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Introduction

Strategic management is a continuous process of planning, analysing, assessing and monitoring every necessary activity that is required for an organisation to achieve its goals and objectives (Hitt, Ireland and Hoskisson, 2012). In such dynamic business environment, for a business to sustain its position and competitive edge, it is crucial to implement strategic plans and take strategic decisions. Strategic management helps the firm to assess its present situation, plan out strategies, implement them and effectively analyse its effectiveness. The following report is based on strategic management of Adidas which is a German multinational firm headquartered in Herzogenaurach , Bavaria. The report focuses on a detailed case study of the firm, analysis of its strategic position, company's strategic direction and recommendation for improvement (Doz, 2017).

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Company Overview

Adidas AG is a global corporations that deals in designing and manufacturing of sport shoes, clothing and sport accessories. It is the second largest sportswear manufacturer in the world, after Nike. The products developed by Adidas are accepted and worn by people all around the world. The company focuses on developing high quality products that could sustain even in the worst situations.

History

Adidas (now Adidas AG), was founded by Adolph (Adi) Dassler in 1920. By 1924, he and his brother Rudolph Dassler started working together. The name by which they sell their products was Gebruder Dassler Schuhfabrik which is translated to Dassler Brothers Shoe Factory). The firm equipped its first athletes at the 1928 Olympics in Amsterdam. The quality of the company's products at that time was so outstanding, that athletes wearing Adidas foot wears won more than 800 medals and world records.

Vision And Mission Statement

Vision: The vision of the company is to be a global leader in the sports industry and emphasizes on building brands with passion for sports and sporting lifestyles. The company is committed towards strengthening its products and brands to improve its competitive position.

Mission: The mission statement of the company states, “We are innovation and design leaders who seek to help athletes of all skill levels achieve peak performance with every product we bring to market. We are consumer focused and therefore we continuously improve the quality, look, feel and image of our products and our organisational structures to match and exceed consumer expectations and to provide them with the highest value.”

Strategic Choices Of The Company

Business plan of Adidas is based on three strategic choices with emphasis on expanding its customer base (Grunig, 2013).

These choices are described below:

  • Speed: Adidas focuses on providing the customers the best possible products where and whenever they desire. The aim of the company is to become first true fast sports company of the world.
  • Cities: With rise in urbanisation, the company wants to implement its strategies towards attracting more customers living in urban areas of the world. The firm wants to over-proportionally grow its share of market in selected cities of United Kingdom, Japan and many other countries.
  • Open Source: The firm leaves its gates open for consumers, athletes and partners to co-create sport culture along with the company. The firm through collaboration and innovation aim to develop the culture of sports throughout the world.

Acceleration Plan

Adidas is formulating its plans to successfully implement these strategies and taking new initiatives to effectively execute these new plans (Eden and Ackermann, 2013).

These initiatives are as follows:

  • Portfolio: The company is working towards sharpening the emphasis of its brand portfolio to achieve less complexities and more focus. Concentration of the company would be completely on Reebok and other core competencies of the firm in apparels and foot wears.
  • Digital: With ongoing technological advancements and innovations, Adidas is planning to strengthen its online image with its relatively young workforce. The aim would not just be limited to establishing a direct relationship with the customers, but to enhance the overall performance of the firm.
  • ONE Adidas: The company aims to achieve overall operational excellence. The initiatives encompassed in ONE Adidas would allow the firm to work more efficiently and aligned manner. The mission of the company from this initiative is to create one global firm.

Swot Analysis Of Adidas

SWOT Analysis refers to a effective analysis of company's strengths, weaknesses, opportunities and threats. This analysis is conducted by the company to determine its competitive position in the market (Hitt and Duane Ireland, 2017). This analysis would help Adidas to critically analyse its core strengths and weaknesses and would allow the firm to reconsider its strategies with an aim to accelerate its global operations. The SWOT Analysis of Adidas is briefly mentioned below:

Strengths

Adidas is one of the finest manufacturers of sportswear and shoes. Its core strengths are as follows:

  • Legacy: The core company was established in 1949, and since then the firm has built a strong legacy. It has successfully established itself as a youthful brand.
  • Diversification: The firm deals in diverse product lines and multiple product portfolios. With its mid range firms like Reebok, it has established a wide range of sport shoes and apparels.
  • Financial Position: With a revenue of 21.2 Billion Euros in 2017 (Annual Financials For Adidas AG,2018), the firm maintains a strong financial position in the market. Moreover, the firm is planning to increase this figure in the coming years too, by expanding its market in different cities and enhancing its online performance.

Weaknesses

The firm is the largest manufacturer in New York, yet it has some weaknesses which are as follows:

  • Price Range: Adidas adopts innovative production methods and technology to produce and distribute its products. This has resulted in high prices of its products which only attracts limited customers in developing countries.
  • Outsourced Manufacturing: The firm is over dependent on outsources in various markets, especially in Asia. This is one of the biggest weaknesses of the firm.
  • Limited Product Line: The company has got just 2 brands under its name. There is still a wide scope for its product line expansion. Limited product lines would only attract limited customers who have been loyal to the firm (Hair and et. al., 2012).

Opportunities

There are many opportunities for the company to strengthen and expand its market. These opportunities are mentio


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