DIPLOMA IN BUSINESS ADMINISTRATION Name : Tay Xu Hong, Kang Chun Dong, Chai Yee Zhe, Student ID : 17032681, 17039439, 17037805 Topic selected : Adidas- Porter’s five forces Subject code : BITC 0103 Subject Title : Information Technology 2 Due Date : Week 11 (24 October 2017) Lecturer : Miss. Mangair Table of Contents 1.0 Introduction 3 2.0 Company Background 4 3.0 Description of Adidas products and business process 4 3.1 Products 4 3.2 Business Process 4 4.0 Porter of Five Forces 5 4.1 Force 1: Threat of new entrants 5 4.2 Force 2: Bargaining power of buyer 5 4.3 Force 3: Bargaining of suppliers 5 4.4 Force 4: Threats of substitute products and services 5 4.5 Force 5: Rivalry among Existing Firms in the Industry 6 …show more content…
And in the report we present, will include the company background of Adidas, porter five forces of the company and the conclusion about our report. In company background we will talk about the company history and the founder of the company. Next about the porter five forces, the five forces are threat of new entrants, bargaining power of buyer, bargaining power of suppliers, threat of substitute product and rivalry among the existing firms in the industry. And the definition of the porter five forces is defined as the framework for analyzing competitiveness in the particular industry. It means that these forces can help to analysis why different industries are able to sustain different levels of …show more content…
Because Adidas face intense competition from Nike, Puma, Reebok, New Balance and so on. The threat of Adidas to the competitor is that it operates via both – the Adidas brand has a strong subsidiary in Reebok. The combination of both gives a strong valuation to Adidas. An example of Nike. As Nike can be the competitor of the Adidas is because now days who doesn’t know Nike is the most popular and number one footwear manufacturing company. The reasons why Nike is so popular is because the shoes especially for running, training and leisure activities all this Nike is can be trusted from their quality. And most of the people will said that Nike products will never let you feel disappoint. This situation cause threat to Adidas. Conclusion The sportswear depends on marketing, variety, innovation and endorsement of professional athletes. All the brands incorporate the same strategies with slight variations. Adidas started off with the best of intentions to answer the needs of professional athletes. Appendices Stan Smith Yeezy Boost NMD_R1 Adidas football boots:
4. Further Research—Gather information on Nike’s recent moves and accomplishments, and those of its rival Adidas. Are both firms following the same strategies and using the same structures to support them? Or, is one doing something quite different from the other? Based on what you learn, what do you predict for the future? Will Nike stay on top, or is Adidas the next industry leader?
In addition, these companies are able to easily compete in the sports apparel market because the barriers to entry are low. On the other hand, many companies should think twice before entering the market. One reason is the large capital costs that are required to meet consumer demand in the market. In addition to large capital costs, some of the largest companies have gained customer loyalty based on their strong marketing skills. For example, Under Armour, Nike, Adidas, Reebok, ASICS, make new entrants into this industry much more difficult to compete with when these companies have a big share in the market already. According to Exhibit 4 in the textbook, it shows the major competitors and brands in 2013. Nonetheless, competition is intense in the sports industry market but, the high levels of product differentiation can also act as a barrier to entry for many companies because company’s need a high level of marketing to market their brand to consumers.
Competitors in the industry can wreak havoc on the bottom line for a company. With rivals, a price competition usually ensues, which benefits the customers but hurts the competing businesses that share a common strategy. In reviewing rival sellers, many competitors exist within the sports apparel and footwear industry, but most of them are unable to compete with the industry giants, Nike and Adidas. They are well seated in the industry and their sales reveal this ultimate strength, however, Under Armour is putting pressure on these mammoths. In 2015, global sales of sports clothing and footwear equated to $250 billion, of which Nike grabbed $30.6 billion, Adidas held in its grasp $18.8 billion and Under Armour had a much smaller piece of the pie, at $3.9 billion globally. In reviewing these numbers, it looks like Under Armour is really subpar to the industry giants, but this is not exactly the case. Under Armour in the past couple of
Porter’s Five Forces is defined as threats of new entrants, bargaining power of suppliers, power of buyers, the threat of substitutes and rivalry among existing competitors. New entrants into the industry aim to gain market share from rivals, so the intensity of competition may require to make changes on current strategy of marketing to maintain existing market share. The bargaining
The Rivalry among competing sellers of sporting goods such as Under Armour, Nike, and Adidas-Reebok is strong and likely to intensify. The rivalry among sporting good sellers of energy will keep growing and will become stronger in coming years. Under Armour. Nike, and Adidas-Reebok have similar or competing product offerings and that is why competition among them is so high. If these companies want to stay in business they need to come up with different strategies that will set them apart from the opposition. Competition is intense and revolves around performance,
Nike has totally changed the sports footwear and sportswear market. Nike's huge selection of merchandise consists of specialized workout equipment, footwear, clothing, accessories and sports components. Nike is among the world's biggest brands and a leader in the sportswear industry because of their advertising, innovative products and sponsorship of top teams and
By the use of Porter’s Five Forces model to analysis the athletic footwear market around the world; our strategy is to cut the price of footwear in the Year 11 and 12, and to increase budget of advertisement and to bid celebrity endorsements in order to boost the sales volume in a competitive industry .
The following is my five forces analysis of the competitive forces confronting the companies that operate in the industry that Under Amour, Nike and Adidas operate in.
The strength of the competitive forces vary among the Under Armour, Nike, and The Adidas Group. The buyer bargaining power of Under Armour, is somewhat weak. Under Armour’s growth strategy entails, “Securing
The athletic shoe industry will be first analyzed by the Porter’s Five Forces framework. The well-known Porter’s Five Forces is a model that analyzes an industry and helps firms develop a business strategy. The five forces model focuses on six forces that will determine the attractiveness of this industry: (1) the risk of entry by potential competitors, (2) the intensity of rivalry among established companies within an industry, (3) the bargaining power of buyers, (4) the bargaining power of suppliers, (5) the closeness of substitutes to an industry 's products, and (6) the power of complement providers (Hill, Jones, & Schilling, 2015).
Nike’s recent decline in market share and stock can be attributed to changing trends in consumer spending habits and apparel tastes. Nike can re-establish a competitive advantage in the short-run by implementing an innovative design team and brand ambassador. Long-run competitive advantage can be achieved by fully committing to a sustainable innovative business model or by incorporating innovative technology trends into their retail structure.
The analysis of Nike in athletic footwear market based on porter’s Five forces model by Duke
Adidas Group, as one of the world’s retail leaders in sportswear, has as primary target the sports participants, including high performance athletes, as well as non-athletes who are inspired by those at the highest level of their sport, and those that really love sports as part of their lives.
Those brands allow Adidas to address multiple consumer needs, exploit market opportunities from various angles as well as be less affected by one-dimensional market risks.
Today, the adidas® product range extends from shoes, apparel and accessories for basketball, soccer, fitness and training to adventure, trail and golf . adidas®, like many companies during the 1960s, believed in large volume sales. Lot of effort was put into advertising the brand in the early days through sporting celebrities. One of the main reasons that the colour of the 3 stripes on the running shoes was changed from black or dark brown to white was to facilitate easy brand recognition and identification, which in turn would promote the overall sales. The ideology was that the ability of a brand to stand out in the market place will enhance its chance of standing out in the customers mind. adidas® produced shoes that could be used for different types of sports.