Scale of Adidas

1886 Words Jan 6th, 2010 8 Pages
Adidas:

Strengths
-Strong success in Europe
-High-performance products
-Recent selling of subsidiary “dog” Salomon
-In many invents is the biggest sponsor
-Strong management team.
-Strong control over its own distribution channel.
-In the soccer industry, it has a stronghold.
-No bad reputation like child labour or environment pollution.
-Diversity and variety in products offered.
-Strong financial position with minimal long term debts
-Innovative designs in footwear enabling consumers to design their own shoes online
-First movers advantage in e-commerce Weaknesses
-American athletes endorsed by adidas are not as popular as Nike’s
-Nike gaining ground on European soccer market
-Public dissent over use of sweatshops
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Finally, adidas can expect to see revenue increases due to their newly implemented and recently successful own-retail activities. These include concept stores, factory outlets, Internet sales, and parts of Asian markets.

A threat for adidas is that it sees a negative impact on its revenues due to the exchange rate differences between the Euro and the United States dollar. They manufacture most of their product in Asia, where business transactions are conducted in dollars. Therefore, adidas is forced to convert back to the Euro as early as the manufacturing stage. Then, later on, after sales in countries that do not use the Euro.

PORTER 'S FIVE FORCES

Barriers to Entry –
Low

Due to the large scale of Adidas, the firm is able to control their costs to retain performance advantage over emerging competitors in the industry. Their web site is more sophisticated and enticing to browse, contributed to their large marketing budgets. The capital injection into web site development is high and must be updated frequently with new promotions and added features to attract online shoppers. There are many proprietary product differences in the industry therefore brand identity has an immediate competitive advantage. Adidas brand is well renowned globally and plays a major role in consumer decision making. Selling footwear online is highly

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