Vermillion, 2014.

Adidas Break Free Ad Analysis: Essay Introduction

Adidas Break Free advertisement tells a story about an elderly man trying to escape from a retirement home. The phrase Break Free at the end of the video is the only words in the clip, and the commercial uses the slogan to capture the attention of the audience and draw a parallel between the spirit of struggle for freedom and the product. The story is told by showing short silent scenes that are aimed to appeal to peoples feelings and create a strong emotional reaction.

Adidas Break Free Ad Analysis: Essay Main Body

The main character is an elderly man who used to be a runner when he was young. The man is being kept in a retirement home but is craving for freedom (Merher 00.00.00  00.01.00). The advertisement is effective because it successfully uses symbols and visual images to provoke emotions in viewers to attach a positive cultural value to the product.

The main character is believable, and his story creates a strong emotional response, making the audience sympathize with the man. It is achieved through the usage of scenes that uncover the personality of the man and his emotions. The clip shows that despite the age and limitations, the man has retained his spirit and the will to keep going forward. Not having access to any equipment, the man utilizes some things that can be found in a nursing home to exercises his body and makes multiple unsuccessful attempts to run away from the institution. Other characters only appear on the screen for just a few seconds, but they also successfully pass the desired message.

The retirement home personnel represents the oppression and the outside forces that want to stop a person from being free. It is shown by the way nurses act, trying to prevent the character from escape and indifferent emotionless looks on their faces. It culminates in the scene where a nurse metaphorically deprives the man from hope by taking away his old shoes (Merher 00.00.53  00.00.58). The capturing emotional story and believable characters make the advertisement stand out and increase the chance the audience will remember it.

The advertisement uses symbols and images that appeal to peoples emotions as a persuasive technique. The retirement home is shown as captivity that is created to stop a person from happiness. On the other hand, a pair of old shoes is an embodiment of hope for freedom and a chance to break away from the unwanted and unsatisfying situation, despite all the limitations and boundaries. By contrasting the opposite ideas, the video emphasizes the symbolic value that it is trying to attach to the product.

The ad associates the product with an active lifestyle, but does not express any components of social class, thus targeting a wider audience. The universality of the message makes it personally relevant for most people and provokes emotional reaction and response in a wide range of people, which is very beneficial for the promotion of the product.

Adidas Break Free Ad Analysis: Essay Conclusion

The commercial is effective because it appeals to universal values that resonate with the audience. The authors successfully use images to make the viewers feel in a certain way. The believable characters make the story credible and make the audience empathize, pay attention, and remember what they see. By showing personal importance and history of the shoes for the main character, the commercial presents the product as a symbol of the struggle for freedom, success, and self-improvement. Thus, the ad achieves its primary goal of promoting the brand and the product, making it memorable and recognizable.

Work Cited

Merher, Eugen. Adidas  Break Free, YouTube, uploaded by Eugen Merher. 2016. Web.

The process of business restructuring is one of the most essential processes carried out by businesses to improve their efficiency. Business restructuring is an integrated process aimed at reducing cost of production while increasing profits earned through the incorporation of best practices.

It normally entails modification of business strategies in a bid to maximize profits among other benefits. Therefore, just like any other changes done in businesses, restructuring features on areas such as value creation, supply chain managements, and business operation modifications just to mention a few.

Adidas is one of the companies that have undergone corporate restructuring in the recent past. In 2009, Adidas announced that it was in the process of restructuring its corporate structure in order to increase shareholder value. This paper is an in-depth analysis of the restructuring processes of Adidas and the effects the restructuring process.

Adidas is a Germanybased company whose headquarters are situated in Portland. It normally deals with the production and distribution of sportswear products with the brand Adidas. The decision by Adidas to have its organization restructured was after a fall in its profits in 2009. That year, Adidas had reported a 6 per cent decline in sales falling from $3.49 billion to $3.43 billion.

The company also noted significant decline in its sales in all regions apart from the Latin America. Actually, North America reported the highest fall with a 17 per cent decline of its currency neutral sales. In addition to this, Adidas experienced a fall in its market share price by 3 cents per share.

This in turn significantly affected its income hence making huge losses forcing it to have its corporate structure restructured. Thus, in order to speed up the process of revenue growth while cutting costs, Adidas indicated that it would implement a number of changes within its organizational structure. First, the restructuring was geared towards cost reduction techniques.

In this, the management of Adidas made sure that the cost of producing and distributing their products was as minimal as possible. For instance, Adidas could achieve this by restructuring their production and distribution channels to sizes that are cost effective yet achieving the set objectives. Secondly, the restructuring of Adidas was aimed at making it a high performing company within its region and all over the globe. This objective was achieved as Adidas products have been widely used globally from 2009.

Adidas made use of advertising and communication strategies to make their products known globally thus attracting a large group of customers. Reorganization of resources as well as the identification of outsourcing opportunities was yet another activity carried out in Adidas restructuring. Adidas improved its processes to serve a larger group of customers thus realizing efficiencies.

In 2009, the Attorney General of Adidas created a Global Retail segment, which was to manage an increasing number of stores that dealt with Adidas products. The retail segment was to be headed by a chief retail officer who was to be responsible for all the new locations, putting more emphasis on the underperforming retail locations. According to the AG, a chief sales officer would be recruited to head the wholesale business section, which is responsible for the distribution of products to retail partners.

In the discussed restructuring process of Adidas, its operations were not affected since no major changes took place. If anything, the company anticipated a cost saving of about 100 million euro or $ 133 million within the 2009/2010 financial year. According to the companys CEO, the restructuring process would make the company achieve a higher level of success in addition to other long-term benefits. The companys CEO made it clear that focusing on market developments was one of the objectives of restructuring.

From the above discussion, it can be clearly concluded that the idea of having Adidas restructure its corporate structure was inevitable given the huge losses it had incurred in the first quarter of the 2009/2010 financial year. Having the wholesale business placed under the management of a new chief sales officer would significantly improve the sales of the company, which had previously declined by 6 per cent.

This is because the distribution and marketing responsibilities would be bestowed to one individual thus ensuring proper audit in case of failure. Given the fact that Adidas deals with sportswear, which in most cases are seasonal because of the seasonality of sporting events, proper marketing was essential. This would ensure that the company makes high sales during the sporting events to cater for the costs incurred during low season.

Segmentation of the retail group was also significant in the restructuring process as it enabled Adidas deal with its close competitors like Reebok. Finally yet most importantly, synergy was achieved after the process of restructuring since the management of the company was structured in a way that efficiency was achieved. However, it should be noted that restructuring comes with certain costs that feature in the financial statements of the restructured company.

Introduction

Different business models are implemented to enhance the productivity of a working process. Two famous companies, Nike, Inc. and Adidas Group, serve as examples of successful performance. Nike is an American multinational corporation that designs and produces sports clothes, athletic footwear and accessories. Adidas is Nikes main competitor from Germany. These global giants are widely available on the Saudi Arabian market and make a profit over $50 billion a year (Mahdi, Abbas, Mazar, & George, 2015). Their management methods have certain similarities and differences. The purpose of this paper is to discuss business models of Nike, Inc. and Adidas Group in order to make a comparison analysis.

Competitive Advantages

Both Nike and Adidas produce athletic shoes. These companies shifted production to other countries like China, Indonesia and Thailand. These countries are distinct due to the low wage level. Hence, Nike and Adidas are able to relocate their manufactures really fast. For example, Nike sneakers are produced in Vietnam, and one of the main suppliers of Adidas is Cambodia. However, these companies have other competitive advantages.

A vast endorsement campaign that involved many famous sportsman and artists made Nike more popular than Adidas. Due to the engaging different basketball stars, its products are widely distributed in the North America. Also, Nike has recently become highly popular throughout the rest of the world. On the other hand, Adidas cornered the European market as it produces an excellent outfit for soccer and tennis players. In addition, Adidas is expanded worldwide like Nike.

Another advantage of Adidas is price. Overall Adidass prices are lower than the competitors. However, Nike employs another pricing strategy. This company targets high-income people. Hence, that well-designed scheme makes Nike very competitive.

Sales Trends

Nikes sales have risen for the last several years. The profit of Nike in 2015 has increased to 31.34B, comparing to previous years 27,8B and 25,3B in 2014 and 2013 respectively (Brohi, Prithiani, Abbas, Bhutto, & Chawla, 2016). The thorough analysis of these figures forecasts the expansion of the business in new countries as it may have 10-11% increment in sales. However, Adidas was successful as well.

The stock got higher more than 65% in the past 12 months and sales have increased by 20% in the most important regions, such as North America, Western Europe and China (Outlook, 2017). The company expects an increase in sales at a rate between 11% and 13%. The gross margin should increase up to 49,1% (Outlook, 2017). However, US dollar hedging rates will hinder the gross margin from the development.

The Sales Management Process

All sales in these companies are supervised and controlled by sales-management. Sales-managers establish an effective system and control the stability of a working process. It involves comprehensive analysis and a person-selling strategy. This type of management requires the implementation of organizational techniques that ensure sales operations. Generally speaking, sales-managers plan, guide and control work of their subordinates. Hence, a sales-management process is made up of several activities.

Planning is necessary to predict negative and positive outcomes. A successful plan is based on the market monitoring. It is always focused on a specific product. It is highly important to discuss all issues with other executives that involved in the plan implementation. Coordination ensures the productivity of a working process. A sales-manager always controls the work of every department and enhances the interaction among them. Motivating is a prominent component of sales-management. Cultivating the team spirit and inspiring subordinates increase the productivity of an entire organization as stimulated sales-persons accomplish better results.

The Salesforce Organizational Structure

These companies have complicated and well-designed salesforce organizational structures that enhance abilities of departments and their interaction (Mahdi et al., 2015). Such organization helps to deal with dysfunctions among regional markets. Divisions are based on geographic locations. However, corporate managers implement leadership programs. It assists in passing on key messages to semi-autonomous departments. These departments aim to monitor and meet demands of regional markets. Optimization of companies strategies is their main purpose (Kumar, 2017). A strict hierarchical structure serves to keep a dynamic and fast-changing working process in order and properly distribute roles.

The Process of Customer Service

Customer service is a prominent component of a successfully performing business. Customer service is organized in a similar way in both Nike and Adidas companies and it aims to maximize the sales by analyzing, planning, implementing and controlling Salesforce activities (Mahdi et al., 2015). It is necessary to highlight the main principles of an efficient customer service. These are collaboration and community management.

These principles create a system that supports and collaborates with different communities. It requires constructive discussion ensured via call centers, the comprehensive evaluation of a situation and feedback management (Jahanshani, Hajizadeh, Mirdhamadi, Nawaser, & Khaksar, 2014). These processes are integral to a customer service framework and work in an interdependent manner.

Conclusion

In conclusion, these two companies employ similar techniques but target a different audience. It is the main factor that determines their unique ways. The described above processes establish comprehensive and interrelate concepts. However, they require constant control and supervision. Figures illustrate the effectiveness of collaboration of departments that perform in different regions. Therefore, by creating competitive challenges to each other, these corporations contribute to the development and prosperity of sportswear industry.

References

Brohi, H., Prithiani, J., Abbas, Z., Bhutto, A. H., & Chawla, S. K. (2016). Strategic marketing plan of Nike. Web.

Jahanshani, A. A., Hajizadeh, G. M. A., Mirdhamadi, S. A., Nawaser, K., & Khaksar, S. M. S. (2014). Study the effects of customer service and product quality on customer satisfaction and loyalty. International Journal of Humanities and Social Science, 1(7), 253-260.

Kumar, A. (2017). Suggesting measurable outcomes via studying sale trends & range of season SS16, FW16 & SS17 for brand originals. Web.

Mahdi, A., Abbas, M., Mazar, T. I., & George, S. A. (2015). A comparative analysis of strategies and business models of Nike, Inc. and Adidas Group with special reference to competitive advantage in the context of a dynamic and competitive environment. International Journal of Business Management and Economic Research, 6(3), 167-177.

Outlook. (2017). Web.

Introduction

Marketing is a social incentive by which people and gatherings get what they want and need through creating, offering and uninhibitedly trade items and administration of estimation of others, marketing is addressing the necessities beneficial both of advertisers and clients. The point of advertising is to know how and comprehend clients so well that the items or administration fits him and offer themselves.

Adidas is a multinational German company that designs & manufactures sports accessories. The group of Adidas consists of reebok Sportswear Company, Golf Company and Rockport.

Adidas has been the largest sports manufacturing company across the Europe and Germany and it is the 2nd biggest sportswear manufacturing company in the world. Including sports footwear Adidas also produces products like bags, eyewear, shirts, watches and other sports and clothing related goods.

I. Marketing strategy of Adidas:

Adidas employees more than 53,731 people to in 160 nations which produce more than 660 million item units yearly also produce offers for € 14.5 billion. These numbers can undoubtedly recommend that Adidas bunch is very much complex association. Anyway they keep things simple, incline also quick.

I. Positioning in the Marketing strategy of Adidas:

Most amazing sportswear producer of Europe & a standout amongst the greatest in the world, Adidas may be fragmented in view of demographic, psychographic & behavioural factors. Adidas has four brands done in its solid portfolio – Reebok, Adidas, Rockport & Taylor meant for different customers of different groups. Adidas make different targeting strategy to target young adults, as well as children who have more interest towards fitness & sports. Even though it targets customers of the age group of 13-40 years but most of its customers are of 15-30 years of age who are from upper middle class or the luxury class of customers.

User & benefit based positioning are the strategies Adidas uses to create important image of their customers. By showing the value and quality products from a trusted brand Adidas is always been able to maintain its brand essence.

The portfolio is divided as follows:-

The Adidas show performance in Competitive sports, Reebok & Reebok classics in Active sports & casual sports, &Adidas originals, Adidas Fun, Rockport in Sports fashion.

II. Mission in the Marketing strategy of Adidas

“The Adidas group is a global leader in the sporting goods industry with brands which is built with a passion for sports and a sporting lifestyle. We are committed to its continuously strengthening our brands and products to improve our competitive position”.

Tagline – “impossible is nothing”. This tagline is the most popular tagline by any company. The tagline, which shows the great importance towards fitness and importance of getting anything which we desire, is one of the biggest asset the company has, and which possibly summarises the marketing strategy of Adidas.

III. Competitive advantage in the Marketing strategy of Adidas

There are few competitive advantages that Adidas has is its distribution network, Moreover worldwide Adidas has minimum of 2400 stores accounting $4.3 billion business. In a way to associate itself with the community it has sponsored many world sport events such as FIFA, UEFA, NBA, and Cricket & Olympics. over these years Adidas is also known to produce and give the best products in this world which are always in comfort and long lasting.

IV. BCG Matrix in the Marketing strategy of Adidas

BCG matrix which helps to identify the strategic position & future course of the strategic business unit. Adidas has four brands under the Adidas group out of which: Adidas & Reebok are stars; these two individual brands have a very strong market share and at the same time the competition for the sports and fitness segment is very high. There are other brands like Puma, Nike also which fight for a large share of the market.

V. Distribution strategy in the Marketing strategy of Adidas

As the customer’s environment becomes more dynamic with trends quickly changing, Adidas is also then focuses on what satisfies the customers which are new trends in the market. After knowing the process of purchase from their customers, they reach to conclusion that the interactive experience with the customers and the availability, the size of the product which plays a major great role in a successful distribution strategy.

VI. Brand equity in the Marketing strategy of Adidas

Sports activities which is revolving around social media & community which connect programs has really helped Adidas to be the biggest players in the sportswear. Each brand and sub-brand is responsible for bringing its own different identity and positioning to life. While Adidas and Reebok they both have unique identities, heritages, technologies, designs and reputations, the principles and the methods for driving future sales growth and towards profitability improvements are common to both.

VII. Competitive analysis in the Marketing strategy of Adidas

The group of Adidas multi-brand gives them an important competitive advantage. Through the brand portfolio, the Adidas cover the sports and consumer choices which defined as important to support their Group’s ambition and inspire which brings people more closely towards sports. The Large companies like Nike & Adidas which have been growing rapidly over the last two decades. They have reached worldwide which expanded through all continents, which is to change the lifestyle of developing economies & emergence of Internet, E-commerce firms.

VIII. Market analysis in the Marketing strategy of Adidas

Due to the counterfeit products which are presented and also high bargaining power of customers it’s been really very difficult for these players to keep themselves alive in the market. Even though the offerings are meant for sports persons but most of the buyers are normal people professionals, children who are young don’t mind in switching to other brands due to the change in competitive positioning worked upon by the players. The Industry is developing due to change in lifestyle, economics of the population & shifting from Rural to urban areas but in the same time demand supply gets mismatch & idle inventory which results in lowering the margins of the players in this industry.

IX. Customer analysis in the Marketing strategy of Adidas

Adidas users consist of Upper-middle class social groups. To get successful from a consumer point of view, Adidas acknowledged that a strategy of mass production or mass marketing is no longer sufficient. By understand and identifying the consumer’s individual motivations and goals for doing sport, their fitness and lifestyle where they are doing sport and their buying habits will help them in creating meaningful products, services and experiences which builds a lasting impression and a loyalty for the brand.

II. Adidas increases sales and earnings guidance until 2020

· 2017 was a successful year for the Adidas group; Adidas is increasing its long-term guidance. The company has decided to accelerate sales and earnings growth until 2020 according to their long term business plan, ‘Creating the New’. The company now expects currency-neutral sales to increase at a rate between 10% and 12% on average per year between 2015 and 2020 (previously: to increase at a high-single-digit rate). Net income from continuing operations is projected to grow between 20% and 22% on average per year in the five-year period (previously: to increase by around 15% on average).

I. Company culture:

Moreover, developing Adidas’ Adidas has its own culture which plays a central role for the company and it helps in achieving its long-term goals until 2020. From the company’s point of view they set a belief that through sports the employees of Adidas have the power to change the lives. As per the developing plan until 2020, Adidas is mainly focusing its HR initiatives on leadership, talent development and performance management.

II. Speed:

Adidas is the fastest sports developing company and it has set itself as one of the best. There were key milestones achieved on the road to this goal in 2017. For example, in 2017, a pilot ‘speed factory’ was set up in ansbach (Germany) and mass production will commence in 2018. In addition, the second Adidas speed factory will open in Atlanta (USA). Altogether, in 2017, around 15% of total sales were generated with products manufactured on speed programmes. It is the company’s ambition to increase the share of ‘speed-enabled’ products to at least 50% of net sales by 2020.

III. Cities:

Moreover, the Adidas is now focusing its sales and marketing activities on six major centres: New York, Los Angeles, London, Paris, Shanghai and Tokyo. The average- above volumes of sporting goods is purchased there, and these big cities also play a very crucial role in developing trends, both nationally and internationally. In 2016, Adidas increased brand market share in all these cities. The company’s main aim is to make the double profit in these cities by the year 2020 compared to 2015.

III. Adidas scores big in sales and social media growth during the World Cup

During the World Cup, the Americas director of soccer, Ernesto Bruce, he had noted the 2014 FIFA World Cup was the ‘…largest marketing campaign in the history of Adidas soccer.’ While discussing Adidas social media, retail, marketing strategy, Bruce had made one thing clear: Adidas did not only expect that the teams and players it outfits to win on the field, but for the company to also win on the bottom line. Germanys 1-0 win over Argentina was more crucial moment because the players were mostly seen in Adidas which gave the Adidas more growth, both Germany and Argentina are Adidas federations. While debate has come out that throughout the World Cup which company would bring a greater impact in the market, one thing is certain, Adidas did experienced significant growth. In particular, four federations–Germany, Argentina, Colombia and Mexico–saw significant jersey sales growth.

From the Bruce point of view, Adidas has seen sales growth of 45-percent for 2014 over 2013 for Mexico’s jerseys. Bruce noted that it is significant, as retailers wanted to cancel the order from Adidas, when the team almost didn’t qualify for the World Cup. However, he noted that Adidas ‘kept being strong and never cancel the orders or stopped the production.’ To Bruce, the growth Mexico has seen in its jersey sales is attributed to its ‘fans still supporting the team, no matter what.’

In 2010 world cup Columbia was not the Adidas team, Adidas is really happy with the growth of its jersey sales. ‘Colombia had been a very huge surprise. We measure the sale by comparing the Columbia with the France which was a participant of 2010 world cup which is no more. We did sold 60% more Colombia jersey sales compared to France in 2010. France is an internationally superpower in the sport and Colombia is unknown, so for Colombians to come in and performing the way they did and sell 60-% more jerseys is huge,’ Bruce said.

While the Colombians and Mexican’s outperformed Adidas, expectations in jersey sales, both the countries Germany & Argentina setup up jersey sales numbers that had Adidas celebrating. From 2010, the sale has increased by 60% from Argentina’s side. If we get 20-percent growth, we would be very happy,’ Bruce noted. Adidas needs to be even more concerned over Germany’s jersey sales numbers. Bruce noted that Adidas is going to sell 70% of Germany’s jersey in the United States.” for Germany winning the finals is a great success for us. The records are really getting broken in terms of sales for Germany jerseys,’ Bruce said.

IV. Conclusion

By checking overall, I must conclude that a survey is really a good opinion to know more or to gather information from public like what they really think about it, I get to know all the necessary things which the public wished for, it brings out public attention and let me knows what the customer feels about the brand if they are really satisfied with the products or not and I get to know from what thinks we are running short of. So, survey really helps in completing the doubts.

By conducting a survey, I will get to know more about Adidas brand and get to know more accurate results from the customers, by proceeding this method it will let me know about customers satisfaction towards it which leads to increase in the sale and increase in profit.

V. Bibliography

1. Marketing strategies of adidas retrieved 1st January 2017 from https://www.google.ae/search?q=www.marketing91.com+%E2%80%BA+marketing+management+articles&rlz=1C1EJFA_enAE765AE765&oq=WWW.MARKETING91&aqs=chrome.2.0j69i57j0l2j5l2.7486j0j4&sourceid=chrome&ie=UTF-8
2. Strategies of Adidas retrieve 2nd January 2017 from https://www.adidas-group.com/en/group/strategy-overview/
3. Chosen cities by Adidas retrieve 3rd January 2017 from https://www.ispo.com/en/companies/id_79710992/new-marketing-strategy-adidas-is-focusing-on-chosen-cities.html
4. History of Adidas retrieve 3rd January 2017 from http://www.taylorsadidas.blogspot.ae//

1.0. Introduction

2.0. Organisation background

2.1 History

Figure 1 source: Adidas.group

Adidas is German-based company started by two brothers Adi Dassler and Rudolf. Adi was innovative, he observed athletes, talked with them about their needs and problems and try to solve it while Rudolf concentrate on selling. Brothers are successful from the beginning. Adidas operating in Apparel and accessories industry and serves consumers at the global level with footwear, sportswear, sports material and other accessories. Today Adidas employ over 57,000 people from all around the world. Employees from more than 100 nations are working at global HQ in Herzogenaurach, Germany – the ‘World of Sports’.

Adidas entered India in 1989. India is globally the second largest footwear producer after China. The company is focusing on both online and offline formats to fuel its growth in the Indian Market. According to Dave Thomas, Managing Director of Adidas India and Rebook, they have target to open more than 10,000 stores in combination of across the group of different formats, a combination of company’s retail or franchise by 2020. (Verma, 2020)

2.2 Products and services

The company is engaged in the designing and manufacturing process of number of shoes, clothing and other accessories. The latest invention of Adidas is µa (‘micro-A’), the Adidas ‘Smart Shoe’: By using new technology they are developing smart shoes to improve atelic performance and beat their competitors. The company is active in digital market as well. Adidas also currently focused on North America, adoption and use of new technology and amalgamation of its all segments to increase their efficiency by calling “ONEADIDAS” (Digitalcommons, 2020)

2.3 Competitors

Year 2018

Adidas + rebook

Nike

Puma

Net sale

• 21.915 BN
• 36.39 BN
• 4.64 BN

Operating profit

• 2.368 BN
• 4.44 BN
• 337 M

Net income from continuing opration

• 1.709 BN
• 1.93 BN
• 187 M

Number of employees

• 57,016
• 73,100
• 13000

Adidas acquired Rebook in 2005.Nike, Puma, Fila are the main competitors of Adidas-Rebook. From the analysis of past 8 years revenue Nike is much ahead then Adidas and Puma globally. But in the Indian market Adidas and Puma is having neck to neck competition. In India Puma and Adidas are having almost equal popularity while Nike is little behind them.

Figure 2 Adidas.com Figure 3Sources : (Dutta, 2020)

2.4 Revenue and growth

Year

• 2018
• 2017
• 2016
• 2015

Sales/Revenue

• 21.915 BN
• 21.22BN
• 18.48BN
• 16.92BN

Net income

• 1.71 BN
• 1.35BN
• 1.08BN
• 680M

Adidas begins 2019 with a good performance. They closed the three first months of the fiscal year with a net profit of 663 million euros, 17% more than in the same period of the previous year. Kasper Rorsted CEO of Adidas stated that this fiscal year will be key for the strategy that the group is drawing up for 2020. (Themds.com, 2020)

Adidas is one of the largest sports company in the world, its three stripes logo recognized in global market.

3.0 Industry analysis.

3.1 Porter’s five forces

Any industry’s structure is depending on porter’s five-force model. Bargaining power of supplier and threat of substitute has high effect in Indian market.

• Bargaining power of supplier

The suppliers’ bargaining power is very high. Adidas makes contracts with famous athletes or teams like IPL in India to promote and advertise its products. Sachin Tendulkar was his first brand ambassador. Since these sports teams and players joint with Adidas on contract base, so they can choose among several competitors they can easily threaten to pick the one with the best offer, which increase bargaining power of supplier.

Other domestic supplier of Indian market is highly fragmented and characterised by high density in textile and apparel manufacturing sectors. They mostly work independently at small scale, which might diminish their power. However, few large domestic suppliers in market such as Tata, Raymond, Metro shoes have accrued the power and the capital to stop forward integration of foreign retailer company. (Mann and Byun, 2020)

• Threats of substitute

The threat of substitute mostly depends on cost switching, availability and performance of ubstitute and inclination of consumer. Crocs, US based company can be considered as a substitute. The popularity of the brand is increasing globally due to unique pattern and colours of the product. (The Economic Times, 2020)

Indian consumer tends to shop from small local small retailer to large supplier. Substitutes for Adidas’ products especially in the apparel market come from smaller and more localized companies in India. There are many local brands in India, which gives same product in low cost. The presence of large number of tailors in Indian cities make customize attractive clothes, which highly threats the foreign retailer like Adidas. Majority elder Indian women wear traditional clothes and local brand shoes due to the low cost. It can be a high threat for foreign retailer because different culture and demands of Indian market. (Mann and Byun, 2020).Figure 3Source: business-standard.com

3.2 Effect of COVID-19

China is the second largest world economy and hub for many fashion and sports industries. Many sneakers are manufacture in china and Asian country. Coronavirus has huge negative impact on sells of Adidas. Last year, Adidas did €4.5 billion ($4.9 billion) sales in china, which is 21% of its total business. Due to the coronavirus, effect sale of company reduced to one third and Adidas has closed many sores in china. (Bain, 2020).

4.0. Situation analysis

4.1. External factor drivers impacts opportunities or threats social

Signing film stars and cricket star as brand ambassador.

As Indian youth is influenced by the glamorous world, sale of the products will increase.

Adidas offer customized product by colour and size .

Customization will help to make strong relation with customers.

Long psychic distance.

People easily switch to another brand or buy first copy of orignals

Environmental

To reduce the pollution in environment, company has

Developed “low waste initiative programme” Manufacturing of eco-friendly material will reduce the carbon footprint.

Build up good ethical reputation in global market, which helpful to increase company’s market share and brand name.

Political

Changing in polices and tax system

Lake of uniform tax system and corruption can also become obstacle for Adidas.

Indian government has relaxed the rules for FDI (foreign direct investment) in retail, permitting manufacturers to sell their products through wholesale, retail and ecommerce as well since 2015. .(Bailay and Anand, 2020).

Adidas has announced its intent to open its first fully-owned outlet in India in the second half of the fiscal, after it got clearance to invest in local retail operations. This can be great opportunity as Indian economy is growing fast and very popular among the global retailers.

Legal

The company has allegation of paying low wedges, child labour from their worker. (U.S., 2020)

Adidas has declined on these allegation and pass official statement. However, it has bad impact on company’s reputation in market.

Adidas lost his case in European court names shoe branding Europe. The court state , the three strips logo of Adidas is not enough distinctive. (Mondaq.com, 2020)

This can be high threat for the company’s trendmark.

• Opportunities and threats

From the above analysis, Indian policies and social-culture can be the great opportunity for growth in Indian market. While, different mind-set of Indian people and product substitution can be threat for company also. Legal cases or scandals are running Brand name in market.

4.2 Internal analysis

The internal analysis of Adidas is including company’s strength and weaknesses. The close analysis will help to discover which tool is needed to pass the barriers and lead to success.

Strength

• Brand image and legacy

Adidas has been around as a brand since 1949. From Adi dessler to now, company has managed to maintain its legacy successfully. Its well-recognised brand in all over the world and well popular in India. The large population of Indian youth, urban nuclear families, working women, Athletes, emerging service sectors are the driving strength of well-organized companies like Adidas in India. (Citeseerx.ist.psu.edu, 2020).

• Innovative Designs and Marketing

Adidas is excellent in innovation. The company used different technology to fulfil need of the athlete and present new designs such as Adidas boost line and Alpha bounce shoes, which becomes very popular.

Adidas has been trying to experiment with 3D printing technology. Which can be useful to design high tech, customized shoes from their Future craft 4D manufacturing process.(Erkilic 2020).

Weakness

Despite of having strong position in market, Adidas do have some weakness to overcome.

• Slow Design

In order to match with current trend, the company must launch its new design on time. However, the company is designing slowly. For example, Adidas has launched its new product after 18-month gap. This might be threatened to lose the latest trend. (Digitalcommons.unl.edu, 2020)

• Prise comparison

Constant innovation and diversity in products is high strength of Adidas but Price of product is high in compare to other sports company and local retailer in India. The middle-class family in India cannot afford it and look for another substitute.

• Dependency for manufacturing

Despite of strong financial condition in the worldwide sport Goods Company, Adidas is highly dependent for manufacturing and logistics on their external partner. (Repository.kln.ac.lk, 2020) Because of this, the company cannot control the quality of manufacturing closely and accept the changes made by manufacturers, as they are so dependent on them.

5.0 Models and theories

5.1 Internationalization theory

The company has followed the Uppsala model by Johanson and Wiedersheim-Paul (1975) for its global business. In 1990, Adidas enters in India and emerged as country’s most popular sportswear and apparel brand.

Adidas has adopted this theory in India. Adidas enters in India through observing the nearby market then explore its sales and activities and then move to another specified region. Online sells help Adidas in expansion of business, which leads increase in market share and economic growth. (Jones, Coviello & Tang, 2011). (Hollensen, 2007)

5.2 Marketing mixed approach across the strategic 7Ps

The marketing mix 7Ps structure helps to analysis business practices and online business practices in market (Pour, Nazari & Emami, 2020).

• Factors
• Analysis
• Product

Adidas supplies innovative products through various online site. The quality of the products maintain the loyalty of its customers(Pour, Nazari & Emami, 2020).

• Prices

Every session Adidas offers various discount on products to promote their digital business and increase the sell.

• Promotion

Adidas uses you tube and other social media for digital marketing t of its product. Adidas also do promotion by using film stars or famous athlete in the advertisement. (Pour, Nazari & Emami, 2020).

• Place

Adidas places its stores at every area where it serves more consumers like malls, Main market of city, and theatres.

• Packaging

Attractive packages create good impression on customer. Adidas can improve its packaging style.(Pour, Nazari & Emami, 2020).

• Positioning

The “Impossible is nothing” slogan is used by company to establish itself in global market. Try to win customers Adidas offer innovative attractive products in market.

• People

Adidas take care of their people by offering attractive commission and payments to its distributors. Which is very helpful for online selling. (Pour, Nazari & Emami, 2020).

5.3 Home nation’s competitive advantage

Figure 4 SOURCE:Wordpress.com

Factor condition

Factor conditions refer to the different types of resources such as infrastructure, capital resources, human resources, natural resources present within a nation. (Expert Program Management, 2020)

The German education system is a world-class system which set the standard of the employees for company. Brand recognition of Adidas in its home country can be associated with loyal nature and attitude of German.

Related and supporting industries

Adidas is a sports shoes and apparel industry. The major part of the market is related to the glamorous world. Many German brands are in the top list of fashion industries such as Puma, Hugo Boss, MCM worldwide, Escada. Adidas success can be related to the available resources from related other industries.

Demand condition

The main factor of demand condition is home market demand which can be great motivation for the company for improvement and innovation. Adidas sponsors much German soccer team such as Liverpool, FC, FC Chelsea, AC Milan, etc. The love and passion for soccer among the German helps Adidas to increase the popularity of its product and market share in sports industries.

Strategies, structure and rivalry

The competitiveness of the company is depending on strategies and business structure in nation. Strong rivalry in home country play very important role in the innovation and improvement of the company. Adidas’s excellent performance in the world of sports industries is related to its main competitor Puma from its home country. They can’t be so successive internationally without present of each other.

6.0 Marketing activities

The total Indian market of sportswear, footwear, apparel and other accessories is around €400 m-€500 m in net sales, among it adidas is holding 45% share.

Adidas is focusing on its marketing strategy for enhancing its brand image. They are targeting 1000 stores as they have 750 as of now. 1000 would be a combination of companies retail and franchise by 2020 according to the Rebook and Adidas India managing director Dave Thomas. They are planning to increase their sale through the departmental store and online channels.

Segmenting, targeting, positioning

Adidas uses segmenting, targeting, and positioning strategy. It targets customers include children and adults of the 13-40 years’ age group. The strategy behind it that children and adults are more passionate and sports lover so they love to buy innovative and luxurious sports product at various range without going on physical shopping ( Lynn, 2020). Available number of online users is beneficial for positioning brand in market. Adidas uses digital market for promote its product and ties ups with online distributors for providing products to a final buyer (Lynn, 2020).

The company is specially focused on Bengaluru. They are having huge opportunities there due to active interest in sports such as football, cricket, tennis, and basketball. (Deccan Herald, 2020).

Marketing strategies

Adidas focuses on big sporting events like Olympic Games, FIFA cup, Euro cup and bought the official rights of the sponsor. Indian people have increased their interest to organise in various other sports like kabaddi, tennis, hockey, football rather than only cricket. The company has sponsors kabaddi team Maratha Warriors and Indian Super League football team FC Pune City. Moreover, in the Indian premium league (IPL) Adidas sponsored the team Royal Challengers Bangalore and signed up Virat Kohli (face of Indian cricket) which is a remarkable move for marketing. Next year, India is hosting the football world cup under-17, which create huge market for world’s sport company. (Fortuneindia.com, 2020) Adidas acquired Rebook in 2005. The combination of two major brand helps to increase the strength, global market shares and access to bigger markets.

Another marketing strategy of Adidas is its partnership with Samsung. Their shoe + phone scheme can use to plan, track and motivate users in training. Adidas is more trying to insert technology in their apparel and footwear and try to differentiate products from their competitors. (Anon, 2020).

7.0 Online activities

Adidas makes strategic plan for online marketing. The company use the different online business channel to promote and sell their products. Facebook, Twitter, and other online channels are used to attract more and more consumers.

Comparative analysis

Channels

• Adidas
• Nike
• Puma
• Reebok

Facebook

Like

• 37M
• 33M
• 20M
• 9.8M

Follows

• 37M
• 34M
• 20M
• 9.9M

Instagram

Post

• 762
• 767
• 2802
• 2698

Followers

• 25.5M
• 102M
• 11.1M
• 326K

Following

• 162
• 53
• 10
• 76

Twitter

Followers

• 3.7M
• 8.1M
• 1.6M
• 725.1K

Following

• 151
• 116
• 39
• 5334

Web presence and E-commerce: Adidas is having its own websites. The company sell the wide range of its product to the consumer directly without incurring cost related to any distribution channel. For example “omnichannel”, here customers order stuff which is not available in local stores. Their order will deliver to the customer’s given address in 24 hours or to the local stores. E-commerce is getting popular in India. Adidas is assigned with four e-retailers—Flipkart, Myntra, Jabong, and Amazon. (Fortuneindia.com, 2020) These distribution channels have agreement with the company to sell their product and offer various attractive discounts to increase the sell. Adidas also having pay per clicks attributes to reach more customers. Many people found mobile applications are easier for online shopping as mobiles are most common instrument available to every individual. Social media is very effective for the promotion of products. Adidas spends a major part of its profits in digital marketing. However, the company feels that, they are over investing in digital advertising by more focusing on efficiency rather than effectiveness. (Vizard, 2020)

8.0 Recommendation

Adidas is doing great job in digital business, however, to get more success, the company has to make some changes in its online marketing strategy as well as distribution services. The company should also improve its offline business practice as many people likes to traditional shopping in Morden world.

Adidas should launch its own mobile app, which help to reduce the cost of distribution. Moreover, a company can also add good online payment system, where customers can get points based on their shopping. These points will be helpful to get them attractive discounts by using from company’s official mobile app. Adidas should also use a different website for marketing and pay them per click.

9.0 Conclusion

This assignment has explained the market analysis and internal analysis of Adidas. This analytical study has helped in identifying the opportunities and threats that are available to Adidas in the global market. This Study analyzed that with the use of online means the company can not only explore its market share but also can meet its long-term objectives and sustainable development. Adidas Starts online selling of product and makes effective use of digitalization. For long-term concerns, Adidas needs to identify external factors and internal strengths and weakness which affect its performance at the global level. This will also help in increasing the sustainability of Adidas. The company should adopt growth strategies, product differentiation strategies for its global development.

Executive summary:

This report will focus on the operations of the transnational corporation of Adidas AG. The purpose of this report is to consider the following aspects of this business: features, operational processes, human resource issues, management issues, ethical issues and competitive advantage.

1. Features of Adidas AG

Adidas is a global transnational corporation, founded and based in Germany, by Adolf Dassler in 1994. The global headquarters of Adidas is located in Herzogenaurach, Germany. This business, which is a household name with its well recognised logo of three stripes, has a variety of several different stores all over the world, with key locations including; Amsterdam, Portland, Boston, Shanghai, Hong Kong and Panama. This transnational corporation sells a variety of product types e.g. clothing apparel, shoes. It started with athletic shoes but expanded its product line in 1963 to include sporting clothes and soccer balls. In the 1970’s, it achieved the status of producing the world’s most popular running shoe. Overall, the company has 1342 concept stores, 933 factory outlets and 130 other stores. In 2018, Adidas employed 57,016 people worldwide. The net sales in 2018, worldwide was 21,915 billion euros, or 35,858 billion Australian dollars. It is the company’s mission to be the best sports company in the world (Annual Report 2018). Their strategy for achieving this goal is as follows:[image: ]

The company will be celebrating 70 years of operations in 2019.

2. Operations of this business

a. Overview of process

The operations processes are those involved directly with transforming inputs into outputs. The transformation process adds value when resources are converted into goods. Resources can be either transformed (materials, information, customers) or transforming (labour, facilities). Outputs are the business’ final good delivered to the customer, e.g. running shoes, clothing items. An important part of the business’ operational processes is managing its supply chain. This means that the business needs to focus on planning both the production and customer demand of its various products. Involving over 1200 factories across the world (Adidas Group 2017), this can be a complex process for the business. It requires the coordination of factories, warehouses, transport and cashflow.

b. Ultraboost Example

For example, in producing the Adidas Ultraboost running shoe which is considered to be the world’s best running shoe, the business uses key inputs such as; labour, energy, raw materials as well as machinery and technology to transform these resources into the completed product (output). After choosing three colours for the shoe, they are combined to create the primeknit upper, using specialized machines. Following a manual inspection of the finished upper, the tongue and lining are then cut using a stencil, machinery and labour. After adding labels to the shoe part, the uppers are then fully assembled by a sewing machinist. There is then a quality check before the uppers are lasted (set in the shoe shape using a heating machine). This is then followed by the attachment of the lower part of the shoe to the upper. A key component of the Ultraboost is the thermoplastic polyurethane sole of the shoe which is created as a result of the transformation of multiple pellets of this material being heated and compacted. The output product is then inspected and packaged, ready for distribution to customers via warehouses.

Adidas has just celebrated 5 years of successful sales with the Boost shoe (Annual Report 2018).

3. Human Resource Issues

Three human resources issues Adidas is facing are; forced labour and modern slavery, wages to workers in the supply chain and workplace discrimination.

a. Forced Labour & Modern Slavery

[image: ]The operational processes used by Adidas rely heavily on outsourcing production to countries which have cheaper production costs e.g. China. The graph below from the Annual Report 2018 shows apparel production by region, highlighting the fact that forced labour and modern slavery are human resource issues which Adidas must be aware of and adequately address. Adidas has publicly spoken out about forced labour and modern slavery, saying that they ‘treat forced labor, human trafficking and slavery as zero-tolerance issues,’ (Adidas Policy on Modern Slavery) and that their ‘focus continues to be on ensuring fair, safe and healthy working conditions for the workers who make our products in alignment with international standards and norms.’ This issue has been highly significant throughout many activewear brands, though Adidas has been lauded for its high standard in managing forced labour and slavery in the supply chain, a network between a company and its suppliers to produce and distribute a specific product to the final buyer (Investopedia), being given 92/100 in the 2018 Apparel and Footwear Benchmark Findings Report, published by the organisation, Know the Chain. This report states that ‘Adidas and Lululemon achieve a significantly higher score than their peers due to their strong approaches to addressing risks associated with recruitment and migrant workers as well as risks in lower tiers of their supply chains.’ Consequently, Adidas would appear to be managing this human resource issue successfully but it will require ongoing management attention.

b. Wages to Supply Chain Workers

Another issue facing Adidas is wages to workers in the supply chain. Many workers in the supply chain are not payed a living wage, therefore trapping them in poverty and making them unable to supply for their family or sustain a steady flow of reliable income. A living wage, defined as a wage ‘that allows a family to meet its basic needs, and provides it with some ability to deal with emergencies, without resorting to welfare or other public assistance,’ (Business Dictionary), is often not paid to workers who work in factories, manufacturing products for businesses who outsource their labour. This is common in countries such as China, Thailand and Indonesia where regulatory requirements relating to wages are less restrictive than in more developed nations.

Unfortunately, despite Adidas’ growing profits, the company still does not pay the workers in the supply chain what they need to survive.

c. Workplace discrimination

The final human resource issue facing Adidas is workplace discrimination. Workplace discrimination claims have occurred mainly in the Adidas facility in the USA. Most claims of discrimination have come from the North American Headquarters, in Portland, Oregon. These claims entail racial discriminatory behaviour, such as isolation from social groups on campus, neglection of input and ideas by higher positions and inability to be promoted compared to other ethnicities. Since these claims have come out, Adidas has replied and stated that ‘While we have made progress in these areas, we recognize there is much more to be done, and we are committed to doing it’ (Footwear News) in regard to the issue. This is important as it shows a willingness by Adidas to tackle this significant human resource issue. Unsatisfied workers are less productive and can be disruptive to the efficiency of the business so it is important that Adidas continues to focus on this issue. Importantly, Adidas has adopted a People Strategy, as set out

4. Management issues – Financial, marketing and legal

One management issue that affects Adidas through financial, marketing and legal aspects is outsourcing labour from countries that have different laws and regulations.

a. Financial

The financial aspect of the outsourcing labour is that it is cheaper for the company to outsource labour in countries that have a lower minimum wage. This means that it is cheaper for the country to manufacture the products in that country as opposed to manufacturing the product in the final country of sale. Adidas is liable to tariffs on its products, making it harder to outsource labour. Adidas is also at risk of exchange rates spiking. This means that there is a risk in outsourcing labour, and the exchange rate cannot always be stable, therefore making the expense of manufacturing the product somewhat unpredictable.

b. Marketing

The marketing aspect of the management issue is that outsourcing labour in countries with a lower minimum wage can be seen as exploitation and can damage the company’s image. If the outsourcing involves labour usage in conditions where basic human rights are not met, for example sweatshops, then it has the potential to impact the marketing of the product and the overall reputation of the business with consumers. This is because the outsourcing could negatively impact Adidas marketing efforts if it were exposed for not adequately meeting its corporate social responsibility, which is where a business goes beyond the minimum legal requirements, such as paying a fair living wage rather than the minimum wage.

c. Legal

The legal aspect of the management issue is that the legal requirements which the business much comply with differ in each country. This complicates the running of the business because it requires detailed knowledge and understanding of the laws within each jurisdiction. To help understand the laws, Adidas would have a compliance team reporting to management to ensure that it meets all legal requirements when operating in all countries.

5. Ethical issues affecting this business

Two ethical issues affecting this business are; the controversy surrounding animal welfare, and the environmental impact of manufacturing the clothes.

a. Animal welfare

Adidas has recently stopped using rare and exotic animal products, such as angora or cashmere, though the business still uses leather and other animal materials which are unsourced (the origins of the materials are unknown or unreleased by the company), making it unclear as to whether the animals are being treated well and ethically. In the past Adidas has used materials that are not environmentally friendly, such as PVC. Since 1998, Adidas has phased out PVC and several other unsustainable materials. Adidas has also made a pledge to not use raw materials from any endangered or threatened species specified by the International Union for the Conservation of Nature and Natural Resources. Overall, animal welfare has a significant impact on the marketing and ethical view of a business.

b. Environmental Impact

Adidas recognizes the importance of being an environmentally aware corporate citizen. In tracking its organizational footprint (Annual Report 2018), the company is able to monitor and control its environmental impact and set revised targets for future years.

Adidas has also made steps, and collaborated with the charity, Parley for the Oceans, producing over 5 million pairs of shoes in 2018 made of ocean plastic. In addition to the collaboration with Parley for the Oceans, Adidas has also produced clothing made from recycled plastic such as the Champions League jersey for Bayern Munich. Additionally, the company has reduced the production of CO2 emissions. In 2018 alone, Adidas saved more than 40 tonnes of plastic worldwide, replacing it with environmentally friendly solutions. Though Adidas Overall, Adidas is rated an A on the 2019 Ethical Fashion Report (Baptist World Aid Australia). As set out in the 2018 Annual Report, Adidas ‘believes that acting as a responsible company will contribute to lasting economic success’. It is making good progress towards achieving the goals outlined within the United Nations Sustainable Development Goals. Overall, the environmental impact of manufacturing clothes is significant, and Adidas is making large steps to make sure the environment is one of their main concerns when manufacturing clothes.

6. Strategy used to maintain or increase competitive advantage

A strategy that Adidas uses to maintain the competitive advantage of the business is the use of celebrity partnerships. This helps differentiate the product from other brands, if associated with a public figure. For example, one of the biggest celebrity endorsements of Adidas, the partnership with Kanye West to produce the ‘Yeezy’ line, is one of the most valuable assets to the business. The Yeezy line is to reach 1.5 million dollars’ worth of sales in 2019. The use of celebrity endorsements promotes the features of the business that makes it unique. Other strategies that maintain competitive advantage is the customization of shoes tailor made to buyers, environmental awareness, sustainability and transparency of the products origins.

Outcomes:

This report highlights the various complex aspects of the transnational corporation of Adidas AG. Operating in a globalized and technically advanced environment poses many challenges for this business. However, as highlighted in this report, Adidas AG has successfully and profitably addressed these challenges as a part of its continued focus on enhancing the performance of the business.

Bibliography:

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Adidas AG was founded by Adolf (adi) Dassler and his elder brother Rudolf Dassler in early 1920s in Herzogenaurach German. The name Adidas (as written on their products “adidas” by the company) is an abbreviation of the name of founder Adolf (“Adi”) Dassler. The Dassler

Adidas manufactures athletic shoes and apparel and other sporting goods. In the 21st century adidas emerged as the largest sport wear manufacturer in Europe, and the second largest (after NIKE) in the world. Adidas products are known with the three-strip trademark, which remains an element in the company’s newer “trefoil” and “mountain” logos.

The Dassler family began shoe manufacturing after world war I. Adidas first breakthrough was in 1928 Olympic Games held in Amsterdam, when they designed shoe for German athletic team. Followed by the Berlin Olympics in 1936, the American track-and-field star Jesse Owens wore shoes that were reportedly a gift from Adi Dassler. Owens’s medal-winning performances increased awareness of the Dassler brand around the world. After the world war II, Rudolf break out after unsettled interest to start his own company and named it “Puma” and later Adolf registered the company with three-strips logo in 1949, as “Adidas” (‘Adi’ from his nikename and ‘Das’ from Dassler) thereafter adidas grew extraordinarily. The Dassler family withdrew from the company in 1989. Robert Louis-Dreyfus was made the chairman of Executive board from April 1993 to March 2001. In 2001, Herbert Heiner was appointed as the CEO of the company.

Adidas took over Salomon group in 1997 and changed the company name to Adidas-Salomon AG. But in 2005 Adidas sold Salomon segment to Amer Sports Corporation. And in 2006 Adidas acquired Reebok one of the well-known brand in the world and changed the company name to “Adidas AG”. Adidas has approximately employed over 40,000 people.

Markert analysis.

Adidas AG, has over has over 2200 outlet globally and planned to acquire over 1500 new outlets in 2017. Customers can also shop from their home website and can place order online.

There was a decline in sales of Adidas European sports goods in 2009, which subsequently improved in 2010. Adidas established itself in the high growth of north America and Europe and has expanded its market in developing economies of Asia which offers a huge market opportunity compared to other developed economies.

Marketing strategy of Adidas/ Adidas target market.

Segmentation, targeting, positioning in the Marketing strategy of Adidas

with the four brands of Adidas strong portfolio- Reebok, Adidas, Rockport and Taylor made meant for different segment customer group.

Adidas makes use of differentiated targeted strategy to target younger adults, adults as well as children who have passion for fitness and athletics. Although it targets customers in the age group of 13-40 years but most of its customers are from 15-30 years of age who hail from upper middle class or the luxury class of customers.

User and benefit based positioning are strategies Adidas uses to create distinctive image in the minds of the prospective customers. They emphasize the value of quality products from a trusted brand, Adidas is able to maintain its brand essence.

The brand portfolio is divided as follows.

1. Adidas –performance in competitive sports
2. Reebok and Reebok classics in Active sports and casual sports
3. Adidas originals, Adidas fun, rock port in sports fashion.

Mission in the marketing strategies of Adidas

‘‘The Adidas Group strives to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle. We are committed to continuously strengthening our brands and products to improve our competitive position’’

One of the most popular tagline of Adidas is ‘impossible is Nothing’ This tagline which showcases the importance of fitness and striving hard for anything you desire, is one of the biggest asset the Adidas company has and possibly summarizes the marketing strategy of Adidas.

Competitive advantage marketing strategy

One of the competitive advantage that Adidas has its distribution network, their product quality and its brand equity. Adidas globally has 2400 stores accounting 4.3-billion-dollar business according to 2014 data. Adidas has sponsored many world sport events, such as FIFA, UEFA, MBA, Cricket and Olympics in order to associate itself with the community. At the same time Adidas has been known to give the best product in the market which are comfortable, beyond normal and long-lasting.

It has strong relationship with organizations such as international labor organization, international finance corporation has given the company edge over competitors for a sustainable business

Collaboration: the knowledge of “Yeezy’s” and Adidas Pharell William sneakers’’ are the major reason for Adidas resurgence. Adidas has powerful endorsement contracts with some powerful non athletic superstars like Kanye West and Pharell Williams and use these names to promote their brand efficiently. This marketing strategy of Adidas also work for competitors like Puma as they signed-in famous personalities such as pop star Rihanna for their line of sportswear.

A New Strategy: Limiting Supply: Stan Smith and Superstar are popular Adidas shoe models, who have contributed massively to the revival of Adidas over the years which have been supported by aforementioned endorsements and innovative marketing campaigns.

While other styles such as the Ultra Boost are gaining market share at a massive rate, Adidas is actually limiting the availability of popular shoes ‘Stan Smith and Superstar’ and two models that many consider evergreens in Adidas portfolio. The prices go up when the demand is high but the supply is low – this is the economic rule we all study in school but Adidas applied in their growing years.

This strategy worked well for Adidas in the past also has the potential to help Adidas merchandise margins which has significantly expanded recently. As reported in past earning release, Adidas gross margin has increased by a few hundred basis points, and the recent moves may indicate and attempt to push margins even further if Adidas supply limitation strategy works.

However, the decision to limit the supply of some sneakers may also be a proactive move to avoid overexposure and excessive discounting of Adidas’ products. The number of discounts on Adidas products has increased recently, and the decision to limit the supply of some key products may be a response to the growing pricing pressures generated by excessive supply.

Innovation: The Adidas company ranked No. 3 in global sales in the Apparel/Accessories category in Forbes world largest public companies list, behind only Christian Dior/LVMH and Nike, just announced that by 2024 it would use only recycled plastics in all its shoes and clothing.

This strategy is because of the company’s vision to get rid of virgin polyester overall by 2024. This strategy is not just going to have an impact on Adidas but also have profound implications in the overall fashion industries.

Social media: social media is one of the marketing tools of Adidas when it comes to interacting and connecting with customers, Adidas remains active through the traditional channels, its own websites as well as social media.

Adidas has active Facebook and YouTube channels where it uploads thousands of promotional videos for its products. Adidas also has several twitter accounts including Adidas original, Adidas US, Adidas football that it uses to stay connected to fans and followers. The main focus of all its marketing effort is to bring energy to sports and help athletes achieve.

However, now that it has revamped its strategy and focused its efforts on key areas, results have started coming in the form of financial success. While this could mean an increased challenge for both Nike and Under Armour, Adidas still has a long way to go to achieve its mission.

BCG Matrix in the Marketing strategy of Adidas

With the help of BCG Matrix, Adidas has been able to identify strategy position and future of action of SBU’s (strategic business Unit).

Adidas has four brands under the Adidas group out of which:

1. Adidas & Rebook are stars; both brands have a strong market share but at the same time the competition of this sports and fitness is very high. Other brands such as Puma, Nike also fight a large share of the market.
2. Rockport & Taylor; their market share is low but at the same time there is a good potential for these brand. But when this potential will actually benefit the company in a large way is yet to be seen.

Distribution strategy in the Marketing strategy of Adidas

As the consumer environment becomes even more dynamic with trends quickly changing, Adidas also increase its focus with expectation of these changes in responding with speed. They had aligned their sales with distribution strategy to enable and propel a heightened consumer-devotion.

After analysing the purchase process of their customers, they concluded the interactive experience and the availability, convenience and the size of the product offerings plays a major role in a successful distribution strategy. In order to expand their distribution system, the products are made available through exclusive store, co-branded stores who source it from C&N and distributors.

Brand equity in the Marketing strategy of Adidas

Sports related activities predominantly revolving around social media and community connect programs has helped Adidas to be one of the biggest player in the sportswear. Each brand and sub-brand is responsible for bring its own unique identity and positioning to life, through the creation of products, service and experience that provide platform and frameworks for long-term market share and profitability improvement. While Adidas and Reebok have individual unique identities, heritages, technologies, designs and reputations. The strategic principles and method for driving future sales growth and profitability improvement are common to both.

Competitive analysis in the Marketing strategy of Adidas

Adidas group multi-brand portfolio gives them an important competitive advantage. Through their brand portfolio they seamlessly cover the sports and consumer segments define as strategically important to support their groups ambition and to inspire and to engage people to harness the power of sports in their life.

Adidas is doing very well because they distinct themselves from Reebok, but the brand Adidas has spent so many years trying to firm up, but its situation is fluctuating.

Large firms such as Nike & Adidas have grown immensely over the last two decades. Their global reach has expanded through all continents, which is attributed to the changing lifestyle of developing economies & emergence of Internet, E-commerce firms.

Market analysis in the Marketing strategy of Adidas

Due to the presence of counterfeit product and high bargaining power of customers, it’s very hard for this player to sustain the market. Although the offering is meant for sports persons. But the majority of its buyer are normal people, professionals, and young people who don’t mind switching to other brands due to the changing competitive positioning worked upon by the players.

Industry is growing due to changing life-style, economics of the population and people migrating from rural to urban areas but at the same time demands-supply mismatch and idle inventory is resulting into shrinking margins of the player in this industry.

Customer analysis in the Marketing strategy of Adidas

Adidas customers consist of upper & Upper-middle class social groups. To be successful across consumer segments, Adidas acknowledged that a strategy of mass production or mass marketing is no longer sufficient.

Only by identifying and understanding consumer’s individual motivations and goals for doing sport, their lifestyle, their fitness level, where they are doing sport and their buying habits will help them in creating meaningful products, services and experiences that build a lasting impression and brand loyalty.

SWOT analysis

Here is the swot analysis of Adidas;

Strengths

1. Legacy and heritage; with many decades of heritage and legacy. Adidas has travelled a long way to establish itself as a youthful brand. since 1949 when the brand began till now.
2. Diversified portfolio; the Adidas company deals on multiple product portfolio with varied range of footwear and accessories under the Brand name Adidas
3. Strong financial position; The Adidas company has strong financial position with 2400 stores globally accounting $4.3billions.
4. Distribution network; By selling it from online stores to company owned stores, Adidas has an effective distribution system for their products available through diverse channels.
5. Branding by creating touch points with the community; celebrity endorsements and sponsoring major sports organizations such as FIFA and Olympics has increased the highly targeted customer base as well.
6. Collaborations and membership; Adidas has strong relationship with organizations such as international Labour organization, international finance corporation has given the company an edge over their competitors so they can have a sustainable business.

Weaknesses

1. Premium price range; High price range due to innovative technology and production methods have made the brand affordable to limited customers only, especially in developing countries.
2. Outsourced manufacturing; Adidas has 93%of production outsourced to 3rd party manufacturers mostly to Asia to avail of low labour cost and easy availability of resources. They are running the risk of over dependency on outsourcing especially in Asian markets. Also the overall quality of products perceived by the consumers is a major concern as far as brand is concerned.
3. Limited product line; Adidas and Reebok brands, has got only 2 brands under group although they have deep assortment within these brands. thus,there is more scope for product line expansion.

Opportunity

1. Changing Lifestyle; due to the saturation of developed economies, changing taste and preferences, education and changing lifestyles of developing economies, there is a steep rise in the demand of goods and services.
2. market development; Adidas should enter new markets as it will help them succeed in the future because developed economies already have high competition.
3. Expansion in product line: Expanding its product line will open a new set of opportunities while at the same time it can differentiate itself from the competitors by following this strategy. Increasing demand of premium products: If we only consider the Indian market then there is a growth rate of 33% in demand of premium products. This tells us the future business opportunity & expanding market size of developing economies.
4. Backward integration: This will be smart strategy if followed by Adidas as it will help Adidas to secure their patent rights & also integrate their R&D with the operational team in order to work in open system.

Threats

1. Competition: Although Adidas is a global brand but it is facing fierce competition from other brands like Nike which is No.1 brand and Adidas being in 2nd Position in this premium segment. Besides this, there is regular competition from local players, substitutes and market penetrators.
2. Supplier Dominancy: Due to majority of its production being outsourced; Suppliers have more bargaining power then the company.
3. Government Regulation; with its 35%products manufactured in China and 93% of production happening in Asia, import regulations, also duty and tariffs plays a critical role in the pricing and success of the company.

Conclusion

To sum up, in this 21st century the market place is highly competitive and to stay ahead of others you need a strong strategy. However, strategy is at the foundation of everything you need to excel in a highly competitive and fast changing business environment. During the recent years Adidas has made several changes to its business/marketing strategy for achieving faster growth worldwide.

Adidas is a German manufacturer that started in 1949 and now has 2400 stores worldwide, a revenue of 16 billion dollars with more than 46,000 employees. Adidas is the NO.2 brand after Nike’s NO.1 brand and one of the trio leading in the sports footwear in the World- Nike, Adidas and Reebok (in 2005 Adidas acquired British rival Reebok, for US$3.8 Billion), Adidas core brands are Adidas, Reebok, TaylorMade, Rockport, and Reebok-CCM Hockey. Adidas has several products such as apparel like shorts, sweatshirts, T-shirts, etc, that the young generation used now as a style statement although the main aim is sports, also they produced perfumes, deodorants and other goods like bags, balls, and accessories. Adidas is built on the three basic principles; creating the perfect sports shoe for athletes and regular individuals, creating durable shoes, and shoes that protect and minimize injuries endured by athletes (Jobber, D. Fahy, J 2009).

SWOT analysis for Adidas

Strength; strong financial position as Adidas achieve substantial revenue through its sponsorship>

Distribution network; it has 24oo store worldwide, creates a strong online distribution, and a flexible product line to meet the change in the environment

High Quality due to the high technology they use and the design, their products are known for being long-lasting and comfortable, high brand equity, and customer loyalty. sponsored many sports events like the FIFA world cup since 1970 providing balls, official gear for tournaments and referee uniforms, UEFA, NBA, and Adidas have strong market share, constantly improving quality and upgrading products’ look, feel and image to reach and exceed customer expectations and with innovative features, Adidas use celebrity endorsements such as David Beckham, Lionel Messi, and Run-DMC, Knows it’s target customer very well and working on what they want and needs to get ultimately a satisfied customer, the leader in fashion apparel, it’s logo and name widely known. Lower the price of the products although the pricing decisions are the most difficult decisions in business strategy, gave discounts, offers or increase the promotions for the products to attract customers

Enter some modifications in the products,

There is an expansion in Adidas brands to reach wider customers with casual streetwear, improving operations, increase R&D, advance further in technologies, keep supporting diversity, target more into women’s wear

Adidas make products more stylish, they trended to produce more fashion clothes than sports clothes. Partnership with FIFA till 2030 Adidas’s current partnership with Samsung in producing shoes with an integrated microchip, which transfers wireless biometrics to a phone scheme on an Adidas branded mobile device and displays facts and statistics. Nike is undertaking a similar venture in collaboration with Apple (Adidas Group 2010; Nike 2010)

Adidas’s strengths are the brand value and long heritage, Adidas produces shoes made from recycled plastic waste, and produced 11m pairs in 2019 also produces apparel from recycled material (Abdulla, H 2019).

Adidas, Gap Inc, and Nike have been named in the top five of Better Cotton Initiative’s (BCI) top brands list for sourcing sustainable raw material.

Adidas used sustainable materials such as cotton and ranked as In particular, Adidas, which has been steadily working to meet a 100% Better Cotton sourcing target by 2018, sourced more than 90% of its cotton as Better Cotton in 2017

In 1954 create the first football boots that you can remove their studs. In 2005 create the first shoe that can adjust itself through an in-built microprocessor.

Weakness: relatively high price special to customers in developing countries, Adidas work in red ocean as there are a lot of strong competitors with similar products and even similar promotion in some times which mean that customer can easily switch to another brand, too wide range of football boots selection. Before 1993 Adidas culture was very self-centered, very formal, and very bureaucratic (Khan, O 2014) mainly targeting European markets/countries while there is slow growth due to the rising cost of resources and recession. Adjust the cost of celebrities and the additional sales they bring to the company, also they reflect the brand’s value so if those values don’t match with customer value they might go for another competitor brand, for example when Kanye west described slavery as a choice (Meyersohn, N . Isidore, C, 2018)

Opportunities; Changing in lifestyle and people more aware of their health and fitness, as well as the impact of sports to enhance people’s lives, so, Adidas exploits opportunities both in casual and active wear. with saturation in the current market enter new markets in developing countries such as India while there is a growth rate of 33%, enter fashion marketing through more fashion endorsements, increasing their global market, increasing their visibility through sponsorship agreements. As most of their customer are from generation y who hang on technology, Adidas must increase their online retailer channels, and produce more stylish designs (Adidas 2019)With a new lifestyle Adidas can enter a new users and convey them from non-users to users although it is a difficult task. Adidas can attract suppliers, dealers or customers from other competition brand so they quantity of products will decrease. Increase usage by creating a different shoes for different occasions, looking for channel partners to increase their reach. Adidas focuses on North America to increase its market share for the future, as North America represents 20% of Adidas revenue. ( Storbeck, 0 2018) Focus on emerging markets such as India market, also there is a big boom in china market due to increasing popularity in sports, China is the biggest opportunity for Adidas market to expand, due to the rising income level, strengthen in yuan, Adidas moving to more digitally operation and planning to gain 4 billion euro in online sales by 2020. ( Gibbs, A. Roth, C . 2017)

Threats; saturation in the market, facing aggressive competition from a lot of strong competitors such as Nike which is the NO.1 brand and the topmost Adidas competitor, as well as puma although, the founder of puma and Adidas were brothers in 1948 they had falling out, Fila, Converse, new balance, Many substitutes enter the market with their low price and through the e-commerce, as Adidas compete in a red ocean, most of Adidas customers are a young generation whose behavior and preferences can easily change and switch to other brands especially with changing fashion trends and change in customer lifestyle, as athletic apparel and footwear are highly dependent on fashion trends and customers preferences. Adidas’ mass marketing or product strategies are no longer sufficient as Adidas is keen on it’ brand equity. Increase in counterfeits products impacts on the brand image as well as their profits, and the use of outsources impacts the company’s control over their quality.

Adidas has issues with animal rights and labor law as Some productions are made from animal skin. (Marks, K2012)

Although the sports industry has grown very fast and become a well-established market as well it become a very competitive market and capital-intensive industry so it is hard for a newcomer to penetrate and enter barriers as it needs large economies of scale. So there is expected of a new brand to emerge in the footwear industry (Kloster, M, and Schimmelpfennig, J 2010).

Brexit: 29 March 2019 is a deadline for the British to leave the EU, is it going to be a hard Brexit or soft Brexit, deal or no-deal, or are British lawmakers going to call for a second referendum, as Brexit going to affect the European economy, European customers and ultimately Adidas business as 30% of Adidas business is Europe, so there is a huge impact of Brexit on Adidas business. Taylor, G (2018)

Nike: Established in 1964 by Phil Knight and Bill Bowerman. It initially was called Blue Ribbon Sports Company and was created due to the lack of available quality sports shoes in the current market. They changed their name to Nike about 7 years after founding the company with the ‘swoosh’ logo sign being created by a college student for a mere $35. Now Nike is the number 1 in footwear brand, Besides their shoes, they have their own apparel, accessories, perfumes, and deodorants, with a revenue of 33 billion dollars, (Jobber, D. Fahy, J 2009). Nike took advantage of Adidas’s weaknesses while Adidas does not willing to produce jogging shoes as jogging is not a sport, Nike makes jogging shoes for everyday athletes. In1977 Nike realized the importance of promotion so Nike invest more money in promotion especially in advertising the result was increasing in demand and enable Nike to grow even further. while Adidas realized later the importance of promotion and provide a lot of effort.

In 1978 introduced tailwind running shoe is a sole fill with gas and acts as cushioning it provides stamina and comfort. Although Adidas create the idea before Nike but decided to turn it down

Strategic approach

Adidas strategy

Michael porter generic strategy (1980). The recommended strategy is “lower cost or cost leadership”, ”focus”, and” differentiation”(Griffin 2011).

Both Adidas and Nike working now under a strategic plan that is due to complete in 2020. Now Adidas has a strategic plan called “creating the New” to surge sales by 10-12% and increase their revenue growth, double their digital revenue growth. (Friedman, A (2018)

Adidas uses a skimming pricing strategy, as Adidas’s target customers are the upper middle class and high-end customers, with high price products Adidas attracts customer segment psychologically as a higher price means higher quality from the perspective of the customer, while the low price will affect the brand equity of Adidas. So Adidas use competitive price with a normal product to compete with other competitors like Nike and puma meanwhile its use a skimming price strategy for new products with advanced technique and high quality. Although Adidas outsources a substantial part of its business to external suppliers to reduce the cost and price of the products(Adidas 2019).

Adidas has superior quality products, which generate premium positioning from a customer perspective, it offers a different, higher-end lifestyle that other competitors cannot offer. (Adidas 2019).

Speed strategy, is Adidas’s global strategic business plan, target to become the first fast sports company, in the standard industry the period for production is 18 months(between idea, design, production, and market) but Adidas planning to reduce this period to weeks instead of months as strategic speed plan. (Wright, B. 2018).

stretch their operation in six city centers Los Angeles, New York, London, Paris, Tokyo, and Shanghai, Adidas aims to double its revenue in these cities as they play a significant part in shaping trends, Adidas is hoping to open more stores in India by 2020 with bigger space to give the customers a better experience that is missing from their previous 1000 sq ft. as customer needs more time to see all products which lead to more satisfied customer and ultimately more sales and more profits (Jain, V, 2018).

NIKE Strategy: Nike is known for its high quality, and value for money and they normally target upper middle class and high-end customers, so, they use skimming and competitive pricing strategy. Nike focuses in plunged their price so cut its workforce by 2% in 2017(almost 1400 employees), reduce operation segments from 6 to 4, and concentrate on expanding its operations in only twelve global cities ( such as New York, London, Beijing, and shanghai) (Garcia, A. 2017). Nike invests in research, development, creativity, and innovation as Nike expects that over the next five years 50% of growth will come from Nike innovation. (vault 2019)

A region that represents the greatest growth opportunity for Adidas in the next five years and explains why

Material segment:(plastic, synthetic rubber, plant-based, leather. Adidas recently announced that in 2024 they going to use recycled plastic for apparel and shoes to save the environment ( Indian Textile Journal, 2018).

1. Adidas
2. Nike

Headquarters

Herzogenaurach, Germany 1949

U S 1964

Core sports

• Football, Rugby, Tennis
• Basketball, Running
• subsidiary brands
• Reebok, TaylorMade
• Converse, Jordan, and Hurley

Employees

• 57000 ( Statistics . 2019)
• 73,100 (Statistics . 2019)

Name,

Logo

slogan

Adi (a nickname for Adolf) + Das (from Dassler), three stripes logo come from the trefoil and then the shape of a mountain

Impossible is nothing

Greek goddess of victory

Wing, swoosh

From “Let’s Do It” to “Just Do It”

Revenue in 2017

• $ 19 billion
• $ 34.4 billion

celebrity

• Lionel Messi, Run DMC, Zidane, Beckham
• Michael Jordan, Cristiano Ronaldo, Oscar Pistorius, Wayne Rooney

product

Product segment: athletic footwear (football, tennis, running, soccer, hockey, golf, and others). Nonathletic footwear (sandals, flip flops, boots, dress shoes)

Produce apparel and equipment for different types of sports

In the Middle East, they provide hijab for Muslim women athletes and casual outfit

Apparel, accessories, equipment and

footwear, and golf sunglass with ultra-lightweight (Nike 2018).

In shanghai, Nike opened a skateboarding and snowboarding store with events to target china.

In Arab countries, Nike provides hijab athletes with light and soft materials beside it met cultural requirements.(Kearney, L 2017).

price

Price is high due to the high technology they used also to the high quality of the material used, as a low price cannot create high quality for example Adidas charged for white T mac 4 shoes higher price than the one in the same version but with a different color. The price of Adidas is relatively high, particularly for developing countries

Skimming and competitive pricing strategy. Today they focus on reducing production costs by using the resources more effectively and efficiently. Nike cut 2% of its workforce(Nike 2018)

promotion

Tv, online, billboard, sponsors many players in the different sports areas, have a tagline (impossible is nothing) using celebrity and well-known club, Adidas platform (get Adidas news, tell us what you are interested in and Adidas exclusive offers), OOH promotion such as are you fast enough? Advertise about reebok. (odds by Adidas) when the senior marketing director of Adidas in India announce that “At Adidas, we live a simple principle: No athlete left behind” that ended with the sale of two left shoes and two right shoes as a pair (platmore 2018). point of sale

A smartphone app that provides personalization to customers

Sponsors various sports events. ooh, advertising, Nike has famous personalities, endorsement contracts, and athletes and non-athlete celebrities use them as ambassadors and influencers, big events like the world cup when almost 60% of the players wore Nike boots (Nike 2018). Besides offline Nike uses online such as Instagram, YouTube, Social media, and online advertising

place

Offline (Adidas outlets and multi-brand outlets hypermarkets, specialty stores, others) Online retail (Amazon.com, Myntra. com, Flipkart.com), franchises, smartphone app.

In 2015 growth in Adidas E-Commerce by 500 million.

In 2011, the us, Asia, and Europe started the online Adidas business.

In 2012, Latin America started Adidas’s first online outlet. (Hollensen, S 2014).

Introduced Nike+Running App, 20,000 retail in the U.S, and sell their products in nearly 200 countries worldwide and nearly 1000 own retail (Nike 2018), Nike sells their products in international markets through a number of subsidiaries, licensees, and more than 40 distributors. Most of Nike apparel and other products are produced in outside the U.S. mostly in Indonesia, Vietnam, and china but the equipment in the U.S. and abroad, (vault 2019) .online like Nike.com, Nike+apps Nike expects to double its digital sales by 30% . (Vault 2019)

segmentation

Adidas target different segment customer groups through demographic, psychographic, geographic, and behavioral factor. Adidas operates in eight geographic segments: Western Europe (27.4% of Adidas total revenues), then North America (17.7%), and great china (15.6%) there is a collaboration between Adidas and Wanda group which includes developing football and basketball, increases their saleable, marketable and profitable relationship as well as Adidas sponsoring 2 of Wanda’s Ironman event in china, MEAA (13.9%), Latin America(9%), other(7.6%), Japan (5.2%), and Russia (3.6%).(Adidas 2017).

Demographic segmentation such as sex and age

Adidas has a range of products that suits male and female such as clothing, shoes, perfume, and eyewear also Adidas provide products for kids, today Adidas provide athletic and non-athletic clothes not only for generation y but also for generation x, z. The Edge bounce Adidas shoe is for women who want shoes for mid-distance runs or CrossFit.(Amanda 2019) Psychographic segmentation is about customers’ social class, personality, and lifestyle, so Adidas provides clothes for outdoor activities also clothes for people who like sporty style, all Adidas products are fashionable, good-looking, and also functional. Used the psychological factor that a high prices come with high quality. (Adidas)

Psychographic segmentation: Nike creates events like run with me, and sports improvement clinics, to build customer belonging

Behaviouristic means how the product makes customers feel (you are an athlete, Nike products make you feel athletic), build customer loyalty.(Nike 2017)

Geographic segmentation to target market nation, region, cities, Nike carry out their activities in six geographic segments: Western Europe (18%), North America(46% of Nike’s total revenue), Eastern Europe, and central Europe(4%), Greater China(12%), Emerging Markets (11%) and Japan(3%)(Vault 2019). IN 2030 nearly two billion digital citizens in India, Latin America, and China will introduce to the middle class. And over the next 5-year, Nike’s growth will come from international geographies which will be approximately 75% of Nike’s growth (Nike 2018), partnership with the china super league. For example in India Nike focus its advertisements on cricket, rugby in Australia and England, and football and baseball in the united states. (Nike 2018)

Demographic segmentation Nike targets customers who are between the ages of 15-40 and targets both men and women, currently the revenue sales of products that target women are 20% and there is forecasting for growth in the coming years. Nike produced huarache ultra-shoes for women(Nike 2018), and Nike Hijab for Muslim athletes(Hong,d 2018)

target

In big events like FIFA World Cup, NBA All-Star Game.

Through the social network Adidas targets youth customers their age between 12-16 NEO so they can buy fit skinny jeans. Using its own platform which is the Adidas app, Adidas India provides a stable cloud infrastructure that will fast the purchase cycle three times, they launched Oracle cloud which leads to improved customer experience, staff experience, boost billing process, increase cost savings, increase sales, it is not only used by Adidas Indian retail but also used in online operation.(ENPN. 2018) Targets audience that care about stylish and fashion, Adidas produce broader products to suit different customer need, it targets customers who are working and love sports.(Adidas)

In Japan, Nike launched the Nike SNKRS app.

((Nike News 2018). Nike launched the NTC app for Arab people using the Arabic language. (NIKE 2018)

Position

As position means what a company does to the mind of the customer, so, Adidas invested heavily in major sports events, using high technology and high materials to produce high-quality products, Adidas positioned their products to be faster for example (Dwight Howard Super best) is today the lightest basketball boots, as it makes the basketball players run faster than wearing other shoes (Newsarama. (2010). Adidas is also positioned as a popular brand, the slogan of Adidas is very enthusiastic and sporty. Adidas positions itself as youthful, fashionable, and stylish and it targets the youth. (Adidas)

Using storytelling like (we won it in France), and inspiration, Nike uses endorsements to the impact on physical and emotional needs of customers, for example, endorsers LeBron James as a role model and as a hero. Also used by celebrities, brands, and corporations, like Yeezy 1 and 2, collaboration Nike SB x Diamond Supply Co( Dan, A. Helen, C., And Mark, D 2018)

Conclusion

From the critical evaluation between Adidas and Nike, it appears that there are some similarities and differences between the two brands such as they started nearly at the same time, their strategic behavior, they expanded their marketing globally, and they both reached the global leader in the sporting products industry.

Although Adidas products expanded and reach all continents, they should produce more products and improve the existing products, communicate with customers to know more about the level of satisfaction, and know more about rural area customers what they need and wants, that can happen through more surveys, and encourage new technologies to add innovation to their products.

1.0 Introduction

A multinational company is a company that operates simultaneously in many different countries. In other words, it is an enterprise that operates in more than one country. There are four categories of multinational corporations which are:

• A multinational, decentralized company with a strong presence in the home country
• A global, centralized company with a cost advantage through centralized production wherever cheaper resources are available
• An international company building on the technology or R&D of the parent company
• A transnational company combining the three approaches of the preceding three.

1.1 Mission, Vision, and Values of Adidas.

Mission

To be the best sports company in the world

Vision

We are innovation and design leaders who seek to help athletes of all skill levels achieve peak performance with every product we bring to market.

We are consumer focused and therefore we continuously improve the quality, look, feel, and image of our products and our organizational structures to match and exceed consumer expectations and to provide them with the highest value.

We are a global organization that is socially and environmentally responsible, that embraces creativity and diversity, and is financially rewarding for our employees and shareholders. We are dedicated to consistently delivering outstanding financial results.

Values

1. Performance – Sport is the foundation for all we do and executional excellence is a core value of our Group.
2. Passion – Passion is at the heart of our company. We are continuously moving forward, innovating, and improving.
3. Integrity – We are honest, open, ethical, and fair. People trust us to adhere to our word.
4. Diversity – We know it takes people with different ideas, strengths, interests, and cultural backgrounds to make our company succeed. We encourage healthy debate and differences of opinion.

1.2 History of the Adidas Logo

Adidas was famous for its three stripes logo for a long time, but it was not the first company to use the design. Karhu Sports was the original owner of the logo. Karhu Sports was hit hard by the Second World War, however, and short of capital, the owner agreed to sell Adidas the trademark for € 1,600 and two bottles of whisky. The company unveiled the three-strip logo in 1971 in a form similar to a leaf they called the ‘trefoil.’ This version was later replaced by the current logo, which is shaped like a triangle, although some Adidas products still have the trefoil logo.

1.3 Design Elements of the Adidas Logo

Even before Adidas bought the Karhu Sports Trefoil logo, they added three bars to all their products and called themselves the ‘three strip company.’ The three strips were intended to convey the company’s diversity and international appeal by symbolizing the three major land masses in which Adidas shoes were sold – North America, Europe and Asia.

Adidas added even more meaning and symbolism to their latest logo by transforming the logo into a triangle that looks like an uphill mountain. This mountain is intended to symbolize challenges – a popular theme for athletes who sell their clothes to Adidas. Adidas has also chosen to feature the name of their company in all lower-case font on their logo. This choice represents the casual, informal nature of the Adidas brand.

Lastly, since no particular colour scheme is attached to Adidas logo, Adidas is free to alter the colour of the logo anyway they see fit in order to compliment the design of the apparel they are putting it on.

1.4 Popularity of the Adidas Logo

Apparel companies live and die due to their popularity. They not only need their design to appeal to customers, they also need it to be recognized immediately to work on the most important aspects of their marketing strategy.

For instance, Adidas pays massive amounts of money to get its shoes worn by NBA and beyond pro athletes. The aim is to see these athletes wearing these shoes and to be inspired to buy them. When a basketball player in the NBA wears Adidas shoes on the court, however, there is no publicity that they wear them except a prominent logo on the shoe. Therefore, Adidas relies on people to recognize the logo in an instant in order to make these promotions work.

Luckily, the Adidas logo is recognizable immediately. It is a simple design that has changed very little over the years and does not rely on text that is difficult to see to make it recognizable.

While there is no doubt that people buy Adidas apparel for its quality, the Adidas logo is still the company’s primary sales point. All their clothes have the iconic logo in one form or another, making the logo the main element of their design.

Best of all, Adidas has been able to attach a message to its logo. When people see Adidas clothing or see someone else wearing it, they immediately link quality and athleticism to the clothing. This association keeps many customers coming again and again to Adidas.

Although high – quality logos are important for any company, they are particularly important for companies like Adidas and Nike, which anchor their entire marketing strategy to their logo. Given the company’s international success, Adidas is a great example of how successful a logo can bring to a company when it is right.

1.5 Company Profile

Adidas is 61th ranked brand in the World’s Most Valuable Brands and having more than 92 innovative companies which positioned as the leader in the world market. Also, its world renowned for sports-related products like sports clothing, bags, shoes, watches, shirts, eyewear and other accessories. The founder of Adidas is Adolf Adi Dassler who established a shoe factory with his brother in 1924 and named it Dassler Brothers Shoe Factory. The brothers parted ways to form two different companies on their accord, Adidas and Puma.

Adolf Dassler took the company after the parting ways with his brother and focus on strategies to a fierce battle with Puma. The name of the company is a shortening of the name of its founder, Adolf-Adi Das-ler. For early years, a fierce rivalry ensued between Puma which the company established by Adolf’s brother for became successful brands in market. However, Adidas is still blooming with different innovative ideas and strategies to maintain its reputation against leading brands such as Rockport, Taylormade Golf and Reebok.

Besides, Herbert Hainer is the CEO of the Adidas-Group (AG) and their headquarters is in Herzogenaurach, Germany. The slogan and the company both go along with each other as it says, “Impossible is nothing”. This company is in harmony with sports figures and clubs that produce their products in worldwide market. It is because their grown with more innovative ideas, focused on creating brand awareness and other marketing strategies.

1.6 Achievement

The first sportswear adidas made was for Franz Beckenbauer in 1967. There are several figures have been associated with Adidas like Zinedine Zidane, Allyson Felix and Michael Ballack. One of the main focuses of Adidas is football kit and its associated equipment. Also, Adidas supplies team kits for football teams and clubs of international repute such as A.C.Milan, Bayern Munich, Real Madrid and Chelsea. This company strategies have focused on more successful players, brand extension and innovative public focused brands.

Moreover, the company also distributes referee kits used in international matches and club matches. Adidas has risen to extreme heights of success with more than 1000 stores have establish around the world. It has been successful in creating an influential marketing with good advertising and other marketing tools. Its current slogan is “Adidas is all in” which represent the image of sports fashion with attitude and unified image of sports, music, street and pop-culture. This will be creating significant existence through its good communication strategies for increase awareness in market.

Adidas has a few subsidiary companies like Reebok, Ashworth, Runtastic and TaylorMade-adidas. There are 57,000 people from 100 nations that company hired as employees around the world. Every year the company produce over 900 million sports and sports lifestyle products with independent manufacturing partners worldwide. In 2017, Adidas had generated sales of €21.218 billion. As fashion and sportswear industries, Adidas continued to revolutionize with health and fitness merging into a lifestyle concept to new successes in a digital era.

With the divestiture of its hockey brand CCM and its golf brands TaylorMade, Adams Golf and Ashworth will be contributed to its strategy “Creating the New”. Its focused on its core competencies in footwear, apparel and its major brands Adidas and Reebok. The growing number of sales and company that dominant in the industry can help Adidas to survive in the modern market for competition in the sport shoes industry. It will made Adidas became the top brand of choice for most target markets because of their quality satisfying customer’s needs and wants.

1.7 Organizational Chart

Figure 1: Adidas Executive Board

2.0 The Key Points of Human Resources Practices

2.1 Strengths of Adidas

1. Talent Management

Ability administration refers to hold the representative in the ADIDAS. Thus, ADIDAS utilize this system to build up the old workers that have the chances to their vocation. By utilizing this methodology ADIDAS ready to hold the quality representatives remain in the association and developed the dedication of the workers. Other than that, ability administration additionally incorporate recruitment. Recruitment refers to the procedure of enlist and choosing the qualified new individuals that all together fit to the activity.

2. Employee-oriented leadership

Employee-oriented leadership refers to the communication between the administrator and the subordinates. By utilizing this system ADIDAS ready to realize the representatives need and need. This is on the grounds that this technique comprises of worker criticism framework. Employee feedback system refers to the satisfaction dimension of the workers to the activity. The workers are the inward clients of the association, when the representatives satisfy their activity the efficiency of the association will consequently increment. This is on the grounds that the association given a decent domain to the workers with the end goal to satisfy the representatives and the representatives will do the difficult activity to the association to as the repay to the association.

3. Remuneration

Remuneration implies the pay of the representatives get step by step. The compensation identified with market prerequisite and execution level. That implies ADIDAS set the pay agreeing with market necessity and execution level. The ADIDAS on time pay the compensations with the end goal to give the great notoriety of the association. At the point when the association don’t postpone paid the pay rates to the representatives the representatives will faithful to the association this is on the grounds that the workers will feel the security in the association to work.

4. Bonus

In ADIDAS the compensation comprises of reward. In ADIDAS the individual execution will identified with the compensation. Extra means the organization pay additional cash to the workers to spur the representatives. The principle reason for given reward is to rouse the representatives. Inspiration is mental process giving conduct reason and bearing. By given the reward the workers will put more exertion and hardship to the activity.

5. Long-term incentive programmes (LTIP)

This is practicing for senior administrator, this is three year plans dependent on the accomplishment of monetary and in addition consistence target. So the senior director that accomplishes the long haul focus of the organization will get the reward. The extra was relied upon the association whether the reward is cash or others advantage.

6. Performance management

ADIDAS continually searching for the potential workers in this way, ADIDAS will watch the execution of every representative and give the chances to get advance. Other than that, ADIDAS likewise watch the general population that imaginative and innovative. This is on the grounds that ADIDAS require the people groups that contain the high creative ability individuals to give the plan to deliver the structure of the item. So ADIDAS will see about it and pick the general population that have the potential expertise change to the creation and development group. ADIDAS discovered that the general population who are having diverse foundations, points of view and aptitudes can influence the best group with the end goal to accomplish the most extreme making of the structure on the item. Before ADIDAS framing the potential representatives into a group, ADIDAS will send the workers to preparing. This is on the grounds that the group require contains the distinctive creative energy, discernment and culture. This is on the grounds that ADIDAS is a worldwide association inside the diverse observation can developed a multi-ability group. With this the ADIDAS can oversee huge numbers of the nation culture and propensity with the end goal to item appropriate item to general society.

7. Work-life balance

Work-life balance is adaptable working hour. Adaptable time is a booking arrangement in which full-time representatives may pick beginning and consummation times inside rule indicated by the association. Each employee personal satisfaction ought to be enhanced by attempting to the association. So ADIDAS have the duty to address adaptable working hour. The primary reason for work-life balance is give orchestrate of the private and family needs to the representatives. So the association was consider the advantage of the workers. Moreover, this technique ready to give the representatives a happy with working hour and with the fit family the workers will put more exertion in the working hour. For instance the working hour is 8 hours out of every day. The representatives can choose their working hour in the day and the single amount of the working hour 8 hours. On the off chance that the worker begins working at 11:00AM so the representative leave the association in 19:00 PM.

2.2 Weaknesses of Adidas

1. Work culture

As made reference to before despite the fact that Adidas is fruitful at incorporating little organizations it has a lot of inability to consolidate firms that have diverse work culture.

2. Developing players in the business

Interest in Research and Development is underneath the quickest developing players in the business. Despite the fact that Adidas is spending over the business normal on Research and Development, it has not possessed the capacity to contend with the main players in the business regarding advancement. It has appeared to be a develop firm anticipating bring out items dependent on tried highlights in the market.

3. Financial planning

Budgetary arranging isn’t done legitimately and productively. The present resource proportion and fluid resource proportions propose that the organization can utilize the money more productively than what it is doing at present.

4. Organization structure

Association structure is just good with present plan of action subsequently constraining extension in contiguous item portions.

5. New entrants

The organization has not having the capacity to handle the difficulties present by the new contestants in the section and has lost little piece of the overall industry in the specialty classifications. Adidas needs to construct interior input component straightforwardly from deals group on ground to counter these difficulties.

6. High attrition rate in work force

Contrast with different associations in the business Adidas has a higher steady loss rate and need to spend significantly more contrast with its rivals on preparing and improvement of its representatives.

7. Demand forecasting

Not great at item request determining prompting higher rate of botched chances contrast with its rivals. One of the motivation behind why the day’s stock is high contrast with its rivals is that Adidas isn’t great at interest estimating in this way wind up keeping higher stock both in-house and in channel.

2.3 Adidas crisis

• Child labor scandal hits Adidas

They are definitive grown-up toys for games stars and road cognizant youngsters. With their trademark three stripes, Adidas garments cost a little fortune to purchase and are advanced by world-celebrated names, for example, England captain David Beckham, Olympic heptathlete Denise Lewis, and Russian tennis player Anna Kournikova.

Be that as it may, the organization will this week wind up entangled in contention when the European Parliament knows about the brutal treatment of representatives in Indonesian sweatshop production lines providing the German combination.

The Parliament will be informed that garments for Adidas were made in two industrial facilities utilizing kid work, constrained additional time and inappropriate behavior. Agents of specialists in two Indonesian industrial facilities providing the German company,will reveal to Euro MPs that in the Nikomax Gemilang and Tuntex processing plants, in the Indonesian capital of Jakarta, kids as youthful as 15 were:

• Made to work 15-hour days;
• Anticipated that would do something like 70 hours per week and rebuffed for declining to do additional time;
• Paid under $60 per month, rates beneath the International Labor Organization’s interest professionally wage;
• Punished for disappearing amid therapeutic challenges and had illicit conclusions taken from wages as disciplines for minor misdeeds.

3.0 Recommendation

Adidas needs to make an item separation and improvement methodologies for both unused and existing markets through innovative advancement which is fundamental to accomplishing economical authority in sports industry. As Adidas has the big name it is their responsibility to maintain a clean image. Adidas was looking the proficient as the individuals of the families. Adidas should treat and practice to treat their workers as their families individuals, care around the private division of the workers. So with that condition Adidas was able to perform well within the advertise. Adidas should been doing these since Adidas found out that most of their workers want the cheerful the efficiency of the association will increment quickly. From what have been comment to Adidas, they should recruit individuals that from other competitors.

Next, Adidas team should recruit the qualified people to work with them. Enlist the quality individuals from the competitors can diminish the efficiency of possess. Selecting the quality people was never easy because of some people tend to not their job properly and that make some brands have the bad image because of some of their workers. Adidas an also select the quality people groups from competitors is the great ways to discover the potential representative in the event that the association was need of the potential representative. Adidas also can ensure that all their workers that enough time to rest and have a work balance between works and their own living. This is to make sure that all of them when work are exposed to the positive environment. When workers are in the right mood they will works happily and give the best services to the customers. A good workers always give a pleasant to the customers. It is their duty to make customers feel satisfy and happy before their leave Adidas store.

Besides, the association moreover have to be anticipate the self-workers go to the other organisation. For this, Adidas was did well this can be since Adidas comprise of adaptable of working hours, ability administration and executive administration. These technique might construct up the dependability of the workers in arrange to participate the worker to take off the association and work with the competitors. We can be sure that majority of the customer are quite satisfy with Adidas product and services. Since customer have no question within the strength of fabric that utilized in delivered Adidas item be that as it may in term of cost and design, Adidas might have to be put in more exertion and come and out with the most up to date plan that can pull in more clients. Adidas can moreover dispatch an advancement or give an extraordinary offer of cost in a certain period of times to extend the deals volume and pull in more clients.

4.0 Conclusion

In a nutshell, Adidas is one of the organizations that create the best shoes on the markets. They have created and provide the excellent shoe with varieties of choice when it comes to findings the right shoes that fit for their customers. Each shoes that produced by Adidas has their different description that the customers will find appealing along with different prices. Each customer is very satisfied with Adidas product and services that been provided. Adidas was also one of the organization that prioritize both of their employees and customers. They always give their full attention to their employees in term of giving the benefits in many factors which this could make they receive the loyalty from their employees and make their employees become more motivated than before. Once their employees become more motivated than before, this could lead to the productivity of the organization and increase their profits.

In term of customer services, it could be confirmed that all the customers are quite satisfied with Adidas services that been provided to them. They could improve more and better services in order to satisfied their customers which they could see their customer happy face each time they enter and leave the shop. They might also maximize their profits. So far, all Adidas’s customers have no doubt in the durability of materials that been used in producing Adidas products but they were some dissatisfaction in term of the price and design, which Adidas might ought to put in more exertion and come out with a most up to date plan that can draw in more customers in different range of income. This also could attract more customer which are able to purchase various product offered by Adidas. Adidas also could dispatch an advancement or allow an extraordinary offer of price in a certain period of times to increase the sales volume and pull in more customers.

Other than that, Adidas could also need to differentiate their product from its competitive which they could come out with some new and creative idea in term of their advertisement to promote their products. They could make their products become a memorable brand name in customer mind-set with inviting famous athletes or artists as their brand spokesperson. It can be conclude that Adidas is one of the best organisation which that consists of many benefit both to the employees and customers.