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Corporate Strategy of Adidas Essay

The corporate strategy of Adidas is to become the world leader in sporting goods manufacturing. The company mission statement is as follows; “The Adidas Group strives to be the leader in the sporting goods industry with sports brands built on a passion for sports and a sporting lifestyle” (Adidas). It carries a wide range of high-performance sporting goods based on a few key market segments. This was the core strategic approach to marketing adidas sporting goods prior to 2005.

Adidas has maintained its primary market presence in the athletic footwear, soccer kit and boots and golfing apparel markets. adidas also has developed a share in other sports footwear markets including cricket, basketball, rugby and tennis. Through the acquisition of Salomon, adidas have also entered into the winter sporting goods market, and of Reebok, into the leisure footwear market.

These brands will help adidas challenge, Nike, to be the largest and most successful sports manufacturer in the world, and show a slight change in strategy since before the restructuring. Therefore there was a common strategic approach to the management of the company’s lineup of sporting goods prior to the restructuring based around the marketing of the company and its premium performance based sporting

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goods that has since diversified into other market segments.

The lineup of adidas’ businesses in 2008 is very strong for the following reasons based on market segmentation. adidas now possesses a market share in the performance sporting goods market, the leisurewear market, to golf and winter sports markets. The presence in these markets along with the acquisitions of Saloman and Reebok have allowed adidas to split its businesses around a few key segments, and to become leaders in each of these segments.

The strategic fit between adidas and the companies it has acquired recently is good. Both Saloman and Reebok present themselves as market leaders in their respective markets, the leisure shoe market and the mountain pursuits market. adidas is committed to becoming a leader across all segments of the sporting goods market and wants to be perceived as a high-performance manufacturer, and the purchase of these two companies will help adidas with that aim.

‘Adidas’ business lineup exhibited a very good resource fit, as well as showing good market coverage. The marketing of superior quality and actual usage by the high performance sports personalities who endorse these products has helped the three major areas of adidas’ income. There is also potential for skills transfer, cost sharing and brand sharing due to the similarity of all these markets and products. The cash cows are wholesale, retail and other businesses.

The wholesale and retail markets are combined here, under two major brands, adidas and Reebok, which are then further split into adidas Sport Performance, and Adidas Sport Style. Reebok is a separate brand which is further separated from the two adidas brands. Reebok is aimed at the women’s fitness and style market, which the two adidas brands do not cater to. The other area of the business deals with the markets that do not fall into the category of performance or style, and may be considered cash hogs.

This area is dominated by TaylorMade, a golfing goods and club manufacturer that is the number 1 iron brand in the United States, however adidas also controls Ashworth and adidas golf, both of which contribute one-third of Adidas Group’s other business revenue. These markets still require investment in order to compete with the various other suppliers of golfing equipment.

The restructuring undertaken in 2005 has produced a very sensible and competitive company. The acquisition of Reebok may well improve shareholder returns due to the synergy achieved by this merger, and the market coverage adidas now has over the sporting footwear market. The strategic actions needed are to consolidate adidas’ position in all of these markets in order to attempt to challenge Nike as the worlds’ leading sportswear manufacturing company. Also read Axiata strategic management

References

Adidas. Adidas Group Annual Report 2009 Corporate Mission Statement. 2009. 5 May 2010

http://adidas-group.corporate-publications.com/2009/gb/en/structure-and-strategy/corporate-mission-statement.html.

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