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1 Informative Group Report

Informative Group Report Anjori Roy – 0788248 Medhavi Wadhwa – 0787319 Nitish Vakharkar – 0791778 Yeshaben Gor – 0789199 Ronak Prajapati - 0788533

St. Clair College Centre of Applied Arts & Technology

International Business Management – Logistics System IBM 150-003 Business Communication & Report Writing

Professor Robert Merritt

November 12, 2021

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Head of Contents Introduction

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History ………………………………………………………………………………………………………………………………………………………. 3 Primary Reach ……………………………………………………………………………………………………………………………………………………. 3 Business model …………………………………………………………………………………………………………………………………………… 4 Swot Analysis ………………………………………………………………………………………………………………………………………. 4-5 Business Strategies…………………………………………………………………………………………………………………………………. 6-7 References ………………………………………………………………………………………………………………………………………………………. 8

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IntroductionAdidas Inc. is a sportswear and athletic shoe retailer. The German company has grown into a huge global corporation thanks to its marketing approach, which is based on a positive brand image. The association with the distinctive logo and the advertising phrase "Impossible is Nothing" is in keeping with the brand image. The corporation invests heavily in advertising and brand promotion in order to preserve and sustain this image. Herzogenaurach in Bavaria, Germany is the headquarters of the organisation. It is the holding company for the Adidas Group, which includes the Reebok apparel company, the TaylorMade Adidas golf company, Rockport, and 9.1% of FC Bayern Munich. Apart from sports footwear, Adidas also sells a variety of other items such as bags, shirts, watches, eyewear, and other gaming and dress-related accessories. Adidas is the largest sportswear manufacturer in Europe and the world's second largest behind Nike. Today, the new Adidas Group employs over 45,000 people worldwide, with over 5,000 people working at the company's headquarters in Herzogenaurach, Germany. A team of designers, product developers, and biomechanics and material technology experts make up this group.

HistoryAfter a family feud within the Gebruder Dassler Schuh Fabrik organisation between him and his more experienced sibling Rudolf, Adolf Dassler founded Adidas in 1949. Rudolf had previously founded Puma, which quickly became Adidas' major rival. Both the Adidas and Puma companies are still headquartered in Herzogenaurach, Germany, until this day.

Primary business & reach Adidas expanded their product range quickly after focusing on athletic footwear in the beginning and has been producing sportswear gear and balls since the mid-1960s. Over time, the product line was expanded to include a broader range of sport categories (such as tennis, basketball, and snowboarding), as well as sports fashion products in the 1990s. The fashion industry has proven to be extremely profitable and vital to Adidas, to the point where the company now has two highly profitable sub - sectors: Sports Performance & Sports Fashion. The brand is based on a love for sporting excellence and cutting-edge design to help players perform at their best. As a result, it's no wonder that adidas has backed several legendary athletes to great success at the Olympic Games. Since 1984, adidas has cooperated with and supplied Team Britain in the United Kingdom. adidas' association with the Olympic Games traces back to the 1928 Games in Amsterdam, when the business launched its running shoes. Since then, adidas footwear and apparel have been seen on competitors at every Olympic Games. In fact, adidas items were worn by all British medalists in the last eight Olympic Games.

Adidas Business Model: Adidas' business model is centred on developing creative items that address consumer requirements. Rather than relying on product placements, the company tries to prove its worth by developing a high-performance product range tailored to the needs of athletes and customers. It also focuses on optimising infrastructure, procedures, and systems to enable speedier product creation and production. They also place a strong emphasis on reducing group-level complexity by streamlining the worldwide range of products, consolidating the warehouse base, and harmonising above-market-service. The desire to provide the finest branded shopping experiences to customers at all points of contact. To adapt swiftly to consumer needs, supply chain speed models have been developed. This strategy has enticed investors from all over the globe to purchase Adidas

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common shares, resulting in the company's long-term growth. Each company's public ownership structure has played an important role in sustaining long-term success.

SWOT Analysis Strengths Brand Value: Adidas is regarded as among the most lucrative sports brands. According to Forbes, it has a brand worth of $6.8 billion and is ranked third (Nike is first and ESPN is second). Adidas was recognised as the world's 61st most successful brand in 2019. An Iconic Brand with a Prestigious Legacy: Adidas has built a strong and renowned legacy and heritage by influencing and changing several sectors of society throughout the world throughout its long and storied history. For example, in the 1970s, the firm had an impact on athletics, and in the 1980s, it shaped hip-hop culture. The brand's unique three-striped tracksuit and three-leafed design logo made it a cult favourite, especially among urban youth around the world. New Products Innovation: Adidas has placed a premium on the quality of the products since its inception. R&D was worth EUR 153 million in 2018 (0.7 percent of yearly net sales) and EUR 152 million in 2019. One of the propelling causes behind its ever-expanding consumer base is high-quality, creative products. Diversified Portfolio: Even though the Adidas name is limited to the sportswear business, the company's products are diverse. It sells a variety of products, including footwear, clothing, and equipment accessories, that cater to a wide spectrum of sports. Young Customers prefer Adidas: Adidas has developed a global and devoted client base, notably among teenagers and young adults aged 16 to 24 in urban areas, thanks to a continual focus on product quality and service experience. Effective Supply Chain Management: Because Adidas outsources most of its manufacturing, supply chain management is vital to the company's success. Adidas, per its annual report, collaborates with critical policy partners to maintain complete control over the supply chain. Strong Financial Position: Protecting market share, long-term profitability, and sustainability are all dependent on financial capabilities. Adidas is one of the most financially secure firms in the world, and it takes advantage of its financial strength to ward off competition from worldwide brands like Nike and Puma. Adidas' currency-neutral revenue increased by 8% to EUR 21.9 billion in 2018, while net income improved by 20% to EUR 1.7 billion.

WeaknessesSupply Chain Shortage: Most Adidas' products are manufactured by third-party or independent manufacturing providers, primarily in China, Cambodia, and Vietnam. It has put Adidas at risk of being overly reliant on foreign suppliers. According to Reuters, these vendors are unable to meet rising demand for mid-priced garments in the North American market, resulting in a 1-2 percent decrease in sales growth in 2019. Premium price range: Due to the high price range resulting from revolutionary technology and production methods, the brand is only accessible to a few groups of buyers, particularly in developing countries.

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Outsourced manufacturing: Adidas has outsourced 93 percent of its production to third-party manufacturers (mostly in Asia) to take advantage of low labour costs and easy resource availability. They run the risk of becoming overly reliant on outsourcing, particularly in Asia. Furthermore, in terms of brand, the general quality of items perceived by developed economy consumers is a big concern. Limited product line: Adidas, along with the recently acquired Reebok brands, has only two names under its umbrella, while having extensive product lines inside these brands. As a result, there is greater room to expand the product portfolio. Other Facts: • Rigid price structure. • Our survey shows Adidas in market share, has not done well in Indian subcontinent market compared to Nike. •Supply chain, manufacturing, and fulfilment technologies now accessible aren't known for research that can be easily combined with online build-to-order systems or development that leads to novel designs. •The e-commerce is currently limited to the United States, but it is estimated to grow to Canada and other countries soon. •Customer support on the internet is neither "helpful" nor "simple to find."

OPPURTUNITIESChanging Lifestyle: Premium goods and services are in high demand due to saturation in established economies, changing taste and preferences, education, and changing lifestyles in developing nations. Market development: Because industrialised economies are already highly competitive, business expansion will be the only way to compete in the future. Expansion in product line: By pursuing this plan, it will be able to expand its product line and open new prospects while also differentiating itself from competitors. Increasing demand of premium products: If we just look at the Indian market, we can see that demand for premium products is increasing at a rate of 33%. This indicates the potential for future commerce and the growing market size of emerging economies. Backward integration: If Adidas follows this method, they will be able to protect their intellectual rights while simultaneously integrating its R&D and operational teams to work in an open system.

THREATS Competition: Although Adidas is a global brand, it faces stiff competition from other premium brands such as Nike, which is the No. 1 brand, and Adidas, which is in second place. Aside from that, local players, replacements, and market penetrators compete on a regular basis. Supplier Dominancy: Vendors have more negotiating power than the corporation because most of its production is outsourced. Government Regulations: Import laws, duties, and tariffs play a key part in the price and performance of the company, with 35 percent of items manufactured in China and 93 percent of production taking place in Asia.

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Supplier Dominancy: Because Adidas outsources most of its product manufacturing, suppliers have more negotiating power than the firm. Adidas is at risk of being held captive by its largest suppliers due to the lopsided power balance. Loss of Trademark: Adidas lost a trademark issue involving the three-strip emblem in the General Court of the European Union in 2019, putting the brand at risk of copying. US-China Trade Tensions: Adidas is a worldwide firm, which means it is vulnerable to the rash introduction of tariffs on a tit-for-tat basis between countries. Adidas is particularly vulnerable to a trade war because, even though the United States is its second-largest market, the great bulk of its products are manufactured in China and other Asian countries. Currency wars and tariffs, according to CEO Rorsted, are a huge threat to Adidas. Fake Products: As per CEO Rorsted, 10% of Adidas products in Asia may be counterfeit. The number and quality of counterfeit items for high-end shoe brands has risen dramatically in recent years, posing a challenge to shoe manufacturers.

Adidas Business strategies Adidas Product Strategy The following is an explanation of Adidas marketing strategy's product strategy and mix: Adidas is a well-known sportswear and goods company. Through its advancements, Adidas has always sought to give the finest of the best goods and equipment to sportsmen, including the first ice shoes and the first multistudded shoes. Adidas' product strategy in the marketing mix encompasses the company's full product portfolio, which spans a variety of sports and sorts. Adidas also sells sports backpacks and athletic clothing to individuals. In addition to its sport performance offering, Adidas was the first in the industry to develop a new lifestyle category in the 2000s, focused on streetwear influenced by sportswear. Adidas' product line includes tennis, golf, cricket, basketball, lacrosse, volleyball, rugby, gymnastics, skateboarding, baseball, field hockey, and kabaddi gear, running and lifestyle shoes, soccer shoes, and other sport utilities. Adidas also sells deodorants, fragrances, aftershave, and lotions, as well as watches, sunglasses, caps, and socks. TaylorMade- Adidas golf items, Rockport leather goods, and Reebok- CMM hockey products are all part of the TaylorMade- Adidas golf section. Adidas also has a social networking business called Runtastic, which develops fitness apps for both outdoor and indoor activities. Adidas is a sportswear and equipment company that caters to a wide range of sports

Adidas Price/Pricing Strategy: Adidas caters to a specific demographic of clients and strives to give the best products and experiences available.

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Due to the firm's inventions and continual product refinement, all Adidas items are premium priced, resulting in top-notch performance. Adidas' pricing strategy in its marketing mix has emphasized high-quality, low-cost products. The main reason for this is because the things are either adjusted to match the needs of the consumer or are not available at all. Even if this were not the case, Adidas products are already costly due to the excellent grade of materials used. As a result, clients in developing countries will pay a higher price for the goods. The amount of money spent on marketing, marketing, and sponsorship has an impact on pricing. Import restrictions, levies, and tariffs may have an impact on the product pricing because ninety percent of manufacturing is done in Asia due to the availability of cheap labour. Adidas, on the other side, has never scrimped on quality or standards, and its costs have always been reasonable.

Adidas Place & Distribution Strategy: Adidas sells its products all around the world through a variety of channels, including franchising, mass merchandise, specialty stores, and internet retailers (own and other e-commerce platforms). All of this demonstrates the company's global reach and distribution marketing mix strategy. Adidas used to divide its sales into three categories in the early 1990s: Adidas Originals (which marketed classic and traditional Adidas designs), Adidas Performance (which catered to athletes in various sports divisions), and Style Essentials (which catered to the public and their lifestyle). Adidas hopes to reach out to clients in every segment and region using these tactics. In comparison to other competitors, the company's affiliations with the ILO (International Labor Organization) and the IFC (International Finance Corporation) have given it the opportunity to execute and run a sustainable business. Adidas flagship stores can be found all over the world. Adidas is aggressively targeting the online market, not just with its own website, but also with other multibrand ecommerce platforms, as internet usage rises.

Adidas Promotion & Advertising Strategy: Adidas has always used the media to advertise and market itself. Adidas has a 360-branding strategy that encompasses all aspects of media and communication in its marketing mix promotional strategy. Adidas advertises on television, in print, online, and on billboards, among other places. One of its most iconic commercial ads had David Beckham, Muhammad Ali, and Laila Ali confronting their personal anxieties, which they eventually overcome. The brand actively communicates with its fans online, with over 35 million and 25 million followers on Facebook and Instagram, respectively. The Adidas tagline "impossible is nothing" was also released in conjunction with this. It was the most massive campaign in history. Adidas also sponsors top athletes in a variety of sports. Adidas is frequently seen in advertising for video games such as Sony's PlayStation. All of these strategies ensure that the iconic Adidas brand is remembered by everyone, that brand awareness is raised, and that targeted clients are easily kept and attracted. As a result, the Adidas marketing mix is summarised.

Digital Marketing and technology "Creating the New" is the name of Adidas' five-year strategy, which was released in 2015. Adidas, which describes itself as a digital firm, aspires to be the top sporting gear brand in the world. They employ subsequent digitization as a crucial aspect of their marketing strategy to accomplish this. Designing, manufacturing, and marketing the best sports items in the world is what it means to be the "Best." Digital advertising and social media account for 90% of the company's marketing budget. Relationship with consumers

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They try to engage with customers and provide premium, connected, and personalised experiences. In other words, they pique people's interest in sports on a personal level. The brand uses every touchpoint that consumers can contact, such as mobile, social, and retail, to create a consistent experience. Adidas tries to be everywhere its customers are by using insights from digital analysis and Big Data. Adidas promises multichannel, unified, and one-of-a-kind experiences. Open-source innovations and collaborations Adidas invites all creatives, including athletes, customers, and partners, to learn, create, share, and shape the future of sports and sports culture. They strive to bring innovative items to market. Part of that project is a collaboration with Parley for the Ocean, which includes the production of three new Ultra Boost models using plastic debris from the sea. Targeting Strategic cities Adidas places strategic significance on six locations (London, Los Angeles, New York, Paris, Shanghai, and Tokyo) that affect customer perceptions, trends, and purchasing decisions. They primarily offer soccer merchandise in Europe, but the United States is an important market for other subsidiaries such as basketball and baseball. North America is the largest market in the athletic goods business, accounting for 40% of all sales.

Summary of the ResearchAdidas may have encountered some difficulties, but according to the research, they remain a powerful brand with the ability to outperform its competition in the future. Adidas must continue to improve its speed in directing the brand as a global leader to secure long-term success. Companies that allow customers to participate in decision process have a better chance of succeeding. Consumers will be influenced by the implementation of a worldwide network through technology, leadership, invention, and innovation.

References adidas Group - History (archive.org)

https://www.adidas-group.com/en/about/history/ https://www.adidas-group.com/en/about/strategy-overview/ https://thestrategystory.com/2021/09/13/adidas-business-model/ https://www.cnbc.com/2020/04/27/adidas-q1-2020-earnings.html https://www.marketing91.com/marketing-strategy-of-adidas/ https://www.mbaskool.com/marketing-mix/products/17006-adidas.html https://digitalagencynetwork.com/digital-marketing-strategy-of-adidas/ Pratap, Abhijeet. “Marketing and Branding Strategies of Adidas.” Notesmatic, 24 Aug. 2019, notesmatic.com/marketingbranding-strategies-adidas/. Currency War Is Bigger Threat Than Tariffs, Adidas Boss Says - Bloomberg Find Your Competitive Edge with Porter’s Five Forces! - Business Strategy Hub (bstrategyhub.com) Currency War Is Bigger Threat Than Tariffs, Adidas Boss Says - Bloomberg

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https://www.forbes.com/companies/adidas/?sh=5800e8b55e27 Run-D.M.C.'s 'My Adidas' and the Birth of Hip Hop Sneaker Culture | Video | BoF (businessoffashion.com)