Adidas Growth Strategies

IV. Introduction This analysis is slightly the troupe adidas that belongs to the adidas Group. The adidas Group switchs proceedss below the brands adidas, Reebok and TaylorMade-adidas Golf. Adidas is on the commercialize over 80 years and shargons products for solely(prenominal) kind of sports. The adidas group was founded in the year 1949 by Adolf Dassler. A company that started with removeing soccer shoes contains today a wide product assortment with footwear, get dressed and accessories. The brand is further sh bed into three subbrands called adidas deed, original and sport hyphen.TaylorMade-adidas besides offers wide range of play equipment and matching golf dress out and accessories. On their rest homepage the adidas Group claims to be a world(a) leader in the sporting goods indus rise (adidas group, what we do). The company crapper be depict as a spherical player because they require 170 subsidiaries in contrary countries that are directed from their head quarter in Germany which is the home of the adidas brand. Headquarters of Reebok and TaylorMade-adidas Golf are in the US in mamma and California.Besides the international subsidiaries of the company, products of the group are useable in every region through their on line of descent store. Their st localizegy to success is continuously strengthen our brands and products to ameliorate our competitive position and financial performance. The following paper is outlet to analyze external and internal situation of adidas. Further, their merchandiseing and addition strategies testament be analysed. Major instruction of this paper leave be on the customer analysis. Growth StrategiesThe evaluation of the performance of a company is very much measured trough growth in sales. Growth strategies determine how companies requisite to increase their grocery store share or sales. They are crucial for the success of a company and should be selected carefully. There are different strate gic options that companies reserve. Many companies pursue different types of growth strategies. Main decisions of a company are if they want to stay in quick markets or move into into brand- red-hot markets and further if they have existing products or if they offend upstart products.A combination of those four elements leads to the different types of growth strategies insight strategies, product-market expansion strategies, vertical integrating strategies, differentiation, and diversification. Penetration Strategies (existing products/existing markets) Penetration Strategies means that companies sell their existing products on already existing markets. Companies choosing this outline have to make up competitive advantage through pricing, trade, etc. They want to infer market share and convince the customers of their competitors to buy at their stores. Adidas is definitely using penetration strategies.For over 80 years adidas is selling sports apparel and accessories. w ith a sure-fire established brand image adidas still sells their sports apparel all over the world. Their marketing efforts as described in the part forwarding strategies help them to re important competitive. Product expansion strategies/Product Development ( sunrise(prenominal) products / existing markets) You suffer speak of product expansion or product increment strategies if a company develops new products and try to sell them to existing markets. Adidas do also use of product expansion strategies through introducing adidas performance, originals and style in October 2000.The company expanded their products through a new style line that focuses more on fashion than on sports clothes. You hobo speak of product expansion because although the style is different it is still in the apparel sector. Further, adidas modifies their products continuously. In February 2010 they just introduced their new developed womens Body mathematical function Technology that defines female-spec ific inflame and sweat z unmatchables in regularise to place fabrics directly where they are take the most, delivering optimised function to provide maximum comfort during workout. (Adidas, Press Room) The new applied science give be used in adidas new CLIMA365 solicitation that will be introduced in Spring/Summer 2010. other expanding of their products is heart rate sensing apparel so that consumers presumet need a pacer while running. Through developing new technologies to improve their sports apparel consumers quality that adidas is always up to date with new sports innovations. On their website adidas also throwd an declare section called mi. Customers have the supposition to personalize products. For suit you john personalize shoes.Besides color and design, it is possible for customers two order the left and right shoe in different sizes and width. Customers have the possibility to identify with the adidas products through creating their own personal adidas clothe s. mart expansion strategies/Market Development (existing products/ new markets) In this outline companies try to sell their products to new markets. Cooperation of adidas with Stella McCartney and Porsche Design Sports can be seen as a market expansion. The agreement for evaluating it as market expansion is that the new tail end market of these products is fashion.They bell ringer consumers that are interested in high fashion, who do not have to be interested in the sports sector. Fashion and lifestyle is in the focus of these apparel lines. Vertical integration strategies (existing market/ different stage of production) A vertical integration strategy describes The degree to which a firm owns its upstream suppliers and its downstream buyers (Blackwell root Online, Vertical Integration Strategy). In a time value chain we have the manufacturer, exclusivelysaler and retailer. If a retailer also owns a factory and manufactures its products it would be a backward integration.The purpose of vertical integration is to increase the control of the stages of breeding. In the early beginnings adidas produced all their shoes and apparel on their own. Through the huge expansion in the last decades adidas dont produce all their apparel on their own. Today they own 9 own factories where they produce some of their products. Further, they have around 615 master(prenominal) suppliers from all over the world. Production is in Europe (27%), Asia (51%) and America (22%). (EVB, Adidas) preeminence (uniqueness)The differentiation is a strategy with the main focus of developing a product, wait on or image that is unique and with attributes that are highly appreciated and valued by customers. Customers will value them high as products or services of competitors. Through creating a unique image companies that make flourishing use of this strategy can often sell their products for a higher price. So it is easier for companies to present their products as unique because th ey get more coin to cover their costs. Factors that describe companies that make use of differentiation are bother to leading scientific research. Highly skilled and creative product development team. Strong sales team with the ability to successfully communicate the perceived strengths of the product. Corporate reputation for quality and innovation. (QuickMBA, Porters Generic Strategies) A risk that companies have to face when using this strategy is that competitors will try to imitate the company or change consumers mind/ taste. The brand adidas as mentioned before exists over 80 years. They had a long time to create their unique brand image. Adidas stands for quality and expertise in everything that is related to sports.Through supporting and sponsoring different kind of sports events such as the UEFA Champion group discussion in 2008 adidas consumers view of adidas is always connected with sports. Further, in their adidas performance collection they make use of innovation s uch as the mentioned Body Mapping Technology. Showing the consumers that they are using new technologies and constantly improving their products differentiates adidas from their competitors. Customers feel that adidas uses all their possibilities to offer products that will help them doing a good performance in their sports. Diversification (new products/ new markets)Diversification is also a growth strategy. The purpose of diversification is to allow the company to enter lines of business that are different from current operations. (Thomas, Joe, Diversification Strategy) This means that companies try to sell new products to new markets. This strategy is risky because the company is moving in unknown markets where they do not have experience. (Tutor2u, Ansoffs product/ market matrix) Further, we can distinguish between concentric, horizontal and conglomerate diversification. The first form, concentric diversification, is when a company adds related products or markets.Horizontal d iversification is when a company sells products that are unrelated to their existing but would appeal to their customers. The terce option is conglomerate diversification. It occurs when a company goes into a totally different market with new products. There is no relation between the already existing products. This would be for example if a supermarket also sells travels. A successful company such as adidas also wants to enlarge their markets and is searching for new ways to expand their business. Recently, in January 2010 adidas introduced the miCoach interactive instruct system guide.The computer programme miCoach is available over the adidas website. Customers can choose between different training plans such as de-stress or learn how to run. It can be described as horizontal diversification because they now offer a service personal training. The micoach pacers that they sell can be seen as concentric diversification because pacers that measure your heart rate are related to s ports and sports apparel. Another form of concentric diversification can be seen in their deodourant and shower gel that they are selling at drugstores and supermarkets.It is related to their main market because people who do sports need a good deodorant and have to take a shower afterwards. After analyzing adidas growth strategies you can say that adidas knows what they are doing. They focus on different growth strategies to gain market share and increase sales. Most of the time they focus on product extension to improve their product assortment. I think that because of a well-established brand name adidas should try more to make use of diversification. They can also sell other products or services because people give this brand. A lot of people all around the world are fascinated by sports.Like the company jumba juice they could for example sell healthy drinks and juice to support a healty sport-oriented life style. Global strategy A company that has a world(a) strategy views th e world as one market and tries to standardize their marketing activities. Nevertheless, product adaptations are make where they are necessary. As mentioned before adidas is a global company. Their products are available in nearly every country on earth and their target markets are sports oriented customers all over the world. They sell their products successfully under the name adidas in every country.A comparison of the different country websites shows their standardization for different countries. If you enter www. adidas. com or www. adidas. de or www. adidas. fr it will exactly change the language and some actual topics but the whole design and offer is the same. Adaptations are only made where they are necessary. On the US homepage for example you can find Lacrosse under adidas Performance whereas on the German homepage it cannot be found because the game is not played in Germany. Adidas knows their markets and takes care of cultural or country specific differences.The compan y also says hat they know that they have to adapt to certain cultural differences. Further, they blob the consumer buying behaviour and the unique retail landscape when operating in different markets. In 2009 the company reorganised their brand structure. They moved from a vertically integrated brand structure to a functional multi-brand structure. straight adidas has a Global Sales and Global Brands function. The Global Sales intimacy is responsible for the commercial activities where as the Global Brands function takes care of the marketing activities of the brands adidas sport performance, adidas sport style and also Reebok.For their 2,200 retail stores they set global guidelines so that they can increase efficiency and to create consistent conditions to get a line longterm profitability. These two new created functions show that adidas is focused on a global strategy. Together with the new structure of the organisation the adidas Group also stubborn on new measures. First, they want to establish joint operating models for adidas in most of their global markets. Second, they want to eliminate regional headquarters so that they have a more direct interaction between the global functions and the foreign markets.And third, they decided that they separated the responsibility for the Global Brands and Global sales. promptly the CEO of the adidas Group Herbert Hainer is responsible for Global Sales and Erich Stamminger, a division of the executive board takes care of Global Brands. Main objective of these new divisions is to ensure that all chances on their operating markets and categories are taken through a development of well-structured and coordinated Go-to-Market strategies. They have to develop innovative products and discourse strategies that can persuade consumers in the different markets. All in all, you can say that Adidas is a global player.They are selling their products around the world. It is easier for them to develop a global strategy beca use they see the world as one huge sports market. They target the customers that like to do sports and like the sports style for clothing. Nevertheless, they know the different type of sports consumers prefer in different countries. The only aspect that could be improved by adidas is to focus more on country specific sports. In the US for example football is really popular. They could create a special football line to satisfy the involve of the customers. Sources Adidas Group, What we do, http//www. adidas-group. om/en/ourgroup/our_business/default. aspx, accessed on 17 April 2010. Adidas, Press Room, http//www. press. adidas. com/desktopdefault. aspx/tabid-11/16_read-10905/, accessed on 24 April 2010. Adidas, The adidas bilgewater year by year, http//www. press. adidas. com/Desktopdefault. aspx/tabid-28/41_read-1209/, accessed on 24 April 2010. Ansoff Matrix, What is the Ansoff Matrix, http//www. ansoffmatrix. com/, accessed on 20 April 2010. Blackwell Reference Online, Vertical Integration Strategy, http//www. blackwellreference. com/public/tocnode? id=g9780631233176_chunk_g978140511828629_ss7-1, accessed on 20 April 2010.Cateora, P. R. and Graham, J. L. , International Marketing, thirteenth edition, 2007, New York. EVB, Adidas, http//www. evb. ch/p25010738. html, accessed on 25 April 2010. http//www. gaebler. com/Growth-Strategies. htm QuickMBA, Porters Generic Strategies, http//www. quickmba. com/strategy/generic. shtml, accessed on 20 April 2010. Thomas, Joe, Diversification Strategy, http//www. enotes. com/management-encyclopedia/diversification-strategy, accessed on 21April 2010. Tutor2u, Ansoffs product/market matrix, http//tutor2u. net/business/strategy/ansoff_matrix. htm, accessed on 20 April 2010. www. adidas. com www. adidas. de