Competitive Advantage
Adidas's strong ____________ and reputation for quality and innovation have been carefully cultivated over decades, allowing it to command premium pricing and foster unwavering customer loyalty.
What is brand equity/recognition?
By offering products across a wide price range, catering to both average consumers and high-end customers, and fostering brand loyalty, Adidas decreases this to influence price and quantity sold
What is the buyer's power?
Beyond footwear, Adidas offers a range of athletic products that complement their core business. This type of diversification allows us to leverage our brand recognition and expertise. What strategy strengthens our position in the sportswear market?
What is related diversification?
This valuable resource allows Adidas to implement technologies like Boost in running shoes and Primeknit in apparel. It also allows Adidas to charge premium prices, providing higher profit margins for investors.
What is product innovation capability?
Adidas offers these to those who own shares in the company, showcasing its capability to maintain financial stability and good debt control.
What are dividends?
Adidas' strategy of forming alliances with influential athletes, celebrities, and organizations, which help to boost its marketing efforts and product appeal
What are strategic partnerships and endorsements?
Adidas reduces this impact by relying on multiple suppliers across different regions and focusing on high-quality, specialized materials. This strategy ensures a stable supply chain without any single supplier having too much influence.
What is supplier bargaining power?
While unlikely for Adidas, this strategy involves entering an entirely new industry to add new products to their product lines that serve purposes their other products might not fulfill. For example: Adidas now offer a service personal training which is unrelated to their core business of manufacturing and marketing sportswear.
What is horizontal Diversification?
Exclusive deals with icons like Lionel Messi in soccer, Pharrell Williams in music, and Stella McCartney in fashion are not easily accessible to competitors. This is a result of this rare resource.
What are strategic partnerships?
This factor, requiring significant investment for manufacturing, distribution, and marketing, makes it challenging for new entrants to compete with Adidas.
What is substantial capital requirement (high entry barrier)?
Adidas' well-established research and development infrastructure that enables it to stay ahead of the curve in introducing products that meet evolving consumer needs.
What is product innovation and strategic positioning?
Adidas faces high competitive rivalry from well-established brands like Nike, Puma, and Under Armour. To maintain its position, it continuously innovates in product design and technology, and leverages its global reach through strategic marketing.
What is competitive rivalry?
Sharing resources and streamlining processes across our brands efficiency. This approach unlocks hidden value within the company.
What is operating synergy?
Built for over 50 years since its founding in 1949, this inimitable resource has provided a stable foundation for long-term growth and resilience against market fluctuations
What is brand heritage/history?
By quickly adapting to different situations like the Covid-19 pandemic, Adidas has shown its dedication to protecting these.
What are shareholders' interests?
Adidas has invested heavily in streamlining its supply chain processes, enabling it to respond quickly to changes in consumer demand and market trends.
What is supply chain management?
Adidas mitigates this force by leveraging its strong reputation, advanced technologies like Boost, and established customer loyalty. Consumers who prioritize quality and brand prestige are less likely to choose lower-tier alternatives.
What is the threat of substitution?
Partnering with creative minds and utilizing combined resources fuels our growth. This approach combines external innovation with financial muscle
What is open innovation / financial synergy?
With over 200 suppliers worldwide, from CIFRA SPA in Italy to TRC Ltd in the UK, Adidas orchestrates a complex network with precision. This organized resource enables Adidas to adapt faster than rivals to market changes or disruptions
What is supply chain management?
In 2022, despite global economic challenges, Adidas paid out this much in dividends to its shareholders.
What is €585 million?
Adidas's operations span multiple countries, allowing it to mitigate risks associated with __________________ or changes in consumer preferences in specific markets.
What are regional economic fluctuations?
High capital needs for manufacturing, distribution, and marketing make this force moderately low. Additionally, Adidas uses its scale to set industry standards and influence supplier conditions, further raising barriers to entry.
What is the threat of new entrants?
Adidas spreads their risk and tap into new markets by dominating this kind of diversification. What is their global presence strategy that keeps revenue streams flowing?
What is geographic diversification?
While Porter's Five Forces suggests the sportswear industry might be unattractive, the Resource-Based View (RBV) using the VRIO framework indicates that the industry is _________________ for Adidas
What is “Highly Attractive”?
Despite market volatility, particularly during events like the Covid-19 pandemic, Adidas's stock (ADDYY) has grown by an impressive _____% since 2012, significantly outpacing the S&P 500's growth of about 153% over the same period.
What is 325%?