Adidas is older than Nike, it was established in the 1940s. Adidas’sstrategies are very similar to Nike. Adidas also use thecost leadership generic strategy as well as the differentiation generic strategy, but Adidas focuses more on thedifferentiation generic strategy. The corporate level strategy of Adidas focuseson innovation, producing new products, services, and processes in order to dealwith the competition. Later, Adidas Group strategically decided to move from avertically integrated brand structure into a functional multi rand structurefor the Reebok and Adidas brands. This created a global sales function which wasresponsible for commercial activities and a global brands function which wasresponsible for the marketing of both brands. The global sales function wasalso split into departments of wholesale and retail, which catered to thevarious needs of both these business models.
This was done in order to sustaintheir corporate level strategy for the long run so that these divisions couldemphasize and work hard in their respective departments in order to make themost of their efforts. This led to the elimination of regional headquarters andmoved towards more direct communication between the local markets and theglobal functions. Moreover, Adidas implemented a multi brand strategy by havinga diverse brand portfolio which allowed them to cater all segments of themarket from players to almost everyone.
This gave them the competitiveadvantage. This helped them to keep a unique identity and concentrate on theircore competencies. Adidas focused their investments on the best marketing anddistribution channels in different countries by critically evaluating theconsumer buying behaviors and their constant struggle to secure prime shelfspace. They have also embraced e-commerce in order to become more efficient andappeal to more customers and make purchasing much more easily accessible tothem. Their supply chain is closely communicated and hence it helps them tocustomize their products which appeal to a wide range of customers. Theorganizational culture of Adidas group obligates employees to be innovative.This culture forces them to produce goods which are highly innovative and withthe use of the latest technology their products have a very good quality.
Byusing the latest technologies, they produce products which enhance performancesof players and they focus on sports such as football, tennis, basketball and eventraining shoes which are used by anyone with the ability to run. Adidasfaces many problems every day, but sometimes almost invisible problems can turninto crises. The first issue is that the company makeproducts without considering the American tastes. America has a very different mindset comparing to Germany.Adidas did not listen to the retailers’ and consumers’ feedback on what Americanprefer. The company is now working to bring more American trend to itsproducts. Another issue is that Adidas lost endorsement dealsto its competitor, Nike.
Michael Jordan’s brand isstill creating billions of dollars in profits for Nike. Today, Nikeendorses more American sports players than Adidas does. In addition, the company’s product turnaround is too slow.