Adidas vs Nike Case Study

Creating a powerful website wherein all products and services offered of the company are available and also a websites which interactive too. 5. Using woman athletes in their advertising tactics: commercials or models. SWOT Analysis Strengths †¢ In many invents  is the biggest sponsor †¢ Strong management team †¢ Brand recognition and reputation †¢ Diversity and variety in products offered on the web (footwear, apparel, sporting equipment, etc. ) †¢ Strong control over its own distribution channel †¢ No bad reputation like child labor or environment pollution †¢ In the Soccer industry, Adidas has a stronghold Weaknesses †¢ High prices in some products †¢ E-commerce is limited to USA †¢ Online customer service not helpful or NOT easy to find. Opportunities †¢ Increase female participation in athletics †¢ Collaborate with other online retailers to offer Adidas products †¢ Possibility of outsourcing the web development and e-commerce to a third party developer   Threats †¢ Nikes strong reputation in the footwear and apparel industry too †¢ Negative image created by the sponsored athletes (i. e. Kobe Bryant and his sexual assault case) †¢ Increase in the Price of Raw materials Continuing challenges in import/export duties Competitors Analysis Strengths: †¢ Nike uses a â€Å"Make to Stock† customer order which provides a fast service to customers from available stock. †¢ Nike operates Nike Town shoe and sportswear stores, Nike factory outlets and Nike Women shops. Nike sells its products throughout US and in more than 180 countries. †¢ Nike is strong at research and development, as is evidenced by its evolving and innovative product range. They then manufacture wherever they can produce high quality product at the lowest possible price. †¢ Nike Company is great at expanding their product. Competitors are developing alternative brands to take away Nike’s market share. Objectives of the Analysis 1. To help management understand their competitive advantages/disadvantages relative to competitors. 2. To generate understanding of competitors’ past, present (and most importantly) future strategies 3. To provide an informed basis to develop strategies to achieve competitive advantage in the future. 4. To help forecast the returns that may be made from future investments (e. g. how will competitors respond to a new product or pricing strategy? Strategies . Market Segmentation Most of the consumers of Nike’s products are mainly sportsmen. This is so because of the utility that comes with the products. An athlete is more likely to go a sports shoe designed and marketed by Nike more than a person who detests sporting and exercises. Nike targets these consumers by agreements between Nike and athletic teams, college’s athletic teams, etc. for product spo nsorship and eventual promotion to the members of these teams. In this way, Nike is able to reach a wide number of consumers and consumers who are more likely to buy. Even though others are likely to buy the products, Nike pays specific emphatic targeting to the athlete more than any group of individuals even though it also targets the youth who have embraced the hip hop culture 2. Targeting strategies Nike lays a number of strategies to target their immediate consumers; athletes and other sportsmen. The targeting strategies include among others the sponsorship of products by professional athletic teams, celebrity athletes and college athletic teams. This strategy is specifically successful because of its ability to reach a large number of athletes. If the athletic team manager prescribes a specific type of track shoes made by Nike, the trainees have no option other than to buy them. The teams can as well buy the track shoes in bulky and supply them to the team members. The second strategy that Nike applies is the designing of product destination. It does this by associating success with the product. For example, when a celebrity athlete sponsors a specific brand of athletic shoes, the brand will be associated with success. This psychological effect is reinforced with advertisements that affirm this position. Finally, Nike targets the consumers who are likely to develop product intimacy; those who care more about the utility and quality of the product than the price. In this way, the pricing is not affected too much in a bid to accommodate a large number of consumers. 3. Pricing Strategies Nike targets the consumers who embrace product intimacy and thus care less about the product. This has enables Nike to set relatively higher prices than its competitors. This is a strategy that calls for higher pricing points so as to push the perceived product value. It has been established that consumers who consider a product to be of high quality are likely to pay the high price more often and consistently. Once consumers develop product intimacy, they come to associate their person with the product and will pay whatever price quoted on the product provided it has the Nike logo on it. Another very important thing to note is the fact that Nike uses the vertical integration pricing strategy in which they take ownership of the participants at channel levels that differ and they also engage in multifarious channel level operations both in a bid to control costs and thus influence pricing function. . Distribution Strategies Distribution strategies embraced by an organization can either give them an edge in market or make them lag behind the winners in the market. The more efficient the product distribution is the more sales and thus more profits. The delivery of the right product and at the right time to the consumer not only effects utility but al so leads to high degree of consumer satisfaction and loyalty. Nike distributes its products on level basis. The high priced premium products are given to certain distributors while leaving the low priced to be sold at highly discounted prices at mega retail stores such as Wal-Mart. Whereas Reebok embraced a limited distribution strategy Nike ventured more into a global market capitalization. 5. Promotional and Communication Strategies Apart from Nike selling quality products which have lead to a high degree of customer loyalty, the promotional strategies that the company employs are simply superb. Nike has contracted a number of professional and celebrity athlete which have managed to draw a considerable attention to their products. Some of the sportsmen signed by Nike include soccer stars such as Ronaldinho, Ronaldo and Roberto Carlos, Basketballers such as Jermaine ONeal and Lebron James2, tri-athlete Lance Armstrong and golf superstar Tiger Woods. This has created a relatively high degree of Nike products’ awareness. Besides the signing of celebrity sportsmen to promote their products, Nike has also employed a great deal of advertisements through the mass media. Nike employs a selective- demand advertisement focused on the high priced shoes used for traditional sports. Research and Development Plan Adidas policy is to control and monitor hazardous substance to protect human health and environment, one of those is to eliminate PVC making progress in finding substitutes like polyurethane, ethyl vinyl, silicones thermoplastic rubber. Adidas also  provide training sessions on employment standards and HR systems, health  and safety is important for the company. Establishing teams to manage and monitor SARS in Asia factory, washing stations, disinfectant  units. Adidas join into technology by make up the world’s first smart shoe, adding a microchip inside the shoe and wireless mp3 player. Also using hot melt system of the  production that is environmentally safe, using heat-activated adhesives. The  packaging that company use, are suitable for transportation over long distances humid conditions and extreme temperature changes and use recycled paper and other  environmentally-friendly packaging materials. Human Resource Plan The welfare of the employees is significant for Adidas family. Adidas identified that in order to achieving the goal to be the global leader in the sporting goods industry depends on the talents, enthusiasm and dedication of the employees. In order to success their satisfaction Adidas uses various methods. Some of these are: †¢ provide medical insurance for staff located in different cities †¢ improve the housing accumulation fund and social retirement fund coverage †¢ introduce flexible working hours †¢ provide annual performance bonus for eligible employees †¢ Make internal agreements on the use of internet, (mobile) phone and E-mail, on reintegration of employees coming back from parental leave, and on on-call service †¢ Support the existence of formal work council Adidas as a large international company occupies thousand of employees of different ethics, cultures, and race. Due to the existence of the HR department the potential  problems are eliminated. As Adidas has to cover many different job positions, the skills that are demanded are various. HR department recruits both low and high skilled employees depending on each job description. Diversity exists in all matters  because there are employees of different age, gender, race, nationality and religion. Alternative Plan and Recommendation In human resource we recommend a continuous training to their employees which are very important. Have a continuous organized and numerous seminars in all levels of employment. As it is mentioned  before, Adidas believes that employees and their talents are critical to the continuing commercial success. For this reason, we recommend Adidas to create a Global Salary Management System which responsibility is to motivate employees through different ways of remuneration and through offering various attractive  compensation systems that could be implemented globally. ADIDAS GROUP OF COMPANY 2012 BRYAN MAWAC RHIZA NEMES 10/11/2012 949 The foundation 18 August adidas is registered as a company, named after its founder: Adi from Adolf and Das from Dassler. 50s The Miracle of Bern 1954 The Miracle of Bern Germany battle Hungary with a competitive advantage. They are wearing adidas soccer boots which for the first time feature removable studs. 60s Higher Driven by a desire to help all athletes committed to performance, adidas manufactures equipment for what some consider fringe s ports. Unconventional high jumper Dick Fosbury launches himself up and over in adidas footwear. 0s The adidas team wins Crowning moment: Franz Beckenbauer, the Kaiser, raising the World Cup in victory salute. Germany had just beaten Holland 2-1 in the 1974 final. 80s The transition After Adi Dasslers death, Adis wife Kathe, his son Horst, and his daughters carry on the business. 90s With a new management Under the CEO Robert Louis-Dreyfus, adidas is moving from being a manufacturing and sales based company to a marketing company. 1995 adidas goes public Flotation of the company on the Frankfurt and Paris Stock Exchange. 1996 A splendid year The three-stripes company equips 6,000 Olympic athletes from 33 countries. adidas athletes win 220 medals, including 70 gold. Apparel sales increase 50%. 1997 adidas-Salomon AG adidas AG acquires the Salomon Group with the brands Salomon, TaylorMade, Mavic and Bonfire in December 1997. The new company is named adidas-Salomon AG. 1999 The new brands The integration of the new brands is gaining momentum. The new TaylorMade FireSole clubs boost sales. Salomon in-line skates take off with high double-digit growth during the first half of 1999. 2000 – New management Following personnel changes, the new management initiates an ambitious Growth and Efficiency Program. Major sports events such as the European Soccer Championship EURO 2000â„ ¢ and the Olympic Summer Games, where swimmer Ian Thorpe takes three gold medals, contribute to the company’s success. 2005 Sale of Salomon The Salomon Group (including Salomon, Mavic, Bonfire, Cliche and Arc’Teryx) is being sold to Amer Sports in October 2005. The new adidas Group is focusing even more on its core strength in the athletic footwear and apparel market as well as the growing golf category. The legal name of the company will change to â€Å"adidas AG† in May/June 2006. 2006 adidas-Salomon AG acquires Reebok The closing of the Reebok transaction on January 31, 2006 marks a new chapter in the history of the adidas Group. By combining two of the most respected and well-known brands in the worldwide sporting goods industry, the new Group will benefit from a more competitive worldwide platform, well-defined and complementary brand identities, a wider range of products, and a stronger presence across teams, athletes, events and leagues. [pic] [pic] [pic] [pic]