This paper aims to analyze the business situation of Adidas to define marketing strategies for its business. Thus, this paper applies Porter’s Value Chain analysis model to analyze the internal situation analysis and PESTLE analysis to analyze the external situation of Adidas. Then, this paper conducts climate analysis, market analysis, and customer analyses. The finding shows that the key forces from the external business environment for Adidas are government policies and tax issues, economic fluctuation and volatility of the currency, technological disruption and innovation, changes in social and demographic factors, legal issues and environmental factors.
Adidas is slow to market growth because industry growth is comparably slower. In addition, it is facing a great competitive environment where the key rivals are Nike, Puma and Callaway Golf Company. Key market segments of Adidas are about 160 countries around the world, strategic locations such as big shopping malls and retail stores, children, young, adults, middle class and luxury class, a customer who look for quality products. The key strengths of Adidas are brand image, product ranges and quality, increase trend in revenue and profits. However, the customer expects lower prices and a more convenient buying process. The threats are its competitive rivals, globalization, political, economic, social, technological, legal, ethical, and environmental issues.
However, it has a huge opportunity to increase its customer base and market share, revenue, and profit with brand reputation. In these cases, the key recommendations for Addis are to increase CSR activities for brand awareness to develop product lines to attract new customer segments, apply merger, and acquisition strategy for emerging market development.
Table of Contents
2.0 Situation Analysis (Internal/external)
Porter’s Value Chain Analysis of Adidas.
PESTLE analysis of Adidas.
3.0 Climate analysis.
4.0 Competitor analysis.
5.0 Customer analysis.
6.0 Market segmentation.
7.0 SWOT analysis.
SWOT Analysis of Adidas.
Appendix: Personal Statement
According to Cohen (2015), marketing is the science of creating, delivering as well as exploring the values for business to fulfill the target market’s needs. Kotler and Armstrong (2017) stated that marketing mainly recognizes the unfulfilled needs of target and potential customers. In addition, it also measures, quantifies and defines the size of the identified marketplace. The chosen organization for this assignment is Adidas.
Adidas is a well-established company in the apparel industry in the world. It sells shoes, clothing items and accessories to its customers. This assignment is divided into six key parts. Firstly, this assignment is analyzed the situation analysis of Adidas. Porter’s Value Chain analysis model is used for the internal situation analysis and PESTLE analysis is used for external situation analysis. Secondly, this assignment is analyzed by the climate analysis of Adidas. Thirdly, this assignment is analyzed by Adidas’s competitor analysis. Fourthly, this assignment is analyzed customer analysis of Adidas. Fifthly, this assignment is analyzed by the market segmentation of Adidas. Sixthly, this assignment is analyzed by Adidas’s company analysis. As a result, SWOT, TWOS, and Ansoff Matrix models are used to do the company analysis. Finally, several recommendations are provided to the Adidas Group for its future activities.
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2.0 Situation Analysis (Internal/external)
This section analyses the situation analysis of Adidas. To analyze the internal situation analysis of Adidas, Porter’s Value Chain analysis model is used. In addition, to analyze the external situation analysis of Adidas, the PESTLE tool is used.
Porter’s Value Chain Analysis of Adidas
As Reese and Gerwin (2016) note, value chain analysis or VCA is the process in that a business organization recognizes it’s both primary and support activities which add value to the final products as well as analyze the activities to increase differentiation and minimize products’ costs. Value chain analysis is very significant to identify the internal activities of a firm (Schmitz, 2016). The value chain analysis includes two activities including primary activities and supports activities. The primary activities consist of inbound logistics, operations, outbound logistics, marketing & sales and services. In addition, the support activities consist of procurement, human resource management, technological development and infrastructure.
Diagram: Porter’s Value Chain Analysis Source: Kotler and Armstrong (2017)
Adidas’s value chain analysis
In terms of the inbound logistics of Adidas, its sourcing is constantly moving to a local provider. On the other hand, in case of quality as well as expenses, suppliers of Adidas are mainly picked by its environmental performance. These processes support Adidas by minimizing their delivery costs (Adidas Annual Report, 2016).
In terms of the outbound logistics of Adidas, it has three main distinct channels including Retail, E-commerce and Wholesale in form of MiAdidas. It controls its channel operations by creating proper practices. On the other hand, Adidas has key three store-formats including core stores, factory outlets and brand centers which are recapping about 2,270 stores over the world (Adidas Annual Report, 2017). These formats of stores help Adidas because it permits high brand-control as well as improves its customer service. In addition, Adidas permits customers to adapt cleats by depending on their wants or needs (Adidas Group, 2016). On the other hand, these support Adidas to reduce its stock-holding expenses.
Adidas Annual Report (2017) stated that in terms of operations of Adidas, 95% of its production has been outsourced. In addition, it has about 1,230 self-regulating industrial facilities in 69 countries including China, Indonesia, India, Vietnam, Thailand etc. Moreover, Adidas operates with its business collaborators who are totally devoted to safe working conditions. There are also some collaborating methodologies of Adidas with its key suppliers including preparing materials, direction, workshops, training etc.
Marketing and Sales
In terms of marketing and sales of Adidas, it increases the majority of its customers by promoting its products. Adidas’s offer items are met in four areas over the world including North America, Latin America, Europe and Asia. In addition, Adidas increases its income through the advancements of world-class donning events including World Container Soccer, Olympics and other events (Adidas Annual Report, 2017). O the other hand, some underwriting contracts with its competitors such as Kevin Garnett and Tim Duncan (ball), Sergio Garcia (golf) and David Beckham (soccer) impact its customers positively to buy Adidas.
According To Adidas Group (2016), Adidas has special teams for its different operations to maintain the supply chain management that sources the raw materials and connects with suppliers for production as well as product delivery.
Human resource management (HRM) is a significant factor for Adidas. It had about 56,888 employees as of 2017 (Adidas Annual Report, 2017). Adidas has also concentrated on creating a better culture in its workplaces which promotes diversity or inclusion and a collaborative environment. In addition, it takes several strategies for the development of its employees.
Technology is the other key factor of Adidas. It spends a lot in this sector to develop its marketing. In the previous few years, Adidas has spent heavily on its digital technology. The growth of this brand has come from huge investments in its technology area. Its e-commerce site serves many customers in 40 countries over the world (Adidas Group, 2016)……………….