The Adidas Corporation aims to become a world leader in manufacturing sports-related products by developing brands that exhibit the passion and lifestyle of athletes. The enterprise is committed to strengthening its image and competitive position. Their mission is categorized into four fundamental postulates: dedication, globalization, innovation, and consumer focus. This essay entails an overview of the Adidas Group.
Strategic Marketing Position
Adidas hopes to obtain a larger market share in the sporting industry. To do so, the firm has to enhance its position by having specific target markets instead of taking on the entire market. Adidas must narrow its focus to the various consumer segments and differentiate its goods. They should sign up famous athletes who can improve the company’s image.
Competitive Advantage Analysis
The Adidas Company has three significant competitive advantages that assist in maintaining its production and relevance in the industry. They include effective targets in the leisurewear domain, affordable raw materials, and sponsorships. The sponsorships allow the firm to carry out brand awareness in various forums. The raw materials over the last decades have had consistent and affordable prices that make it cheaper to manufacture the end products. The low prices enable Adidas to acquire high-profit margins that they invest back into the business to promote the brand. Amongst all its competitors, Adidas has obtained more breakthroughs in reaching out to the leisurewear market.
The Competitive Market
Different ways are utilized to assess the competitive surrounding. They include the market life cycle, the bargaining power of buyers, rivalry threat, potential entrants, stakeholders, substitutes, and the bargaining power of suppliers. Adidas can be categorized as part of three industries: sporting and athletic goods production, luxury and apparel items, and footwear. Each of the sectors is in a different phase of development and growth. They require unique strategies to acquire a sustainable competitive advantage. For instance, the footwear segment has attained its maturity stage; hence, it is expected to grow faster as the average wages rise. The luxury and apparel industry is also in its mature phase while the sporting goods sector is currently facing a decline period due to high competition. Adidas needs to understand the three market segments to adjusts its operations accordingly and focus on the beneficial areas. The stakeholders include the persons that affect the activities of the enterprise. They comprise of legal operators, business associates, and employees. Each of them requires the firm to uphold their interests to maintain stable relationships. Substitutes entail the goods that can be used on behalf of Adidas’ products. Such items include dresses, formal clothing, sandals, etc. The substitutes for Adidas products are difficult to find; hence, the company faces little or no substitute threats. The same challenge limits potential entrants who find the shoe industry hard to enter. Three primary drivers influence the bargaining authority of suppliers; cost efficiencies, differentiation of raw materials, and the number of suppliers. Based on the affordability of the raw materials, it is evident that the bargaining power of suppliers is low. However, there is a high level of competition that also raises the bargaining power of consumers.
The external elements in the surrounding of Adidas also affect its growth and competitive advantage. For example, the demographics of the areas the firm is located can have a large impact on the age, gender, culture, and the number of customers. Environmental factors include natural resources, technology trends, regulatory issues, social trends, economic elements, and the industries.
The biggest threats and opportunities present in the footwear industry are brought about by the economic, demographic, and cultural factors. The consumers are controlled by the amount of disposable income they possess that is steadily rising as the living standards continue to improve. Also, the biggest social trend taking over the globe is the importance of living healthy. People purchase the appropriate athletic wear for going to the gym or partaking in exercise regimes. The healthy lifestyle has penetrated to all age groups and populations promoting the sales of sports firms such as Adidas.