Name: Nida Barros ID: 6019088 Section: 11

Case Study 1.3: Adidas

Compare and evaluate Adidas’s and Nike’s global competitiveness and global

strategies

Both Adidas and Nike are known to be the biggest in the sportswear industry

for many years. They have been a rival since forever. Even though both are big, the

number of product type and the number of sale in each region are quite close. Nike

still leads the market, making more money and share than Adidas. Adidas suffered

from an economic boycott in Russia and the recession in 2015 because they heavily

invest in retail there. Fortunately, China came in and gain more retail network which

benefits Adidas a lot in many aspects. Nike may survive in Russia but they face

another economic crisis which Adidas has coped up better in 2010-2011. Due to how

Adidas try to retool its Reebok brand that is also under Adidas Company which make

they lost focus on maintaining pace with Nike in 2012-2013. Maintaining both brands

seem to be a little too much to handle consider Adidas that already been number 2 in

the industry and have to maintain Reebok as well. Adidas may suffer more than Nike

but still leading the market in its home market Germany. They definitely spend more

money on marketing because of Adidas’ strong brand equity.

In term of competitiveness, both are close to one another. For global strategies,

Adidas seems to be more stand out. Consumers on both brands are those who do not

always buy the product for exercise purpose. The competitive environment in

sportswear is intense. There is a high risk of substitution but still developing

differentiation is difficult so Adidas find a way in selecting in endorsement in term of

building the differentiation. However, Adidas tends to invest more in raising

awareness more than Nike. They sponsored uniform for a popular football team like

Real Madrid, AC Milan, and world Cup-winning Spanish team as well as the UK

Premiership football as a vital marketing tool to showcase product since the UK

football is the most in-demand and watched in a global market. They didn't only do

sponsorship within European countries but also China, an Asian country as well.

Meanwhile, Nike produces for FC Barcelona. Another thing about Adidas is that they

used fashion designer to work on fashion position for the brand as well. This indicates

that they would like to expand more in term of product line and how this could raise

awareness as well. Sports but also a fashion.     

Recommended region in the next 5 years

Asia-Pacific is recommended region since they were in the top 3 regions for

Adidas in 2014. According to the article, they are set to overtake this going forward

within Asia-Pacific. China can be the starter point within the region since China was

number 2 in term of the strongest market growth and market share in 2014-19 after the

USA which is outside the Europe market. China generated 26% of value in 2014

compared to 19% in 2006 which indicate that the number has leaped forward a lot.

However, in China, Nike is the leading brand which makes it number one target for

Adidas. Beside from China, within Asia-Pacific, there are also India and Japan which

were also on the list of 7 markets outside Europe. The fact that China is the sportswear

manufacturer is the key why China has a lot of potentials. Adidas has developed and
sponsored a lot of sports events also the sports facilities in China just to raise

awareness like in other countries that Adidas have done before. Including the retail

operations and store in China. Hong Kong can easily follow China’s Adidas plan since

they are part of China in term of an opening store and retail shop. Another country in

Asia-Pacific like Japan, India could follow China’s plan as well. In the case of India,

Adidas is the number one brand in India. The market in India is expected to see a

growth of 5% over 2015-20 and will show the fourth largest growth of all global

market. Again, just like how they have done in another country. Marketing

opportunities in India are huge. Nike has yet to enter this country in term of

manufacturing. Adidas do the supplying of uniform to India Cricket football team and

to the India Premier League. Beside from supplying the uniform to India football team

that is a similar path from another country, Adidas can include more retail store just

like in China since Adidas itself is number one in India.

Also, the Reebok stores have been closed down for 1,000 stores in 2012. From the

list of 7 markets outside Europe 2014-19, India is on number 3 in the list so I believe

that India still has a potential on back to open reebok store again or Adidas store.

For Adidas to become No.1 in the global sportswear industry  

By being number one in the global sportswear industry, Adidas may take a look at

Nike operate or market its business since they are currently number one in the

industry. As Adidas lost its pace with Nike in 2012-2013, this indicates that Adidas

couldn't focus on both 2 brands at the same time and with the expansion in term of
fashion position. At this point, they should only pay full-time attention to Adidas. As

we can see, Nike only maintain its brand with no any subsidies under them and they

have been doing very well globally. Regarding how they hire fashion designer from

H&M and Zara, it is good to expand more but as we know most of the consumer from

both brands who purchased the product doesn't use them to exercise. That’s mean

consumer prefer product in sporty rather than fashionable like Zara or H&M. That’s

why people bought them. Sportswear is already the fashion and trend itself among

consumer. Adidas have sponsored a lot of China and European football team, events,

and facilities. They may find a way to be a sponsored for America sports team.

Whether national team or not since Nike is from America and they are the world

power country as well. People there are familiar with Nike more so by being a sponsor

for America sports team, American would be able to see more Adidas product through

an athletic player. It can be any sports such as football, basketball or American

football.