The first extension strategy that Adidas could consider is the idea of redesigning products. For example, as fashion tends to go out of trend or out of date, Adidas could reuse ideas from previous shoes and reincorporate those ideas in new shoes with slight adjustments. Since there are a large variety of designs for shoes, people will easily become excited over a different design, even though it may only be slightly different from one that was sold a couple of years ago.
The second extension strategy Adidas could consider is promotion. This includes offers such as discounts (i.e. 20% off, buy 2 get the 2nd one for half price), having a sale season (i.e. winter sales), limited time offers, or sponsorships. These promotions often work very well with footwear and apparel because these products are increasingly popular with Adidas. Having these promotions will increase the consumers’ desire for buying the products, and will even cause impulse buying, where the customer may buy something he/she did not intend to buy which leads Adidas to generate more sales and revenue. The third extension strategy Adidas could consider is extending to new markets. Since Adidas’ sales are mainly focused on Europe, North America and Greater China, one strategy to extend the product life cycle is to sell these products in other countries such as Russia, South America, different parts of Asia and so on, and entering new markets to promote their products. This could include any one of their three product lines – footwear, apparel and accessories. Links to Images: http://www.shoes2013.com/pic/Adidas_Running_Shoes/Adidas_3D_Running_Shoes_White_Grey_Yellow_1074.jpg http://www.nbajames.com/images/adidas-crazy-8-shoes.jpg http://www.worldfootballboots.co.uk/images/Football%20Boots/Mes%20F50%20adizero%20Messi%20Football%20Boots%200002.jpg http://www.adidas.com/us/product/mens-training-lightweight-hoodie/TZ191?cid=Z40292&breadcrumb=sxZu2Z1z13071 http://www.adidas.com/us/product/mens-basketball-rose-tech-shorts/TY246?cid=Z41792&breadcrumb=sxZu2Z1z13xgj http://www.adidas.com/us/product/womens-training-weekender-jacket/TZ354?cid=Z31197&breadcrumb=sxZu3Z1z13071 http://www.adidas.com/us/product/mens-originals-trefoil-tee/TL972?cid=X53105&breadcrumb=sxZu2Z1z13xgi http://www.adidas.com/us/product/training-naloa-sunglasses/D7521?cid=Q07824&breadcrumb=swZu3Z1z13071 http://www.adidas.com/us/product/womens-running-aktiv-marathon-10-shorts/QU822?cid=Z22171&breadcrumb=sxZu3Z1z13xgj http://www.adidas.com/us/product/womens-originals-big-trefoil-tee/WU473?cid=Z35441&breadcrumb=sxZu3Z1z13xgi http://www.adidas.com/us/product/originals-large-jersey-duffel-bag/WR443?cid=Z37705&breadcrumb=swZu2Z1z13071 Brief Description of Adidas' Product RangeAdidas has a great depth of products in relation to its breadth. Adidas has three main product lines – footwear, apparel and accessories, and they are all focused on a specific type of fashion (sportswear). Even though this may not seem like a lot, within those product lines are an extensive product mix, where products come in different sizes, colours and features (differentiated between female and male). For example, under apparel, there are both male and female clothing (jackets, shirts, pants) and within that the products come in many different colours and sizes. Potential Marketing ObjectivesLooking at Adidas’ product range, the company is doing very well in terms of providing footwear, apparel and accessories. However, Adidas could potentially look into providing a larger variety of sporting equipment (i.e. tennis rackets, badminton rackets, footballs, basketballs etc.) as it is a sporting goods company. Also, it is important that Adidas creates a constant stream of innovative and inspiring products as the fashion trends in sport products tend to go out of date rather quickly (i.e. people are constantly wanting to buy new shoes). Adidas should also do this because it creates continuous cash flow for the business which is an advantage to the business as it means that the profit earned from a product in the “maturing” stage of a product life cycle (PLC) can fund for new products introduced at the beginning of a PLC. According to Adidas’ 2011 annual report, the company stated that they should not use mass production or mass marketing, but rather identify and understand consumer’s buying habits, fitness levels and motivations for doing sports. This will help Adidas better understand their consumers and what to sell to them. It is important that Adidas creates an emotion connection between the company and the consumers and one way to do this is to market through social interaction both online and offline.
Works Cited: "Group Strategy Annual Report 2011." Adidas. Adidas Group, n.d. Web. 23 Jan. 2013. <http://adidas-group.corporate-publications.com/2011/gb/en/ group-management-report-our-group/group-strategy.html>. Adidas has taken a more marketing approach in its development of the sports apparel industry. Adidas highlighted in its 2011 annual report that “a profound understanding of the consumer and customer” is essential to achieving their goal. Adidas focused its investments on high-potential markets, in particular China and Russia. The company strives to “fully exploit market opportunities” by presenting their brands to the consumer in the most impactful way. In the sports industry, customers and consumers tend to know what they want (whether it be running shoes, basketball, badminton racket etc.) which makes Adidas more focused on satisfying the needs and wants of the consumer. However, there are instances where Adidas lean towards product-orientation where they invest in their research and development to experiment with new technologies to create a lightweight shoe, or better cushioning for the soles. However, Adidas is mostly market-oriented in that the company focuses on their target market (e.g. basketball players, runners, football players, athletes of various ages etc.).
Works Cited: "Group Strategy Annual Report 2011." Adidas. Adidas Group, n.d. Web. 17 Dec. 2012. <http://adidas-group.corporate-publications.com/2011/gb/en/ group-management-report-our-group/group-strategy.html>. "Adidas Footwear Technology." NordStrom. N.p., n.d. Web. 17 Dec. 2012. <http://shop.nordstrom.com/c/footwear-technology>. Adidas’s mission statement is “to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle.” In this regard, they are very focused on bringing the best and most innovative products to consumers all around the world. Adidas further elaborates on their mission statements as follows:
“We are committed to continuously strengthening our brands and products to improve our competitive position.” “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 organizational structures to match and exceed consumer expectations and to provide them with the highest value.” “We are a global organization that is socially and environmentally responsible, that embraces creativity and diversity and is financially rewarding for our employees and shareholders.” “We are dedicated to consistently delivering outstanding financial results.” Adidas’s mission statements clearly state the purpose of the organization and where the company is in the present. The advantages of the statements are that they are very product and consumer-oriented, meaning that Adidas continuously strive to improve their products, ensuring that they are delivering products of high quality and innovative designs. A disadvantage to these statements is if the company does not produce high quality and aesthetically pleasing products, then they are going against their mission statements. This means that customers may stop buying Adidas products as soon as they realize that they are being cheated by the company. Adidas also addresses the needs of employees and shareholders. This is an advantage because it motivates them to perform better in the workplace. Their mission statements not only communicate Adidas as a strong business in the sporting goods industry, but also demonstrate the group’s corporate social responsibility (CSR) and their strive for excellence. Overall, the role of their mission statements serve to connect the company to produce the best products for the global community. Works Cited: "Our Mission." Adidas Group. Adidas, 6 Aug. 2012. Web. 23 Sept. 2012. <http://www.adidas-group.com/en/ourgroup/values/default.aspx>. Being one of the top companies in the sporting goods industry, Adidas’s objectives help to bring unity and set goals for the company to work towards to be successful. Like many other big companies, the Adidas Group set goals for different departments such as the global operations, global brands and global sales departments. These objectives assist in creating specific strategies and within these strategies, a variety of tactics are established to guide the business to achieving its goals. These objectives also serve as a motivation for employees. For example, Adidas has set up a strategic business plan, also known as “Route 2015” to reach their goal of outperforming total market growth (both GDP and sporting goods market). This plan aims to grow their revenues by 45% to 50% from 2010 to 2015 and achieve a compounded annual earnings growth rate of 15%.
Works Cited: "Strategy." Adidas Group. Adidas, 7 Aug. 2012. Web. 22 Sept. 2012. <http://www.adidas-group.com/en/ourgroup/strategy/default.aspx>. Overall groupGlobal salesGlobal brandsGlobal operationsWorks Cited:
"Annual Report 2011 Global Brands Strategy." Adidas Group. Adidas, Dec. 2011. Web. 22 Sept. 2012. <http://adidas-group.corporate- publications.com/2011/gb/en/group-management-report-our-group/global- brands-strategy.html>. "Annual Report 2011 Global Operations." Adidas Group. Adidas, Dec. 2011. Web. 22 Sept. 2012. <http://adidas-group.corporate- publications.com/2011/gb/en/group-management-report-our- group/global-operations.html>. "Annual Report 2011 Global Sales Strategy." Adidas Group. Adidas, Dec. 2011. Web. 22 Sept. 2012. <http://adidas-group.corporate- publications.com/2011/gb/en/group-management-report-our-group/global- sales-strategy.html>. "Annual Report 2011 Group Strategy." Adidas Group. Adidas, Dec. 2011. Web. 22 Sept. 2012. <http://adidas-group.corporate- publications.com/2011/gb/en/group-management-report-our-group/group- strategy.html>. Why does Adidas support these NPOs?
Adidas engages and provides support for these non-profit organizations to help the less fortunate achieve their goals. It also shows that Adidas is a responsible company because the company takes the initiative to sponsor these organizations. By supporting these NPOs, Adidas is endorsing different worthy social causes, helping to improve the welfare of the workers and eradicate poverty. In August 2011, Adidas joined and committed to support Greenpeace’s goal in the “Detox Campaign” where the company would join Nike and Puma in producing toxic-free products, benefiting and saving the environment. (Read more on article) By doing this, Adidas is not only protecting the environment, but also promoting and encouraging other companies to do the same. Works Cited: Dubsky, Eoin. "Detox Campaign Hat Trick: Adidas joins Nike and Puma." Greenpeace International. Greenpeace, 31 Aug. 2011. Web. 11 Sept. 2012. <http://www.greenpeace.org/international/en/news/Blogs/makingwaves/detox -campaign-hat-trick-adidas-joins-nike-an/blog/36569/>. Among many businesses, the public sector plays a part in Adidas. Adidas openly engages with a number of stakeholders such as the Better Cotton Initiative, the Sustainable Apparel Coalition, the Leather Working Group and the AFIRM Working Group to develop sustainable business approaches. Adidas is also supported by the World Business Council for Sustainable Development (WBCSD), the World Federation of the Sporting Goods Industry (WFSGI), the Fair Factories Clearinghouse (FFC) and the Fair Labor Association (FLA).
For product safety standards, Adidas writes its policies and regulations following the US Consumer Product Safety Improvement Act (CPSIA) and the EU system for Registration, Evaluation and Authorisation and Restriction of Chemicals (REACH). This ensures that the substances used in their products will not cause harm to human health or the environment. It is of significant importance that Adidas have standards for labour rights, health and safety, and environmental protection, incorporating their own and society’s corporate values. These standards are based on the International Labour Organization (ILO) and United Nations practice that relate to human rights and employment practices. There are other public sector businesses such as Nike and Puma who compete with Adidas in the sports apparel and accessories industry. Works Cited: "Annual Report 2011 Sustainability." Adidas-Group. Adidas, 2011. Web. 8 Sept. 2012. <http://adidas-group.corporate-publications.com/2011/gb/en/ group-management-report-our-group/sustainability.html#>. "Government Outreach." Adidas-Group. Adidas, 13 Apr. 2012. Web. 8 Sept. 2012. <http://www.adidas- group.com/en/sustainability/Stakeholders/Engagements/ Government_outreach/default.aspx>. "Product Safety." Adidas-Group. Adidas, 21 Aug. 2012. Web. 8 Sept. 2012. <http://www.adidas-group.com/en/sustainability/Environment/Product_safety/ default.aspx>. Labour
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