KEVIN V.

CABRERA
Adidas mission is to 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. Meanwhile, the vision is to enhance social and environmental performance
in the company and the supply chain, thereby improving the lives of the people
making our products.
In order to not get left behind in the global competitive position on manufacturing
sports apparel, the adidas made an outstanding strategy to maintain their position
in the said matter. The adidas focus on many objectives; the adidas team used
different strategies, it includes the use of SWOT Analysis, ANSOFFs Matrix etc. that I
will discuss as we go further on my report.
So, Adidas AG is one of the major sports apparel manufacturer. It consist of Reebok
Sportswear Company, Taylormade Golf Company, Maxfli Golf and Adidas Golf. It was
said that it is the second largest sportswear manufacturer of the world after Nike.
The company was founded by Adolf (Adi) Dassler in 1948 and is named after him.
But the story started way back in 1920 when Dassler and his brother Rudolf Dassler
started making shoes Herzogenaurach, near Nuremberg. His brother, Rudolf, is also
a establisher of a another sports good manufacturer company which is Puma. The
group is actually named as Replica Adidas Shoes.
To be able to understand, what the adidas do to their strategy to stay on top of the
sports apparel industry. The team use the SWOT analysis in order to identify the
main strategic issues in maintaining their global competitive position. SWOT
analysis of Adidas involves the evaluation of its internal as well as external
environment. In order to be ahead of the curve and to gain more and more profits,
Adidas always attempt to develop new opportunities which make it highly prone to
risks.
Moreover, talking about the SWOT analysis of adidas. There are three key strengths
of adidas group. First of the strength is the Renowned Brands this is one of the
major strengths of the company. The adidas group possess brands like Reebok,
TaylorMade etc. The brand loyalty of the strong brand image of Adidas has enlarge
which in turn has led to increase in profits. It is the brand reputation which has
helped Adidas to be the market leader in almost every part of the world. Second is
the Extensive Marketing Infrastructure due to this extensive marketing
infrastructure and advertising, they had been able to undergo market penetration
which helps them to draw more profits. Third is Diversity and Variety According to
the Corporate Website of Adidas We will remain committed to understanding,
valuing and incorporation the diversity into the corporate culture of the Adidas
Group This helps them in market penetration and gain competitive advantage. The
company has achieve strong reputation in every part of the world due to its nonstop innovative technology and continuous introduction of new brands. Next is the
weaknesses, the main weakness of adidas was the Underperformance of Reebok
the affiliation between Reebok and Adidas was basically an attempt of Adidas to
gain more market share in US (nikes own turf). Adidas wanted to dare Nike on its
own home land. The adidas made a friendly takeover and both of the companys
stock prices started to improve after the announcement. But unfortunately the sales

of Reebok dropped almost $1 billion to $912 million. The poor performance of

Reebok continued from the very time since the last months of 2005. Adidas admit
that the merger is not that successful as it was supposed to be and causes for the
failure of the takeover were fully attributed to Reebok.
In addition to, the SWOT analysis. For the opportunies is the Growing Demand in
Sports Equipment as said to the source since 1960, sports has changed a great
deal and it made the industry of sports equipment to a multibillion dollar industry as
a virtue of the change. Also as estimated the population will continuously grow so
theres a big capability of large demand for goods. So, Adidas need to step up their
strategies to the next level in order to avail maximum benefits. Second, the
Emerging Markets emerging markets accommodate the 75% of the worlds total
population and have a high birth rate. As more population means more sales. The
company is doing very well for its brand popularity in the emerging economies.
Such as, market share in India. After the Beijing Olympics the company increased
sales in China also Southeast Asia and Eastern Europe are also emerging markets.
Third, the Developing Technology according to the 2009 annual report, the
company is planning to use new technology that will be applied into new upcoming
new brands. Lastly the threats, first of the list was the Competition they had a
tough competition to nike ( the No. 1 in the industry) and Puma (No. 4) realizing that
Nike was never on the back seat. Nike is the most tough and giant competitor of the
company. Second, the Increased Raw Material Costs they are forced to think of
closing some stores at the end of previous year because of the higher raw material
and wage cost that threaten them. Third, is the Economic Recession reduction of
business activity is one of the biggest threats which almost every business is facing
right now. Fourth and last of the list is the Counterfeit Products this has been a
key threat to Adidas over the past years because of the market was full of
counterfeit products which resemble the genuine product and are made to deceive
the customers.
As the Adidas group believes that the market development and market penetration
is the key to sustain its global competitive position. They come up with an idea of
applying the ANSOFFs Matrix which identifies growth strategies for future. On the
section of Market Penetration we got Global Brand Visibilty Adidass global
branding visibility is its innovation. It creates a very good image when it comes to
its products. That is the why there is a worldwide awareness of Adidas brands.
Second was Advertisements/Sponsorships the method of market penetration
followed by Adidas is aggressive advertising. They use aggressive advertisement
strategy to gain more market share within existing products in existing markets.
They had also a tradition of making reputed sportspersons, with a lot of fan
following, their Ambassadors. These include Mohammad Ali, Derrick Rose, David
Beckham, etc. overall Adidas carries out an extensive advertising which helps them
to penetrate the market effectively. Second on the ANSOFFs frame was the Market
development. First on the line was the New Markets In order for the team to
develop markets, they are always on search for a new markets. Second is New
Distribution Channels in Emerging Markets Emerging markets open new channels
for Adidas. Similarly, after the sponsorship of Beijing Olympics Adidas opened the
biggest Adidas store in Beijing. Third on the ANSOFFs frame was the Product
Development. First of their list is New Products Adidas is known on producing new
products from time to time. Through their continuous introduction of new products
in the market, the company has able to enhance its strong recognition. Second is

Relevant Modified Products through technological innovations of Adidas it had led

them to the modification of products. Adidas has formed brand teams to conduct a
research about customer needs so that products are renewed and modified
according to those needs. Last of the framework is the Diversification. The first one
is Diversification of Products in Athletics, Cricket & Hockey it help Adidas in
competing in the markets of huge competition. Since the group has a strong hold on
soccer and basketball product line. It will help Adidas to be a market leader in new
market. Seconds is Casual Shoes In order to minimize competition and increase
profits, Adidas has implemented a new strategy which called multi-brand. This helps
them in the times of fierce competition and provides them a competitive advantage.
Adidas marketers need to enhance their product reputation more. Adidas needs to
come out of the family rivalry with the Puma manufacturers and needs to focus on
the competition with Nike and modern markets.