'Comparison of strategy of Nike and Adidas Essay\r'

'1.0 Introduction:\r\nJohnson, Scholes and Whittington (2005, p.9) defines dodging as the mien in which an organisation plans to use its resources efficaciously in set up to gain a combative advantage over the desire term. In separatewise words the cautiously planned guidelines that organisation’s fol emit, which differentiates them from other organisations. Mirow (2005,p.10) suggests that prohibitedline of Amazon.com,Inc., a multinational electronic commerce fraternity headquartered in Seattle, center on providing customers with low price, convenience and a gigantic selection of merchandise. They concentrate on this dodging and stupefyed their website in 1995 as an online word of honor retailer. They slowly expanded their products and ar shortly an online shopping website with the largest product supplies online earning r horizontalues in billions. thus we can see how important strategy is for the achievement of an organisation. There ar trinity train s of strategy, which are corporal direct, business aim and running playning(a) level strategy.\r\nStrickland and Thompson (2003, pp.50, 55 and 56) suggests that the corporate level strategy is the strategy which is determines the boilers suit purpose and prospect of an organisation and reflects on how to add value to different split of the organisation. The business level strategy provides guidelines on how to excel competitors or work in a particular commercialiseplace and the functional strategy is the contri hardlyion do by the resources, people and processes to the business and corporate level strategies. Companies strive with their strategies in order to sour the drawing card in their specific persistence or commercialise. Nike and Adidas are the top ii competitors in the plunk gull, turn and accessories segment of the textile industry. The center of the latter part of this bill is on how these competitors compete with each other employ their strategies. \r\n2.0 Literature re view:\r\nIn order to fully understand rough strategy, it is mandatory to k resembling a shot about the louvrer generic wine competitive strategies. The five generic strategies check to Strickland and Thompson (2003, p.150) are low- terms supplier strategy, in which the organisation provides goods or assistant at a low cost, commodious differentiation strategy, in which the organisation differentiates its products or run making it appeal to a vast ramble of customers, trounce-cost supplier strategy, in which the organisation provides goods or services of extravagantly quality making it worth the add together they are charging which is set about than their competitors, a focused strategy based on lower cost, in which the organisations focus on a narrower buyer segment and provides them their goods or services at a lower cost than its competitors and focused strategy based on differentiation, in which the organisation focuses on a narrower buyer s egment and pass waters product customized check to their needs.\r\n3.0 Backgrounds of Nike and Adidas:\r\n[IMAGE universal resource locator: http://digesting endeavor.wordpress.com/tag/nike/]\r\n3.1 Company overview of Nike\r\nharmonize to (www.nikebiz.com) NIKE,Inc. was founded in 1972 by Phil Knight and dick Bowerman. It plans, markets and distri andes gymnastic foot expose, apparel, equipment and accessories for a vast range of sports and fitness activities and are currently the universe’s ternarying partnership in the athletic footwear, apparel and accessories segment in the textile industry. It is based in Beaverton,Oregon and has subsidiaries much(prenominal)(prenominal) as Cole Haan, which designs, markets and distri only whenes luxury items much(prenominal) as billet, handbags and coats. Their subsidiaries likewise include Converse,Inc. and Hurley supranational LLC and Umbro,Ltd. The revenue of Nike,Inc. as at may 2010 is close US$ 19014 million harm onise to (www.biz.yahoo.com).\r\n[IMAGE uniform resource locator: http://www. association footb on the wholecleats101.com/2009/10/07/adidas-predator-x-get-ready/]\r\n3.2 Company overview of Adidas theme:\r\nharmonize to (www.adidas- group.com) Adidas, founded in 1949 by Adofl Dassler, is a sports apparel manufacturing company. thaumaturgeting with athletic footwear much(prenominal) as running fit outs and soccer piazza, they currently manufacture a wide range of products such as bags, watches, shirts and accessories. They are the second largest athletic wear manufacturer, substructure Nike,Inc. Adidas crowd is made up of trine companies, Reebok, TaylorMade Adidas Golf company and Rockport. The revenue of Adidas as at May 2010 is 14878 US$ one thousand million according to (www.biz.yahoo.com).\r\n4.0 minute Incidents that occurred in the bygone:\r\n4.1 Critical incidents that affected Nike:\r\nNike, Inc. had gone by motley incidents which had an impact on their success . match to Dermesropian, Drage, Grigaite and Lopez (2004,p.3) in 1972, Nike persuaded marathon runners at majestic Tracks to wear their post which was an modernistic strategy as it resulted in inexpugnable advertizement when some of the runners were the top finishers and popularity of Nike continued to set out throughout the 70s. In 1979 Nike had 50% of the US running shoe market. In 1988 Nike introduced their historied slogan ‘Just do it’ and acquired a company c all in all in alled Cole Haan. They sponsored many noted athletes such as Michael Jordan, a outlying(prenominal)-famed basket testis pretender and Tiger woodwind instrument, an splendid young golf player. During 1992 Nike acquired Canstar sports which included the field hockey equipment get alongr Bauer and opened its root Niketown inventory. In early 1995 Nike acquired a demonstrate to jell its logo on NFL uniforms which resulted in strong marketing.\r\n behavior Jordan [IMAGE universal re source locator: http://www.myair apparel.com/air-jordans/air-jordan-xx3- formalisedly-unveiled.html] They launched a brisk brand called Jordan, in 1997, which was influenced by the historied basketball player Michael Jordan and one of the intimately famous shoes of that brand were called Air Jordan. Some incidents harmed Nike during 1998 as they had to cut 1,200 jobs out-of-pocket to the fall of gross sales in Asia and the entreat of athletic shoes fell in 1999. Nike wanted to diversify and in the division 2000 they shifted a little towards the technological and electronic sector and introduced athletic electronics, which included MP3 players, partiality monitors, and two-way radios.\r\nProducts of Nike in the BCG matrix [IMAGE uniform resource locator: http://www.robmillard.com/archives/BCG%20Matrix%20Big1.html] They opened their first Nikegoddess store in California in 2001. They acquired Hurley world-wide, a distri furtheror of action sports apparels and lost their lic ense to put their logos on NFL uniforms to Reebok in 2002. In 2003 they acquired one of their competitors called Converse notwithstanding it continued to operate independently in order to sustain the brands popular name.\r\n4.2 Critical incidents that affected Adidas:\r\nAdidas likewise faced various occurrences in order to attain the agnomen of the second largest athletic footwear sportswear and accessories manufacturer. Adidas Samba [IMAGE uniform resource locator:http://www. outgoshoesmen.com/adidas.Men.Samba.Classic.Soccer.Shoe/detail.html]\r\nAccording to (www.adidas-group.com) Adidas registered as a company in 1949 with the leash stripes logo as their trademark. (www.footballshirtculture.com) explains that in the course 1950 they produced the â€Å"Samba” all-round soccer shoes which are even now considered to be the best classic dressing shoe today. whizz of the biggest successes of Adidas was in 1952 when it was the nigh common shoe brand languid at the Oly mpic Games held in Helsinki. They made the first track shoes with extractable spikes. Emil Zatopek, in Adidas shoes, won lead specious medals in one week creating a huge impact on the ensure of the brand.\r\nGerman National Team beget on Adidas in the 1954 football institution instill [IMAGE URL: http://soccernet.espn.go.com/ arena- form/feature?id=696762&cc=4716&ver= spheric] In 1954 Adidas became famous all over the world as the German national team was victorious in the football world form for the first time, wearing Adidas shoes with screw-in spikes. In 1955 Adidas came up a shoe with exchangeable spikes which became actually popular among the high jumpers. In 1964 nightstick Mills won the men’s 10,000 meters wearing the impertinently Adidas shoe which was considered the lightest shoe weighing 135 grams. In 1969 Adidas produced the world’s first injection form multi stud soles of polyurethane, which gave a one socio-economic class guarantee on the soles. Adidas began merchandise of balls in 1961 and in 1970 their football was the official ball of the football world form. In 1971 the famous ‘Fight of the century’ where Muhammad Ali and Joe Frazier fought with each other, twain of them wore special boxing shoes intentional by Adidas.\r\nProducts of Adidas in the BCG Matrix [IMAGE URL: http://www.robmillard.com/archives/BCG%20Matrix%20Big1.html]\r\nAdidas Copa Mundial [IMAGE URL: http://www.footballbootroom.com/Adidas-Copa-Mundial] In 1979, Adidas produced ‘Copa Mundial’, which even today is still the world’s best selling soccer shoe. In 1986 Adidas introduced Azteca, the first synthetic world cup matchball in the world. However, in 1993 Adidas took over Sports Inc., a US based sports marketing company and Adidas was loosing US$ cytosine million a year. Robert Louis Dreyfus had cash in ones chips the new president of Adidas and he downsized the German staff and went subcontracting to China. Adidas once had 70% market contend in the US and it fell to 2% in 1993. In 1994 Adidas made a comeback by producing the revolutionary soccer shoe called the piranha during the soccer world cup in the USA. They went public in 1995 and acquired the Salmon assembly which consisted of the brands TaylorMade, Mavic and Bonfire in 1997. The new company is named Adidas-Salmon AG. They were the first sporting goods company to elect as the official sponsor of a soccer world cup in 1998 when they sponsored the 1998 FIFA sphere cup in France.\r\nAdidas marauder dementia [IMAGE URL: http://www.produktenews.ch/newsflashartikel.cfm?key=179710] In March 2002 Adidas launched ClimaCool a footwear with a ventilation system and introduced the new caribe Mania boots and jerseys with the dynamic layering concept in the 2002 FIFA world cup with their own official ball called the Fevernova. They sold over 6 million footballs and much(prenominal) than 1.5 million jerseys and half a million of the Predator Mania that year. In 2006 Adidas became the official partner, supplier and licensee for the FIFA world cup to be held in 2006, 2010 and 2014. They acquired Reebok International in the same year. 5.0 affinity of the strategies of the companies:\r\n5.1 Strategies of Nike:\r\nIn order to become the world’s leading designer, marketer and distributor of athletic footwear, apparel and accessories, Nike arriveed many strategies. Their corporate level strategy, according to Dermesropian, Drage, Grigaite and Lopez (2004,p.15) is their focus on vicissitude and emphasis on their research and discipline department in order to be profitable in the foresightful run and they do their best to produce footwear, apparel and athletic equipment that fell or pass away injury, help in athletic death penalty and maximize comfort. They continue to expand their transaction in the USA, Asia Pacific, Europe, Middle East, Africa and the American regions move to reach as many cus tomers as possible. Their business level strategy is a combination of the best cost provider and broad differentiation strategy, but more emphasis is put on the best cost provider strategy. They rely firmly on strategic outsourcing and most of their products are manufactured outside the United States.\r\nOne of the primary(prenominal) reasons stooge their success then(prenominal)ime the cost leadership strategy is their lengthy net arrive at structure that allows them to cancel their bail bond with any company that fails to maintain their standards. They work real closely with their suppliers which allow them to produce their goods at a very low price and of superior quality with the newest engine room which makes them the market leader and the rest agree to try producing same goods close to their standard in order to survive in the market. They work very hard in their marketing strategies and which one of the primary reasons behind its success.\r\nFig.1Fig.2Fig.3\r\nP layers who wear Nike â€\r\nFig.1) Cristiano Ronaldo [IMAGE URL: http://s702.photobucket.com/albums/ww24/bleedingblue97/?action=view¤t=Cristiano_Ronaldo_Manchester_United.jpg&newest=1 Fig.2) Michael Jordan [IMAGE URL: http://www.ionlinephilippines.com/2009/12/michael-jordan-look-alike-michael-jordan-imposter-video/] Fig.3) Tiger Woods [IMAGE URL: http://www.dailyworldbuzz.com/tiger-woods-still-has-support-of-nike-gatorade-and-gillette/4970/] Nike hired famous basketball player Michael Jordan, tennis player Serena Williams and Tiger Woods who signed a seven year contract in order to be the spokesperson of Nike. In 2003 they spent around US$ 32.4 million on net income TV commercializeds and another US$ 39.8 for powder magazine ads. In order to become the market leader one has to follow a rigid and innovative strategy but to remain as the market leader the strategy has to be sustainable.\r\nAccording to (www.bizjournals.com) on a report published by Nike, suggest that they generate planned five major programs in order to appreciation their corporate level strategy sustainable. In order to sustain in the long run Nike is now emphasizing more on the concerns about global warming. They have decided to focus more on their product design process, eliminating toxics and wastes wherever possible, start a GreenXchange web marketplace to share intellectual property which have been designed to act as a accelerator in green development, get to a lean manufacturing and tender-hearted resource steering in order to acquire a more equitable supply chain, establish a social program which combines tuition and sports programs for the third world countries and establish a new group call the worry for Innovative Climate and Energy Policy.\r\n5.2 Strategies of Adidas:\r\nThe strategies of both(prenominal) these sports giants are very similar but Adidas focuses more the broad differentiation strategy. According to (www.adidas-group.com) the corporate level strateg y of Adidas overly focuses on innovation, trying to produce new products, services and processes in order to hump up with the competition. In 2009 the 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 were responsible for commercial activities and a global brands function which were responsible for the marketing of both brands. The global sales function was similarly split into two departments, 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 underline and work hard in their several(prenominal) departments in order to make the most of their efforts. This led to the elimination of regional military headquarters and moved towards more direct conversation between the local marke ts and the global functions.\r\nThey employ 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 helped them to keep a unique identity and concentrate on their core competencies. Adidas focused their investments in the best marketing and distribution channels in different countries by critically evaluating the consumer get behaviors and their constant struggle to secure immemorial shelf space. They have also embraced e-commerce in order to become more high-octane and appeal to more customers and make get much more easily kind for them. Their supply chain is closely communicated and accordingly 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.\r\nThis culture forces them to produce goods which are highly innovative and with the use of the a la mode(p) engineering s cience their products have a very good quality. According to (ar2001.adidas-salomon.com) using modish technologies they produce products which enhances performances of players and they focus on sports such as football, tennis, basketball and even fostering shoes which are used by anyone with the ability to run. Their new technologies have lead to the production of Climacool, a shoe with a ventilation system and a­3 a shoe with an energy attention system that guides and drives an athlete’s foot through each stride.\r\nFig.4Fig.5Fig.6\r\nFamous players who wear Adidas â€\r\nFig.4) Zinedine Zidane [IMAGE URL: http://s670.photobucket.com/albums/vv70/tomdavies99/?action=view¤t=09_zinedine_zidane_dpa_300.jpg&newest=1] Fig.5) Kaka [IMAGE URL: http://soccerpitch.co.za/tag/real-madrid/] Fig.6) Kobe Bryant [IMAGE URL: http://family-fitness.mattters.com/2010/7/2/couldnt-wait]\r\nAdidas Trefoil logo [IMAGE URL: http://free-extras.com/images/adidas_logo-658.htm] Adidas ha s world class players who wear their products such as Zinedine Zidane of France, Alessandro Del Piero of Italy and Kobe Bryant an NBA champion who is a style icon for basketball lovers. They also concentrate on their classic items, acquaint and redesign them under their Trefoil logo.\r\n5.3 Comparison of the strategies of Nike and Adidas:\r\nAccording to (http://comparisonz.com) Nike and Adidas have almost similar strategies but different implementation methods. twain the companies concentrate heavily on technology and strive to produce new and innovative products. Nike focuses on the American markets whereas Adidas focuses on the European market. Nike does not have any production plants as they only design, distribute and market their products and hence they outsource to various countries in Asia, mainly Taiwan and Korea, which outsource their production to China, Indonesia and Vietnam. Adidas on the other hand, carry out all their production in Germany and of late has adopted N ike’s outsourcing policy by outsourcing to Asian countries.\r\nNike and Adidas both follow a premium pricing strategy which according to Kotler (2003, p.272) is a strategy where companies charge a premium price for their products. Their competition is endlessly intense and according to Anderson (2010) during the world cup 2010 Nike launched the popular â€Å"write the hereafter”, three minute advertisement featuring world cup stars which was a major hit on Youtube and Adidas replied with their two minute video with celebrities like Snoop Dogg and Daft Punk into a famous scene from the movie Star Wars. Nike sponsored nine teams whereas Adidas sponsored 12 teams.\r\nWorld’s Largest LED by Nike [IMAGE URL: http://johannesburgbc.ning.com/profiles/blogs/nikefootball-delivers-the]\r\n fifty-fifty though Adidas was the official sponsor of the World cup 2010, Nike attached an LED showing to a 30 story skyscraper in Johannesburg where soccer fans could write short mes sages using popular social networking websites such as Twitter and Facebook and Nike put up 100 messages on the side of the walls every night.\r\nAdidas adiPURE terce Nike Tiempo Elite\r\n[IMAGE URL: http://soccerlens.com/shirts/nike-vs-adidas-buying-football-shoes-in-2010/6410/] Umair (2010) compares the constant emulation between Nike and Adidas using their products. During the world cup Nike launched an Elite series for the 2010 world cup called Nike Tiempo Legend Elite which had customized shoes fatigued by famous football players such as Christiano Ronaldo and Cesc Fabregas. Adidas on the other hand, launched a new collection called Adidas Adipure for the world cup 2010 which also had customized shoes feeble by famous players such as Kaka and Lionel Messi. In soccer Adidas shoes are worn by famous players such as Zinedine Zidane, Kaka and Lionel Messi, whereas Nike shoes are worn by Christiano Ronaldo, Wayne Rooney and the original Ronaldo. In basketball Nike shoes have bee n used by Michael Jordan and Adidas shoes have been worn by Kobe Bryant. 6.0 future tense Plans of Nike and Adidas:\r\nIt is easy to become the market leader or the market challenger for organisations but sustainability is the primary concern and hence organisations focus of the sustainability by coming up with strategies that forget make their position sustainable in the long run. According to (www. surroundingsalleader.com) Nike’s future plans are to focus on the environment and production of eco friendly products. They mentioned in their 2005 and 2006 bodily Responsibility Report that they will become carbon neutral by 2011 by reducing their Caron Dioxide emissions. They have decided to design all Nike brand footwear in ways through which they can reduce waste production during product design and packaging. They will eliminate the use of fickle organic compounds and use more environmental friendly material in their products and be carbon neutral by 2011. Adidas on the other hand became the official sportswear partner of the capital of the United Kingdom 2012 Olympic Games.\r\nThe London Organising committee for the Olympic Games and Paralympic Games (LOGOC) has few regulations which all of its partners are obligated to follow. These obligations are focused towards the environment. Adidas, being a partner of LOGOC has to follow all these regulations as their future plans are to be the official sponsor of almost all major events in the world, and in order to achieve this goal their strategy is to produce environment friendly goods as well. They have to ensure that all their products are produced with environment friendly materials, which would protect the human health and the environment and their packaging should also be produced with materials that can be recycled. whence we can see that both the future plans of Nike and Adidas are quite similar.\r\n7.0 Conclusion:\r\nThe main element that determines an organisation’s success or failure is the strategy it follows. whatever industry is vast and the competition is also fierce and in order to survive in the competition organisations must work innovative strategies. Nike and Adidas have started their journey decades agone and they have struggled but sustained their positions; Nike as the market leader and Adidas as the market challenger. Various incidents have occurred in the past to both the companies which were both good and bad, but it was the strategies that helped them survive and sustain their positions. The strategies of both these companies are quite similar and Adidas is not far behind from Nike, but any minute mistake by Nike, might make them the market challenger and Adidas the market leader.\r\nNike has to be very careful while implementing their strategies because Adidas is very close to becoming the market leader. Nike’s initial strategy of being unspoilt the product designer, distributor and marketer gave them the competitive edge against Adid as, because their investments were low compared to Adidas as they have production plants, but Nike should be very careful to sustain their market position.\r\n8.0 careen of references:\r\nBooks:\r\nJohnson,G., Scholes,K. and Whittington,R.(2005) Exploring Corporate Strategy: Text and Cases. seventh Edition. Prentice Hall. Thompson,A.A., and Strickland,A,J.(2003) Strategic Management fancy and cases. 13th edition. McGraw Hills. Kotler,P. ( 2003)Marketing Management, Eleventh Edition, Pearson Education.\r\nWebsites:\r\n(2010) NIKE, Inc. Company Profile, [URL:http://biz.yahoo.com/ic/14/14254.html] (accessed: 29 magisterial 2010) (2009) Adidas Group History, [URL:http://www.adidas-group.com/en/ourgroup/history/history.aspx] (accessed: 29 princely 2010) (2010) Nikebiz: Company Overview, [URL:http://www.nikebiz.com/company_overview]/ (accessed: 29 horrible 2010) (2010) Adidas AG Company Profile, [URL:http://biz.yahoo.com/ic/92/92632.html] (accessed: 29 August 2010) (2010) The histor y of Adidas, [URL:http://www.footballshirtculture.com/2006102796/history/adidas-football-shirt-history.html] (accessed: 29 August 2010) (2010) Strategy, [URL:http://www.adidas-group.com/en/ourgroup/strategy] (accessed: 29 August 2010)/ Strategy: Adidas, [URL:http://ar2001.adidas-salomon.com/adidassalomon2001/strat_adidas/] (accessed: 29 August 2010) (2010) Nike vs. Adidas †study Side by Side, [URL:http://comparisonz.com/comparisons/100305/nike-vs-adidas]/ (accessed: 29 August 2010) (2009) Adidas: 2009 Sustainability review, [URL:http://ser2009.adidas-group.com/suppliers/3_4.html] (accessed: 29 August 2010)\r\nArticles:\r\n(2010) Nike plans to be coke neutral by 2011, [URL:http://www.environmentalleader.com/2007/05/31/nike-plans-to-be-carbon-neutral-by-2011] (accessed: 29 August 2010) Umair,A.(2010) Nike vs Adidas †Buying football shoes in 2010,\r\n'