Adidas
Industry Analysis of Adidas using Porter’s Five Forces
ADIDAS , the world famous brand in Sports wear industry adopts some unique strategies to remain as one of the major player in the global market though there is stiff competition .Using Porter’s Five Forces, we are analysing the strategies adopted by ADIDAS in this Case Analysis.
Degree of Rivalry of ADIDAS
Adidas is competing in the market with many rival firms including the world leaders Nike, PUMA, FILA etc. The rivalry among existing competitors is pretty high in the sports and footwear industry as compared to other similar industries. ADIDAS has adopted several strategic measures for their market growth such as acquisition of an existing competitor, building partnership etc. ADIDAS has grown into a world leader through several acquisitions; namely Sports Inc., Salomon AG, Reebok etc. In 2005, the ADIDAS acquired world’s third sports brand, REEBOK and this was a remarkable event in the history of the company, as it paved the way for the expansion of its market share. The Company ADIDAS has also benefited from the strategy of on-line sales. Though stiff and strict competition exists, the company growth is based on its brand-equity and brand identity. As ADIDAS deals with products of low product differentiation, the degree of rivalry is so high. Since the switching costs are low, the rivalry among competitors is very high. When dealing with products of competitive nature, the firm have to be highly innovative and the technology used should be of very advanced and sophisticated. This brings the fixed cost high and in turn increases the degree of rivalry among the competitors. The diversity of rivals, that is; the rival firms like NIKE, PUMA are of different cultural, historical and philosophical backgrounds and so the rival moves are very difficult to predict.
Threat of Substitutes
The substitutes of Adidas products such as NIKE, PUMA etc. is also affects the market growth of Adidas. The price of its
ADIDAS , the world famous brand in Sports wear industry adopts some unique strategies to remain as one of the major player in the global market though there is stiff competition .Using Porter’s Five Forces, we are analysing the strategies adopted by ADIDAS in this Case Analysis.
Degree of Rivalry of ADIDAS
Adidas is competing in the market with many rival firms including the world leaders Nike, PUMA, FILA etc. The rivalry among existing competitors is pretty high in the sports and footwear industry as compared to other similar industries. ADIDAS has adopted several strategic measures for their market growth such as acquisition of an existing competitor, building partnership etc. ADIDAS has grown into a world leader through several acquisitions; namely Sports Inc., Salomon AG, Reebok etc. In 2005, the ADIDAS acquired world’s third sports brand, REEBOK and this was a remarkable event in the history of the company, as it paved the way for the expansion of its market share. The Company ADIDAS has also benefited from the strategy of on-line sales. Though stiff and strict competition exists, the company growth is based on its brand-equity and brand identity. As ADIDAS deals with products of low product differentiation, the degree of rivalry is so high. Since the switching costs are low, the rivalry among competitors is very high. When dealing with products of competitive nature, the firm have to be highly innovative and the technology used should be of very advanced and sophisticated. This brings the fixed cost high and in turn increases the degree of rivalry among the competitors. The diversity of rivals, that is; the rival firms like NIKE, PUMA are of different cultural, historical and philosophical backgrounds and so the rival moves are very difficult to predict.
Threat of Substitutes
The substitutes of Adidas products such as NIKE, PUMA etc. is also affects the market growth of Adidas. The price of its