Adidas Internal Analysis Essay

1. IntroductionCompetition and war similar commercialises argon rough-cut in every persistence. Especially since Globalization is influencing our economy, companies need to stay warring in do to survive against sensitiveborn rising competitors, which atomic number 18 fundamentally rooted in the Middle East Asia. Analyzing accept strengths and weaknesses and capturing new opportunities or avoiding threats, be one of the about strategic factors for reaching this goal. This paper is dealing with the German app bel Adidas, which is one of the worlds largest manufacturers for athletic contestswear and boast utilities. But why atomic number 18 they one of the leading global players in this certain labor? There argon some key factors, which influenced their oecumenical success. A fall apart of various departments, e.g. research and contractment, mercifule options and in-and outbound logistics, which ar working together in a fluent way, elements like guest relati onship management and brand deferred payment atomic number 18 the main drivers for capturing new nodes and the retention of regular customers. The intention of this dissertation pull up stakes be, to explain Adidas congenital strategies and the construction of their individual matched receipts. genius measurable basis for this competitive advantage is the resource based view model.The resource-based view as a basis for a competitive advantage of a whole lies primarily in the application of the bundle of worthy in tangible and tangible resources at the hards disposal. (Crook, T. R., et. al., 2008). In this scientific paper, I will conduct an midland organizational analysis of the firm. I will cipher out how and why Adidas is one of the most fundamental companies in its industry and will identify their success.2. General Information and Organizational StructureThe Adidas AG (Adidas dallying) is a German multinational corporation, which inventions and produces active wear, accessories and sport utilities. The fellowship is based in Herzogenaurach, Bavaria, Germany. The corporation basically consists of three companies, Adidas, the brand itself, Reeboksportswear and betrothed-Adidas Golf conjunction. Reebok is a subsidiary of Adidas since 2005 and also a manufacturer of athletic shoes, habilitate and accessories. Tailor-made-Adidas Golf Company designs and markets all products which be related to Golf. The Adidas group is the largest sportswear producer in Germany and Europe and the second manufacturer in the world, justifiedly behind Nike. The family was founded in 1924 as the Gebrder Dassler Schuhfabrik, but was officially registered in 1949 by Adolf Dassler, after the split of Gebrder Dassler Schuhfabrik between him and his older comrade Rudolf. One of the most important competitors of Adidas was and still is, jaguar, which was established by his brother Rudolf Dassler in 1949.The structure of the organization is very rise defined. Th ere are different functional departments such as marketing, output signal, R&D, customer services, operations, distribution, and human resource with clearly defined jobs at all levels. The vision of the Adidas Group is to be the leader in the sportswear industry, with sub-brands built upon a furor for sports and a sporting lifestyle. In browse to achieve the goal a profound recogniseing of the consumer and customer is essential. To satisfy the needs of the customers it is essential to get up a strong customer relationship in rule to understand their buying behavior (AdidasGroup, 2013). Adidasrevenue in 2012 was listed at 14.488 billion euros and gain ground was listed at 1185 million euros. In 2010, Adidas worked with 1,236 independent factories, in 69 countries. 69% of these factories where located in Asia and the rest in Europe and the U.S. 27% of the Asiatic factories are based in China. In 2006 the sales of Adidas in the Asiatic regions and in the emerging countries (S outh Korea, Romania, Russia, Croatia, and Brazil etc.) increased up to 147,8%. (Annual Report 2012, 2013)3. mental imagery Based View3.1. Tangible/Intangible CriteriaIn every crinkle are many types of resources and assets. rough resources are clearly visible and tangible and others may not. The Resource Based View is a device to prise the amount of tangible and intangible resources, in order to capture manageable capabilities with the goal, to build a sustain competitive advantage. The device is differentiating between intangible and tangible resources. Intangible resources are skills, services, corporatereputation or knowledge a firm offer provide. The collective knowledge of a firms workforce represents a tremendous resource. Intangible assets are heavy to quantify in financial terms and often im manageable to sell. cultivation and experience are the main drivers for the knowledge of a corporate workforce, and grows at bottom the structure of a particular industry. Tangi ble resources are known as raw materials, products or workforce. Corporations that are committed in primary resource extraction have holdings of very tangible secures or resources and often own the land out proper on which their resources are located or fabricate (Freiling, J., 2001).Furtherto a greater extent, but slight a tangible resource, the corporation owns the rights to the coal, oil or any other raw material, that is located on public land. In both cases, the resource is a physical reality, more or less tangible and the value of which raise be financially determined by observing the going market value of a certain good. Regarding Adidas, as one of the most important global players in their industry, it is also possible to distinguish their resources. Adidas is holding more than 50.000 employees, all over the world into their workforce. CNC machines are mappingd in the assembly line for the mass production of shoes, which is more or less their cash cow and keeps them lu cky. The Research and Development departments are equipped with CAM. Softwares for creating cutting edge designs. The main manufactories are located in Vietnam and China and the bases for the organization are based in Portland, Oregon (U.S) and in Herzogenrauch, Bavaria (Germany) (AdidasGroup, 2013). Patents, partnerships, sponsorships and cooperations with universities are intangible assets, which Adidas owns.3.2. CapabilitiesEspecially in times where raw materials and resources are gaining more and more value, companies need to workout their assets and resources in the most efficient way, in order to stay competitive. These opportunities are called capabilities. Capabilities can be described as organizationally embedded non-transferable firm-specific resources. (Crook, T. R., et. al., 2008). Capabilities can be divided into classifiable and threshold capabilities. On the one hand, threshold capabilities or resources are fulfilling the general criteria a firm has to provide, in o rder to survive on the market. Regarding our example of Adidas, the threshold criteria for their certain industry arebuildings, land, workforce, several departments and outsourced manufactories. But on the other hand, there are distinctive capabilities, which should not just keep the company alive, but deliver a competitive advantage. ( hall porter, M.E.1980).Also known as core capabilities, distinctive capabilities are the talents and unique elements that are embedded within the organization. These essential characteristics are considered passing preferred, since they provide the condescension with what it needs to be competitive in the food market and also provides the firm a competitive advantage. Therefore distinctive capabilities are generating the core competencies of an organization and are the key driving forces for a company to achieve its competitive advantages. Adidas utilizes its key resources and capabilities to create value and performance excellence. distinctive c apabilities that Adidas holds are e.g., Special R & D departments and correlations (universities), sponsorship agreements (FIFA/ NBA) , diversify operations, network and portfolio, good reputation as mid-priced brand in the industry, distribution network and strategic innovation. (AdidasGroup, 2013).3.3. Value Chain AnalysisUnderstanding what a particular business or firm is all about, it is necessary to analyze the specific activities the company is going with in their daily work process. The competitive advantage is build up on added values the enterprise is giving their products. Michael Porters Value Chain is modeling a chain of different activities, companies are performing in order to deliver and provide valuable products or services. Porter is differentiating between primary activities and supporting activities. Primary activities are more or less counsellinging on generating increase brim and to exceed the cost structure of particular products. These activities are mainl y enabled by supporting activities, which are industry-specific (Daft, L.R., 1983). By sourcing the activities, process flows can be mapped and can be used to isolate specific activities, in order to ebb the cost structure. Focusing back on Adidas, the company is separating their activities as pastime in-/ and outbound logistics, operations, marketing and sales and services as primary activities. sustenance activities in theirkey industry are procurement, research and development and human resource management. Value chain analysis examines business units and examines how products pass through the chain, in order from inbound logistics to service, market & sales and other sections. The culture provided shows where in the chain products are slowed or altered from the intended design or its usage.4. Competitive AdvantageOne of the most important goals of Adidas has been, to develop a strong competitive advantage, in order to stay in(predicate) and survive against the large number heavyweight competitors. The industry, in which Adidas interacts, is characterized by a set of many specific features. The extreme rivalry between Adidas and its competitors, Nike, Puma or unused Balance is exalteder than ever before. Nevertheless, most of these brands outsourced their production and re-defined themselves as brands or marketing organizations. Despite the fact that Adidas currently ranks right behind Nike in the segment of sports shoes and sportswear market, Adidas still has been a fortunate business enterprise right from the beginning of their establishment by Dassler in 1945. The encouragement and application of a spirit of constant and updated scientific innovation and excellence has resulted in generating such a powerful competitive advantage for Adidas that its market opponents find it hard to beat. The broad(prenominal) performance, market orientation, technological development and brand promise, created the expected value for customers. Especially the com panys policy and corporate culture, that includes providing their customers with the necessary technological applications, in order to meet and satisfy the full needs of their end-consumer. (Kumar, V. & Reinartz W. 2012).Ultimately, this translates to tailor-made performance products for individual customers. Tailor-made is concentrating on especial product line and a particular market segment. Therefore technological superiority of its products is the primary factor of market keenness for Adidas. Nevertheless, an intense and targeted marketing mix and strategy is the second most important key driver of success. An important fact and promotional shit for products has been, to commingle celebrities and professional sport idols into theirmarketing mix. This strategy seemed to be very successful and generated a steady source of profit and sales. Consumers appreciated and enjoyed the emotional experience, to helping the same daily products with their idols or people, who are influen cing them. Furthermore, Adidas is following the main rules of customer relationship management. Feedback from regular customers and surveys about particular products or advertisements created a high level of customer involvement and loyalty, what turned out to be the most effective strategy. These methods and tools helped Adidas to develop and build a long-term profitable customer relationship.5. Conclusion5.1. stand up / TOWSDuring the economic crisis in year 2009, many companies and enterprises suffered turnover, profit and had to restructure their business. Many different factors were key drivers for this crisis, but not successfully adapted strategies regarding supply and demand. Consultants, who are analyzing and advising enterprises, implement different methods and tools, in order to improve the clients business. One of these powerful tools is the SWOT- Analysis. But what is SWOT? How should companies or consultants use this tool, in order to succeed? And the most important question is, is Adidas using or ever used this methods, if yes how did they? SWOT is expecting from its users to examine, internal strengths and weaknesses of their business and to summarize external opportunities and threats, in order to develop new strategies for improvement. (Bhm, A., 2008). After developing these ideas, the proper implementation of them is important as well as the examination itself. The TOWS-matrix ore the TOWS-analysis involves the same basic process of listing strengths, weaknesses, opportunities and threats like the SWOT analysis is claiming from its users. But furthermore the TOWS analysis is a tool that enables managers to take advantage of opportunities and minimize threats by exploiting strengths and overcoming weaknesses.In case of Adidas the strengths are mainly, their strong brand value as one of the most successful brand, a strong and proven marketing strategy, networks and strong franchising, their leading side of meat in the industry as one of the largest player in the industry, diversifiedoperations in different parts of the world and the most important strength is their competitive pricing. But the enterprise has also some weaknesses. Some of the weaknesses Adidas might has to struggle with are the bad performance of Reebok in non US markets, stiff competition and similar big brands which means customers have high brand switching, high cost structure and the dependency on sport industry/athletes/sponsorships (Borowski, A. 2011). External factors are including the threats and opportunities. Increasing prices for raw materials, forged product-imitation and the defective competition in the sector with Puma and Nike are the key threats, which could threaten Adidas (AdidasGroup, 2013).It is possible to use strengths to avoid threats and to capture opportunities, with the help of the TOWS-matrix. Therefore strategies, which Adidas could use in order to capture opportunities and avoid threats could be, to use diversified operat ions in different parts of the world and strong brand recognition for sponsorships in growing markets and the well-considered usage of celebrities (not just for advertisement, also for opening semiprivate sport academies). To minimize internal weaknesses by capturing opportunities, the enterprise should keep their focus on their strong and proven marketing strategy, networking and their strong franchising, in order to stay competitve and build close long-term customer relationships (Borowski, A. 2011). A part of that, the acquisition of competitors could decrease cost structure and rivalry within the industry and safe their status quo for the future.6. BibliographyAdidas, Deutsche Telekom, Infineon German Equity Preview. Bloomberg L.P. 16 January 2008. Retrieved on 15th of March from http//www.bloomberg.com/apps/news?pid=newsarchive&sid=ah3ZhaeNWMdM&refer=germany AdidasGroup, (2013) Retrieved on eighteenth of March from http//www.adidas-group.com Annual Report 2012. Adidas. Retriev ed on 10th March 2013 from http//www.adidas-group.com/en/investorrelations/financial_data/default.aspxBarney, J.B., (1991). Firm Resources and Sustained Competitive Advantage. Journal of anxiety. Texas A&M University.Borowski, A. (2011). Adidas market Strategy An Overview. Norderstedt GRIN VerlagBhm, A., (2008).The SWOT Analysis. Mnchen GRIN Verlag.Crook, T. R., et. al., (2008). strategic resources and performance A meta-analysis. Strategic Management Journal. UK John Wiley & Sons, Ltd.Daft, L.R., (1983). 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