Adidas’ Strategic Evaluation and Recommendation
Adidas is a multinational corporation that deals with sportswear. The company deals with the production, designs and the creation of sports clothing and accessories. The company has been able to develop to become one of the leading companies in the world with its products being sold across the globe (Mahdi, Abbas, Mazar, & George, 2015). The company faces a lot of competition from some of the leading companies in the market like Puma and Nike. However, the company has a competitive advantage as the brand is respected for its interests in making sure that the athlete wears what he wants. Besides, Adidas has a large market share in Europe and this enhances its prospects of profitability in competitive sport apparel industry.
Business Level Strategies
The business level strategies relate to implementing technology in various activities of the company just as other large companies do. The concept of improving on technology will help Adidas catch up with other companies like Nike, which appears to be capitalizing in this front. For example, Nike has placed gadgets inside their shoes meant to help or assist in measuring the heartbeat and the kilometers that an athlete covers. Adidas should develop its technology to compete effectively with the rest of the companies. Besides, Nike is one of the main competitors of the company when it comes to sports shoes (Deac & Stanescu, 2014). While seeking to deal with the issue of the prices, the company should make sure that its products are diversified enough to allow consumers to afford the shoes and have a selection of the products that they want to purchase. This will help the company in like those for high income, the medium earners. and the low earning individuals (Mahdi, Abbas, Mazar, & George, 2015).
In this strategy, the company can advertize in the the history of the company and its strengths to the market. This will help in enlarging the brand in the USA and others like China and India. The company has its core values being authenticity, inspiration, honesty and commitment. Adidas uses these values in measuring itself and its partners. Its corporate mission is to be a global leader in the sporting industry by on passion and meant to compete effectively in the market due to the provision of a good sporting lifestyle. The best ways to realize this leadership in the global market is through the emphasis on brand strengthening and development. Brand strengthening can be achieved through advertising and promotion that will first create brand awareness (Rudolph, 2016).
Adidas also focuses on maximizing consumer impact and increasing the profitability of the company through having five different approaches. One of the strategies is matching the structure of the company to that of the consumers. In this case, Adidas anticipates and fulfills the desires and the needs of the consumer. Having to fulfill the needs of the consumers means that the company will not only attract new customers but will also retain those who have been buying from the organization (Mahdi, Abbas, Mazar, & George, 2015). As stated in the business level strategies, the company should have potential in the extension of the product design and the innovation. Innovation and product design mean that the company will develop products that can compete effectively in the market and fulfill the imaginations of the consumers. The other strategy at the corporate level is the development of leading positions in all the major markets and categories in which the company operates (Deac & Stanescu, 2014). Adidas also desires to excel in execution through the process of improving the product quality and the delivery. The increasingly competitive market across the globe is consistently becoming a challenge for many organizations. For this reason, it is important for Adidas to focus on financial health where there is a tight management of the working capital and giving a lot of attention to the indicators that the company has financial health. The solid financial health of the company confirms that it will maintain a , have enough working capital, and reduce its debt levels while seeking to capitalize the market (Mahdi, Abbas, Mazar, & George, 2015).
Global Level Strategies
Adidas would benefit largely from a differentiation strategy in which the company would diversify its products to provide the consumers with a range of the products from which they can make a choice. The company should also pay attention to emerging markets across the globe. Even with is formidable strength, the company has not optimized its potential in conquering some markets. For example, China, Japan, India, and Brazil are areas where Adidas can increase its marketing initiatives to increase its market share. Sporting event sponsorships provide one of the main ways through which Adidas can be able to increase its market share in this market through an enhancement of brand awareness (Deac & Stanescu, 2014).
The other global strategy that can help the organization improve is the creation of new ways of distribution. However, entering some markets like China and India is difficult if the company is making an entry alone. Creation of partnerships with various companies in these markets will be beneficial for the company. Consequently, outsourcing of its production initiatives from other countries is a venture that Adidas should consider. In some countries like China, production is cheaper because of the low cost of labor and power (Deac & Stanescu, 2014). This implies that the company will be able to increase its profitability in the process. Another strategy that the company can utilize is the development of products for new sports. Different sports are popular in different parts of the world. For example, soccer is popular in Europe and South America and Africa while Rugby is popular in the Pacific Islands and New Zealand. Some Asian nations such as India, Pakistan, Bangladesh and Sri Lanka value cricket more than Soccer and Rugby. Adidas should, therefore, develop products for new sports and market them based on the popularity of the sports across the globe (Deac & Stanescu, 2014).
In conclusion, Adidas has a lot of unutilized potential, which bring immense benefits if the situation is changed. One of the strategies that the company should implement is the diversification of the products to allow the users have a wide selection of the products. However, this diversification of the products should come hand in hand with the introduction of technology, as is the case with the other competing companies such as Nike. Consequently, Adidas also needs to pay attention to the emerging markets across the globe where it has a chance of developing. Partnerships with local companies in areas with entry barriers should be implemented, which will enable Adidas increase its market share considerably and become the leading sportswear producing company in the world.
Deac, V., & Stanescu, A. (2014). Strategic Segmentation-The Preamble Of Developing A Company Strategy. Revista de Management Comparat International, 15(4), 461.
Mahdi, H. A. A., Abbas, M., Mazar, T. I., & George, S. (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), 167-77.
Rudolph, M. (2016). A Financial Analysis of the Sportswear Company Adidas AG.