Adidas is older than Nike, it was established in the 1940s. Adidas’s
strategies are very similar to Nike. Adidas also use the
cost leadership generic strategy as well as the differentiation generic strategy, but Adidas focuses more on the
differentiation generic strategy. The corporate level strategy of Adidas focuses
on innovation, producing new products, services, and processes in order to deal
with the competition. Later, Adidas Group strategically decided to move from a
vertically integrated brand structure into a functional multi rand structure
for the Reebok and Adidas brands. This created a global sales function which was
responsible for commercial activities and a global brands function which was
responsible for the marketing of both brands. The global sales function was
also split into departments of wholesale and retail, which catered to the
various needs of both these business models. This was done in order to sustain
their corporate level strategy for the long run so that these divisions could
emphasize and work hard in their respective departments in order to make the
most of their efforts. This led to the elimination of regional headquarters and
moved towards more direct communication between the local markets and the
global functions. Moreover, Adidas implemented a multi brand strategy by having
a diverse brand portfolio which allowed them to cater all segments of the
market from players to almost everyone. This gave them the competitive
advantage. This helped them to keep a unique identity and concentrate on their
core competencies. Adidas focused their investments on the best marketing and
distribution channels in different countries by critically evaluating the
consumer buying behaviors and their constant struggle to secure prime shelf
space. They have also embraced e-commerce in order to become more efficient and
appeal to more customers and make purchasing much more easily accessible to
them. Their supply chain is closely communicated and hence it helps them to
customize their products which appeal to a wide range of customers. The
organizational culture of Adidas group obligates employees to be innovative.
This culture forces them to produce goods which are highly innovative and with
the use of the latest technology their products have a very good quality. By
using the latest technologies, they produce products which enhance performances
of players and they focus on sports such as football, tennis, basketball and even
training shoes which are used by anyone with the ability to run. Adidas
faces many problems every day, but sometimes almost invisible problems can turn
into crises. The first issue is that the company make
products 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 American
prefer. The company is now working to bring more American trend to its
products. Another issue is that Adidas lost endorsement deals
to its competitor, Nike. Michael Jordan’s brand is
still creating billions of dollars in profits for Nike. Today, Nike
endorses more American sports players than Adidas does. In addition, the company’s product turnaround is too slow.