Comparative analysis of Nike and Adidas

Comparative analysis of Nike and Adidas

 

 

Objectives

 

This Blog is based on group video about the comparative analysis of Nike and Adidas  by myself Ashok Tamang, Sudeep Pandey, Bikash Chaudhary and Nelson Mukarum Rai. It is a team work and represents the group Assessment of the module,  Strategy: Choices and Impact.

 

 

 

Introduction of Adidas

 

Adidas was founded in 1984 by Adolf Dasler, in Germany with the trademark of three strips. The company aimed to produced best shoes for sports, protect the athelates from injuries and which is durable. Now, it is one of the leading premium global brand in atheletic footwear and appearal market.

 

Swot Analysis of Adidas

 

Strengths

 

• Adidas has been undertaking research and development program since the  date of its establishment in their product of athletic footwear and apparel. 
• Links with the established research partners like University of Michigan and Wasada University Tokyo.
•  They own several reputed brands like Rebook and Tylormad . 
• Sponsoring the biggest sports events like FIFA, UEFA, NBA and Olympics .
• They have 2400 stores world wide to sell their product and 
• Celebrity endorsement such as David Beckham and Reggie Bose.

 

weakness

 

• Adidas outsource 97 % of its global production, 35 % of which goes to china. 
• Concerns in the quality of outsourced products. 
• Lack of labor laws in the company production.

 

Opportunities

 

• Transformation of the organizational structure 
• Sponsorship in the global sports events have positive word of mouth  
• Sponsorship programs increase the brand reputation and open up the new market. 
• Adidas has been sponsoring the FIFA World Cup,  The NBA, The Olympic.

 

Threats

 

• High intensity of competition in the market. 
• Nike and puma are the biggest competitor of Adidas 
• Manufacturing of similar kinds of products using similar technologies 
• the market is being more fashion oriented nowadays 
• Company like Hugo Boss has been focusing in the manufacturing of the fashionable sport shoes and apparels.
• Threats of substitution

 

PESTLE Analysis of Adidas

 

Political

 

• Policy to control and monitor hazardous substance
• Following all the current employment laws
• Protects and supports the rights of employees

Economical

• Creation of employment opportunities globally
• Manufacture of products in Asia based countries with low labor salaries

Social 

• Wear by any race, age, religion and any lifestyle
• Fashion with the special design in most products
• Focus on athletes and anyone

Technology

 

• Making of the first smart shoes
• Use of recycled materials in the product
• Use of environmental friendly packaging materials

Legal

• Supports UN Declaration of Human Rights
• Company policy and procedures, adhere to all applicable domestic laws
• Policies consistant with core labour principles of ILO

Environmental

• Adopted coherent environmental strategy 
• Reduction of its relative environmental footprints by 15 % by 2015

 

 

 

 

Introduction of Nike 

 

Nike is an american multinational manufacturing company of  athletic footwear and apparel and major manufacturer of other sports equipment established in  1964 by Bill Bowerman and Phil Knight. 

 

 

SWOT analysis of Nike

 

Strength

• Worlds number one athletic shoes and apparel manufacturer 
• Designing and selling of shoes for the varieties of sports (football, basketball, etc)
• Strong brand image 

 

Weakness

• Market share dependent on footwear 
• Income derived from selling products into retailers 
• Retailers are price sensitive, leads to squeezed margin
• Low price competition in the market

 

Opportunities 

• Improvement in market segments
• Preferences for young generations 
• Expanding the company( sunglasses and jewelry)
• Enter into the new market 

 

Threats   

• Product bought and sold in different currencies
• The fluctuation in the value of money 
• Unstable cost and margins 
• Global economic recession 

 

 

 

 

PESTLE analysis of Nike 

 

Political 

• US government's growth oriented policies
• Low interest and competitive taxation 
• Currency exchange stability 
• Corporate with the government initiatives regarding transparency 

 

Economical 

• Facing challenging trading condition. 
• Manufacturing in countries with underdeveloped economies. 
• Benefited from the low wage rate economies 

 

Social

• Facing challenges arising from their CSR (corporate social responsibility)
• Inequality, global chain regarding the use of sweated labor including that of children and their pay and working conditions (Foster and Harney, 2005). 
• Facing competitive challenge from the growing health and fitness conscious consumers.

 

Technology

• Used enhanced digital metrics to analyse customer demand and revise segmentation (Myerson,2007)
• Linking transaction and supply chain event management with SOAP ( Simple Object Access Portocal) and MPPS (Massively Parallel Processor System). 
• Consumers make payments via mobile phone (Myerson,2007).

 

Legal 

• Adapting legal and policy frameworks in all trading areas. 
• Faced legal difficulties in international expansion,
• Allegation of sweated labor, closed factories in Pakistan 

 

Environmental 

• Maintained positive position i.e environmental issues, with ISO 14000 compliance presented as part of its overall policy (Gallagher and Winthal, 2012). 
• Launched pilot projects in various aspects of its business, such as the reduction of carbon emissions and elimination of waste (Holt et al.,2012).

 

Competitive analysis of Nike and Adidas

 

• Contrary to Nike's origins in running and track and field, Adidas claim to fame came through its soccer cleats. Adidas was considered to be the premier brand for soccer equipment for a long time.
• They hold a similar target market and produce similar merchandise in the same sports also including small market of skateboarding and a lifestyle fashion line.
• They both are known to spend millions of dollars signing the best athletes representing their respective brand.
• Nike engulf its consumers with buying experience. Adidas on other hand lacks this sensation within its retail stores.
• Both Brands have similar communication and marketing mixes and both companies continue to develop new technology in an attempt to outdo the other.

 

Financial Comparisons

 

Adidas

 

Nike

 

 

 

References

Adidas. (2016, 1 19). Adidas. Retrieved from adidas Group - Strategy Overview: http://www.adidas-group.com/en/group/strategy-overview/

 

Forbes. (2016, 1 19). Forbes. Retrieved from Nike on the Forbes World's Most Valuable Brands List.

 

Nike. (2016, 1 19). Nike. Retrieved from About Nike - The official corporate website for NIKE, Inc. and its affiliate brands.: http://about.nike.com/