Adidas - A study on its Global reach and Operations
"What one considered as a ?want' today is a ?need'. One of the best examples for this is footwear. Footwear is a huge industry today with the athletic shoe segment being the most popular and highly competitive witnessing an extensive advertisement campaigns, brand promotions and awareness, endorsements by celebrities etc. The top brands in the segment Nike, Adidas, Reebok, and Puma are striving to capture new found markets, retain their market share in the major markets of US and Europe. A key factor in these companies competing in a neck-to-neck situation is because of the popularity of sports like Football, Basketball, Tennis etc., in the North America, South America and European countries.
Adidas Group is the world's second largest producer of sporting apparel. The group commands nearly 29% (2010) of the world's sporting apparel and athletic footwear market. Adidas group is currently second to Nike which is the market leader with more than 33% share, but the group having a rich legacy and its focus on innovation is marching ahead of its competition.The history of formation of Adidas goes back to 1920 when its founder Adolf (Adi) Dassler made his first shoes with the scarce materials in Germany that were available after the First World War.
It was made with intent of providing an athlete, the best possible equipment and he had three guiding principles:
- Produce the best shoe for the requirements of the sport and protect the athlete from injury
- A product that is durable
- Ability to withstand the extreme conditions of sport
Adidas Group acquired the Salomon Group (Salomon, TaylorMade, Mavic and Bonfire) in 1997 and Reebok in 2005. Today the group has five focus areas of producing footwear; football, basketball, running, training and outdoor. The company employs over 31,000 people around the world with its headquarters in Herzogenaurach, Germany. The Adidas Group's Global Operations function manages the development, production planning, sourcing and distribution of the majority of our products. The Route 2015 is a strategic business plan the company has made and the company expects to deliver 90% of their targeted growth.
But for this, the next four years it has to focus on five strategic priorities supported by 15 initiatives for the Group:
-Ensuring cost competitiveness
-Providing industry-leading availability
-Enabling later ordering
-Supporting the Group's growth projects
-Modernizing the Group's infrastructure
The strategy of the group's acquisition of Reebok is paying off in the race for the number one spot with Nike, especially in an attempt for an image makeover to becoming a general footwear and apparel manufacturer. the group has effectively used various medium including sponsoring of major sporting events, social media like facebook brand campaigns, ecommerce and roping in top stars of various sport to promote its brands; Adidas, Reebok, TaylorMade .
Below are a few key initiatives that the group plans:
-Develop the ?a(?micro-A'), an Adidas line of Smart Shoes integrating microprocessors
-Working towards rebranding the Reebok image as a lifestyle shoe company
-Target young people, women and others who are into fashionable shoes
-Target women with ActiveR-a Reebok product line specially designed for women with ?active lifestyles'
-Market Reebok more in emerging markets such as China and India as Reebok is already an established brand in India which accounts for a large population of youth
With a mission of attaining a greater market share and take the lead as the world's leading footwear (General and Athletic), it remains to be seen if Adidas successfully manages to execute all its strategies & plans, and becoming a leader in the emerging markets and at the same time retaining its position in the existing markets of US and Europe, thereby sprinting ahead of Nike?