1.2 Executive Summary
Adidas is the one of the world’s largest sporting outfitter and has a solid history of producing the most technologically advanced and highest quality sporting equipment and footwear in the market. Adidas dominates the market having a stronghold of about 24% of sporting and athletic footwear. It trails slightly behind the world’s largest sporting outfitter, Nike, which holds about 35% of the market share. As Adidas continues to innovate and develop new marketing strategies that 11% of the market share gap will continue to shrink and one day possibly overcome Nike’s world dominance. Many professional sports teams and athletes embrace Adidas to put them in the forefront of their leagues and trust that Adidas will help them come out on top of their competitors to claim victories and championships. Adidas will not quit expanding until they are on top, and take control of the global market.
1.3 Introduction ; background of Adidas
Adidas is a German founded company manufacturing athletic footwear and apparel. They are the largest sporting outfitter in Europe and the second largest sporting outfitter in America and the rest of the world, the largest being Nike. Adidas strives for innovation constantly creating new technologies to help boost performance in the world of athletics. Every day they come closer and closer to overtaking their biggest competitor.
Adidas was founded by a German man named Adolf Dassler. The name “Adidas” comes from an abbreviation of its founders name.The iconic 3 stripes takes after the mountain formation in Herzogenaurach, Germany, which is the the locations of Adidas headquarters. The company began producing shoes shortly after World War 1. The shoe had its first appearance at the 1936 Berlin Olympics, the American track and field star Jesse Owens wore the shoes during this event and was claimed to be a gift from Adolf Dassler. His medal winning performance gave light to the company which kick started the global company.
2.0 Macro Environment Analysis PEST
2.1 Politics, rules, and regulations
Adidas is a global company that imports and exports their products worldwide. Each country has its own taxation system and rules that Adidas has to follow for each sale they make overseas in different countries. Like many global companies, Adidas has their products manufactured in third world countries to lower its costs. Manufacturing in this manor is frowned upon in many business communities which can slightly impact its sales but only by a miniscule amounts. Adidas has to follow International trade agreements, labor laws, product safety laws, and consumer safety product regulations.
Some of the factors that impact Adidas is that they are considered high end products. Not all consumers can afford Adidas’ products so they are missing out on lower class markets. Creating products that all consumers can afford is something that Adidas can improve on to help them expand their global stronghold. Shoes are a necessity in many countries but Adidas shoes aren’t affordable for many people making them a “leisure item.” This causes a counterfeit issue, people are creating counterfeit copies of Adidas which are cheaper and almost identical to the real thing which can put a negative impact on their sales.
2.3 Society and Culture
Adidas manufactures footwear for all ages and lifestyles. Through technological advancements in their footwear they create shoes for all types of people. People have different health issues, and the ability to cater to all types of people broadens their sales possibilities. Adidas has a big involvement in the Olympics which is watched globally and has the possibility to bring in new customers all around the world.
Adidas strives in the technology department, as they are always trying to create the latest and greatest products. They test their products under all types of conditions to cater to every type of athlete. Adidas also has got onboard of the online sales train, making theeir products accessible ro purchase online has greatly increased the amount of customers they can reach across the world.
2.5 Opportunities and Threats
An opportunity for Adidas that was previously mentioned is online sales. Anyone that can access the internet now has an option to purchase their products which greatly increases their customer base. Another opportunity for them is to create a more affordable line of products to reach out to the lower income market making it possible to purchase products no matter how much a money someone acquires. A large threat to Adidas is counterfeit products, china is known for making knockoff products of all high end companies and this can put a dampen so the company’s sales revenue.
3.0 Competition Analysis
3.1 Primary Competition
Adidas’ primary competitor is Nike. Nike is a power house when it comes to global dominance in athletic footwear. Adidas has always been in the shadow of Nike from advertisements or technological advancements. Taking down this goliath of a company is no easy task but Adidas has never let that slow them down and will continue to fight the uphill battle to hopefully one day take a larger hold of the market.
3.2 Secondary Competitor
In the big picture of Athletic footwear companies Adidas does not really have a secondary competitor since they are the second largest sporting outfitter. However, if there is a secondary competitor it would have to Puma which is a company created by Adolf Dasslers brother. Adidas is by far bigger than puma, but to put things into scale Adidas would be the Nike to Puma.
4.0 Target Market Analysis ; Segmentation
4.1 Target Market Analysis
Adidas’ customers are typically those that do not want to follow the norm and buy into Nike like the majority of the population. Adidas’ target customers are athletes of all kind, they innovate their products often so they try to attract people that always want to have the latest and greatest products. Adidas advertises to athletes and people that like to have the new style of shoes. Adidas’ customers tend to be very loyal and stay with their products. For example, there are “Nike people” and “Adidas people.”
4.2 Target Market Segmentation
Adidas markets to customers who strive to have the latest and best products. They advertise having the best technological advancements in the market. Adidas also markets to top tier athletes, and doing this it markets to amateur athletes. Marketing to top tier athletes causes a amateur athletes to think, “If I had this product I could be as good as the best athletes.” They market to athletes all around the world broadening their customer base greatly.