Table of Contents
2.0 Audit on Adidas.
2.1 Adidas’s product line and brand.
2.2 Market covered by Adidas.
2.3 Adidas position in EU market
2.4 Adidas position in the China market
2.5 SWOT Analysis of Adidas.
2.5.1 SWOT Analysis of Adidas EU Market
2.5.2 SWOT Analysis of Adidas EU Market
2.5.3 Finding of SWOT analysis.
2.6 Adidas’s Product lifecycle.
2.6.1 Adidas product lifecycle in the EU market
2.6.2 Adidas product lifecycle in China market
2.6.3 Finding of Adidas product lifecycle.
2.7 Adidas BCG matrices.
2.7.1 Adidas BCG matrix in the EU market
2.7.2 Adidas BCG matrices in China market
2.7.3 Finding of BCG matrices.
2.8 Marketing mix of Adidas in EU and China market
2.8.1 Adidas marketing mix is analyzed for China and EU markets.
3.0 Adidas positioning and brand analysis.
3.1 Brand Elements.
3.2 Name – Adidas.
3.3 Logos and symbols.
3.5 Position in a competitive marketplace.
4.0 Audits on Adidas’s competitor (Nike)
4.1 Competitors’ positioning of global marketplaces.
4.2 Competitor (Nike)’ products, brand, and strategies.
6.1 Recommendations for Adidas.
Backward, Forward, or Horizontal Integration.
6.2 How the competitors might react to the recommendations provided.
6.3 Recommendations for reaction to competitors.
This paper conducts an audit on Adidas’s brand positioning in comparison to its key competitor, Nike. Adidas is one of the leading brands as a sportswear manufacturer in the world. Adidas is now operating worldwide with five sub-brands that are Reebok, Runtastic, Ashworth, Matix, and TayorMade-Adidas. More than 55,000 staff are now working devotedly and dedicatedly for Adidas to continue its revenue and profits growth. Adidas gained €19.291 billion in revenue, 1.5 billion in operating income, and 0.72 billion in net income in 2016 (Adidas Annual Report, 2016). On the other hand, Nike, which is the key competitor of Adidas, is also leading that designs, develops and manufactures footwear, sportswear, apparel, accessories, and markets and sales in the global market.
More than 62,000 skilled and experienced workforces are now working hard for Nike to bring its success. Nike gained $30,601 billion in revenue, $4.175 billion operating income, and $3.273 billion net income in 2015 (Nike Annual Report, 2015). This paper first compares the product ranges and competitive positions of Adidas to its key competitors Nike. Then, the performance of Adidas business in different markets is evaluated and analyzed by comparing it with Nike’s performance. Finally, this paper provides recommendations for Adidas to continue its success in the global marketplace.
Our Recommended Resources:
2.0Audit on Adidas
2.1 Adidas’s product line and brand
The vision of Adidas is to dominate the global market in the footwear and sportswear industry. The mission of Adidas is to attract and satisfy its customers by helping athletes and ensuring products and integrity at all levels (Adidas Group, 2016). Adidas has a wider range of products in major global sports including football, running, and rugby. It designs, develops, and manufactures footwear and sportswear, apparel, training materials and equipment, and services. Adidas is continuously developing its products through strategic direction, effective management, and operational process to increase its brand image, customer retention, and loyalty. Adidas has now developed a strategic business plan, called “Creating the New” to increase brand desirability by 2020. This means this plan focuses on a brand by connecting and engaging consumers, and driving significant improvement in brand desirability and increasing customer relevance. Therefore, Adidas is gaining its market share in its all market segments and all categories of products, and it has a stronger brand position (Adidas Annual Report, 2016).
2.2 Market covered by Adidas
According to Adidas Annual Report (2016), Adidas is now operating in global markets including the US, EU, UK, China, Japan, Middle East, Southeast Asia, Russia, and South Korea. Adidas and Reebok brands do all business activities through retail and wholesale distribution channels in every single market segment. Adidas is now operating with some other brands including Taylor Made Adidas Golf, Runtastic, CCM Hockey and other brands including Five Ten and Y-3. In each market segment, operating expenses are related to marketing costs, point-of-sales costs, costs related to administration, logistics, and sales forces. Adidas sales grew in Western Europe (17%), North America (24%), China (22%), Japan (30%), and MEAA (12%) in 2016. However, Adidas’s sales decreased in some market segments including Russia (8%), Latin America (3%). Overall, Adidas is doing better performance.
2.3 Adidas position in EU market
The study shows Adidas revenue increased in the EU market by 17% from €4.539 billion in 2015 to €5.291 billion in 2016. In addition, gross profit increased by 9% from €2157 billion in 2015 to €2350 billion in 2016, and the operating profit increased by 5% from €909 billion in 2015 and €951 in 2016. The key sales increases were seen in football and training categories. The revenue of the Reebok brand increased to 18% in 2016. For this brand, double-digit sales growth was seen in classics and training categories. From a country perspective, double-digit revenue grew for both Adidas and Reebok brands in the UK, France, Germany, Spain, Poland, and Italy.
The favorable product, pricing, and channel mix along with the lower cost of sale had a positive impact on the growth and performance of Adidas and its sub-brands. However, 3.1% of the decreased trend was seen in gross margin that dropped from 47.5% in 2015 to 44.4% in 2016. In addition, fluctuation in currency rate and 12% of increased operating expenses (from €1.248 billion in 2015 to 1.398 billion in 2016) affected the business performance. The expenses mainly increased in logistic, marketing, and point of sale areas. Therefore, the margin of operating profit was down by 1.1% from 27.5% in 2015 to 26.4% in 2016 (Adidas Annual Report, 2016).
2.4 Adidas position in the China market
Sales growth for Adidas grew by 22% from €2469 billion in 2015 to €3010 billion in 2016 and sales growth for Reebok brand increased by 22% from €2411 billion in 2015 to €2944 billion in 2016. Adidas grew 28% revenue on a currency-neutral basis, where double-digit sales grew in football, running, and training categories. Reebok increased its sales by 17% on a currency-neutral basis, where double-digit revenue increased in classics, running, and training categories. In China, Adidas grew 0.4% gross margin from 57.1% in 2015 to 57.5% in 2016 because of favorable input costs and favorable product channel and pricing mix. However, operating expenses increased from €545 million in 2015 to €671 in 2016 because of the increase in the cost of sales, marketing investments, and point of sales. Operating expenses increased to 0.2% from 22.1% in 2015 to 22.3% in 2016. Because of gross margin improvement, operating margin also increased to 0.1% from 35.1% in 2015 to 35.2% in 2016. Overall, Adidas increased its operating profit increased by 22% from €866 million in 2015 to €1.060 billion in 2016 (Adidas Annual Report, 2016).
2.5 SWOT Analysis of Adidas
SWOT analysis is a technique that is used to evaluate the strengths, weaknesses, opportunities, and threats of a business (Kotler et al., 2014). This means this technique analyses a business’s internal (strengths and weaknesses) and external (opportunities and threats) environment. However, Palmer (2015) stated that this technique mainly focused on a business’s internal performance, rather than external performance. Therefore businesses need to apply other tools (like PESTLE analysis and Porter’s Five Forces model) to analyze the business’s external environment (johnson et al., 2015). A SWOT analysis is done for Adidas…………..
For Full Documents Click Download Button