Adidas Diversification
Marketing
02/20/2013
Adidas Diversification All throughout Adidas history, the company’s objective has been to grow and expand. Adidas is the Group’s core brand and is a leader in the sporting goods market. Adidas Group is conformed of: Ashworth, Rockport, Reebok Sportswear Company and Salomon group (Adidas Strategy). These mergers helped the company expand its product line by penetrating into already existing markets, as well as give Adidas a competitive edge to compete worldwide and to become the second largest athletic shoemaker in the world. Adidas Group has outsourced to multiple continents around the world. In the beginning, Adidas produced it’s apparel and shoes on its own, yet, since it’s huge expansion over the last decade, Adidas was unable to produce all of its products for which they turned to outsourcing its production and manufacturing. Because of the benefits of outsourcing, such as the lower cost for raw materials, most of the products of the company like sports shoes, apparel, accessories, and equipment are manufactured in Asian countries. However, despite its huge reliance on Asia, Germany is still in charge of all the design and development process of all its products (Adidas Diversification).
Furthermore, Adidas has used diversification as one of its methods for marketing strategy. “The purpose of diversification is for companies to grow through starting up or acquiring businesses outside the company’s current products and markets” (Armstrong, 2013). The following chart illustrates Adidas’ diversification strategy in order to enlarge its markets as well as search for new ways to expand its business. Existing Product | New Product | Existing Markets | | Taylor-Made –Adidas GolfAdidas acquired Taylor-Made to enter the golf industry. | New Markets | Deodorant and Shower Gel –Adidas is selling at drugstores and super markets. | miCoach –Adidas introduce a new product that helps customers choose between different trainings. |
02/20/2013
Adidas Diversification All throughout Adidas history, the company’s objective has been to grow and expand. Adidas is the Group’s core brand and is a leader in the sporting goods market. Adidas Group is conformed of: Ashworth, Rockport, Reebok Sportswear Company and Salomon group (Adidas Strategy). These mergers helped the company expand its product line by penetrating into already existing markets, as well as give Adidas a competitive edge to compete worldwide and to become the second largest athletic shoemaker in the world. Adidas Group has outsourced to multiple continents around the world. In the beginning, Adidas produced it’s apparel and shoes on its own, yet, since it’s huge expansion over the last decade, Adidas was unable to produce all of its products for which they turned to outsourcing its production and manufacturing. Because of the benefits of outsourcing, such as the lower cost for raw materials, most of the products of the company like sports shoes, apparel, accessories, and equipment are manufactured in Asian countries. However, despite its huge reliance on Asia, Germany is still in charge of all the design and development process of all its products (Adidas Diversification).
Furthermore, Adidas has used diversification as one of its methods for marketing strategy. “The purpose of diversification is for companies to grow through starting up or acquiring businesses outside the company’s current products and markets” (Armstrong, 2013). The following chart illustrates Adidas’ diversification strategy in order to enlarge its markets as well as search for new ways to expand its business. Existing Product | New Product | Existing Markets | | Taylor-Made –Adidas GolfAdidas acquired Taylor-Made to enter the golf industry. | New Markets | Deodorant and Shower Gel –Adidas is selling at drugstores and super markets. | miCoach –Adidas introduce a new product that helps customers choose between different trainings. |