mi adidasMass Customization Initiative
mi adidasAkramAnasMohamed KMohamed AKarimYoussef         Dr. Ingy
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
The Case Synopsis• This case is about mi adidas.• We are talking about an industry in the field of sports  wears and sport...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
History of adidas• In 1920, it all began when Adolph Dassler “adidas” and    his brother Rudolph made their first shoes in...
1920 adidas Shoe
History of adidas (Con’t)• In 1972 Nike entered the American market targeting  teenagers, Reebok followed in 1979.• Adidas...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
What is mi adidas?mi adidas store in Chanzelize
• Video removed due to large size
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
Case ProblemIn 2001mi adidas had three alternative routes to choose from :1. Withdraw : celebrate the success but quietly ...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
Phase I : The mi adidas Pilot• The objectives• Offer a customized product• Test consumers’ demands• Fulfill the consumers’...
Phase 1 AnalysisMi adidas started the phase 1 project.1. The project start with small pilot ( 300 pairs )2. Product Select...
Phase II Analysis• Phase 2• Mi adidas strategy for growth for the Soccer footwear  for (2001)1. Mi adidas increase the cur...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
mi adidas SWOT analysis
Strengths- Good brand reputation in the sports goods market.- mi adidas sales of soccer footwear increased by 1600%    bet...
Weaknesses- Adidas is in the second place of the world footwear  Market.- Not enough capabilities to deal with issues pres...
Opportunities- World cup competition in Japan 2002- 7 major marathons (April – October 2002)- Acquisition of rebook to com...
Threats- Several Competitors offer similar service.- Most of adidas income comes from the selling of its    products to re...
Adidas Divisions        Forever Sport (largest division)            Were mi adidas is located.                   Originals...
mi adidas in adidas’s BCG• mi adidas considered to be a question mark in adidas’s  BCG because market growing but sales st...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
Global Footwear Market                  Total Footwear Market in Billion €                     €1.3           €2.0        ...
Global Footwear Market   60% of the total footwear market is controlled by
Global Footwear Market                 Adidas footwear sales in 2001            North america   Europe   Asia     Latin Am...
Global Footwear Market            Nike footwear sales in 2001           USA    Europe   Asia   Latin America  €3,209      ...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
Phase III &Mass Customization Rollout Plan            IV             Permanent MC           Quick response                ...
Phase III & IV• Phase 3Mi adidas strategy for growth for the Soccer footwear  for (2002)1. Mi adidas increase the current...
Phase III & IV• Phase 3Mi adidas strategy for growth for the Basketball footwear      for (2002)1. Mi adidas provided a n...
Phase III & IV• Phase 4Mi adidas strategy for growth for the Soccer footwear    for (2003)Mi adidas maintain the develope...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
Question• In this case the problem that adidas will be facing is the extremely high cost of inventory in addition to the h...
Considering the threealternatives, Withdraw, Maintain &ExpandWithdraw•   The first option of withdrawing will mean that al...
Considering the threealternatives, Withdraw, Maintain & ExpandExpand•   A demand for customized footwear exists.•   No big...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
Recommendations•   Using the existing production facilities or with minimal    changes to them.•   Nike’s footwear sales a...
Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT a...
mi adidas 2011• mi adidas expanded to cover eight categories for both  men and women (Soccer, Running, Tennis, Basket  bal...
Video• Video removed due to large size
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The "mi adidas" Mass Customization Initiative

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Case Study: The "mi adidas" Mass Customization Initiative - Submitted as a partial requirement for the fulfillment of Introduction to Marketing course - MBA Degree - The German University in Cairo - Spring 2011

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The "mi adidas" Mass Customization Initiative

  1. 1. mi adidasMass Customization Initiative
  2. 2. mi adidasAkramAnasMohamed KMohamed AKarimYoussef Dr. Ingy
  3. 3. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives.• Recommendations.• Current situation of mi adidas.• References List.
  4. 4. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  5. 5. The Case Synopsis• This case is about mi adidas.• We are talking about an industry in the field of sports wears and sports equipment.• Discussing a product offered by mass customization.• mi adidas is in the middle of a plan after executing the first half of it.• We are here to help them to make the proper decision based on the study we made.
  6. 6. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  7. 7. History of adidas• In 1920, it all began when Adolph Dassler “adidas” and his brother Rudolph made their first shoes in a small village in south Germany using basic material available after World War I.• Their idea was to provide every athlete with the best possible equipment.• Jesse Owens was the first agreed to wear their shoes and he won 4 gold medals in Berlin Olympics.• In 1948 the two brothers quarreled, Rudolph left to establish Puma and Adolph to register Adidas.• 1954 Germany won the world cup wearing new screw studs on adidas soccer shoes.
  8. 8. 1920 adidas Shoe
  9. 9. History of adidas (Con’t)• In 1972 Nike entered the American market targeting teenagers, Reebok followed in 1979.• Adidas struggled through the high pace of competition as the aggressive competition in industry is getting higher.• In 1989 the Dassler family withdrew from the company and transformed into a corporation.• Through 1989 and 1998 adidas has been acquired and sold 3 times till 2000 when Herbert Hainer took over as a chairman and CEO of adidas and Rolf Reinschmidt as a head of Forever Sport Division.
  10. 10. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  11. 11. What is mi adidas?mi adidas store in Chanzelize
  12. 12. • Video removed due to large size
  13. 13. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  14. 14. Case ProblemIn 2001mi adidas had three alternative routes to choose from :1. Withdraw : celebrate the success but quietly withdraw from MC in order to focus on adidas’ core business.2. Maintain : Maintain the developed capabilities and planned retail tours following top events such as the Soccer World Cup and marathon series i.e. ( maintain the product categories {soccer , running}footwear without any intend to expand in product)3. Expand : Expand to multiple product categories and new markets
  15. 15. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  16. 16. Phase I : The mi adidas Pilot• The objectives• Offer a customized product• Test consumers’ demands• Fulfill the consumers’ expectation• The mi Adidas Strategy1-Attract new customer by promising superior value( our experience)
  17. 17. Phase 1 AnalysisMi adidas started the phase 1 project.1. The project start with small pilot ( 300 pairs )2. Product Selection “ mi adidas” select soccer footwear to perform the pilot on.3. Market Segmentation “ mi adidas” segment the market geographically by select six countries interested in the selected product ( Germany , France , England , Spain , Italy and the Netherland )3. Period 100 % event based. Over a two-month period in 2000
  18. 18. Phase II Analysis• Phase 2• Mi adidas strategy for growth for the Soccer footwear for (2001)1. Mi adidas increase the current product mass in the same market “market penetration”2. Mi adidas targeted a new market ( US) by the current product “market Development”• Mi adidas strategy for growth for the running footwear for (2001)1. Mi adidas provided a new product ( running footwear) in new market (Berlin Marathon) “market Diversification”
  19. 19. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  20. 20. mi adidas SWOT analysis
  21. 21. Strengths- Good brand reputation in the sports goods market.- mi adidas sales of soccer footwear increased by 1600% between phase 1 & 2.- High level of customization details- Able to handle the complexity of the process.- Large mass production facilities.- Strong Market channels and Distribution Capabilities- Better lead time with two weeks.- Adidas expanded to compete in the running sports market after phase 1.
  22. 22. Weaknesses- Adidas is in the second place of the world footwear Market.- Not enough capabilities to deal with issues presented.- Delays due to Workers lack of training and language capability and expertise to handle MC on a larger scale.
  23. 23. Opportunities- World cup competition in Japan 2002- 7 major marathons (April – October 2002)- Acquisition of rebook to compete with Nike.- Slogan of “Impossible is nothing”- The ability to have the most recent fashion customized.- Athletics foot wear market was characterize by rapid product turnover.- 100% of the consumers in phase 1 want customization service available in the future.
  24. 24. Threats- Several Competitors offer similar service.- Most of adidas income comes from the selling of its products to retailers.- Nike has a large global market and a large acceptance of their product all over the globe than adidas.- Adidas has a growing market share, but it remains to be seen whether it will grow at the cost of Nike, or other lesser brands.
  25. 25. Adidas Divisions Forever Sport (largest division) Were mi adidas is located. Originals Equipment
  26. 26. mi adidas in adidas’s BCG• mi adidas considered to be a question mark in adidas’s BCG because market growing but sales still low with respect to other products.• To pull mi adidas towards a star. Question Star Mark Cash Dog Cow
  27. 27. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  28. 28. Global Footwear Market Total Footwear Market in Billion € €1.3 €2.0 €7.9 North America Europe €5.2 Asia-Pacific Rest of the worldTotal market = €16.4 billion
  29. 29. Global Footwear Market 60% of the total footwear market is controlled by
  30. 30. Global Footwear Market Adidas footwear sales in 2001 North america Europe Asia Latin America €1,200 €971 €818 €122 North america Europe Asia Latin America
  31. 31. Global Footwear Market Nike footwear sales in 2001 USA Europe Asia Latin America €3,209 €1,423 €632 €360 USA Europe Asia Latin America
  32. 32. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  33. 33. Phase III &Mass Customization Rollout Plan IV Permanent MC Quick response Permanent MCPhase 4 units in adidas stores SMUs 4,000 pairs unit and selected via specially 2003 in Tolland Garros specially retailers retailers Precision "VI" Premium Supernova (RX) 20,000 pairs 100 pairs BarricadePhase 3 Retail / 1,400 pairs Direct 500 pairs Direct 2002 Retail Partners Events/Promo 8 US College Roland Garros 7 major Marathons and Japan Teams May - Jun Apr -Oct all Year Sept - Oct Predator Precision Boston Supernova 5,000 pairs 200 pairsPhase 2 Retail/Events/Promo Retail Partners and US Berlin Marathon 2001 Sept Retail (Jun - Aug) Events (all years) Predator PrecisionPhase 1 300 pairs 2000 Direct Trail UK/D/S/F/I/NL Soccer Running Basketball Tennis
  34. 34. Phase III & IV• Phase 3Mi adidas strategy for growth for the Soccer footwear for (2002)1. Mi adidas increase the current product mass in the same market “market penetration”2. Mi adidas targeted a new market ( japan) by the current product “market Development” * Japan ( Make full use of the soccer world cup event )Mi adidas strategy for growth for the running footwear for (2002)1. Mi adidas targeted a new market (7 major Marathons) “market Development”
  35. 35. Phase III & IV• Phase 3Mi adidas strategy for growth for the Basketball footwear for (2002)1. Mi adidas provided a new product (Basketball footwear) in a current market (US) “product Development”2. “ mi adidas” segment the marketI. geographically by select USII. By age by select the university students. Mi adidas strategy for growth for the Tennis footwear for (2002)1. Mi adidas provided a new product ( Tennis footwear) in a current market (Paris) “product Development”
  36. 36. Phase III & IV• Phase 4Mi adidas strategy for growth for the Soccer footwear for (2003)Mi adidas maintain the developed market and selected speciallyretailers Mi adidas strategy for growth for the Basketball footwear for (2003)Mi adidas Expand the developed market in US in order to meet theincreasing demand Mi adidas strategy for growth for the Tennis footwear for (2003)Mi adidas maintain the developed market in Roland Garros
  37. 37. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  38. 38. Question• In this case the problem that adidas will be facing is the extremely high cost of inventory in addition to the high production cost.The question is:Does the added value for the service cover these additionalcosts? Will the price be ideal for Adidas to keep its goodreputation?
  39. 39. Considering the threealternatives, Withdraw, Maintain &ExpandWithdraw• The first option of withdrawing will mean that all the effort was almost for nothing.• Competitors can take advantage of a lucrative market devoid of competitors.Maintain• Customization of products has already become a trend.• mi adidas has created a good energy for the business and customization capabilities could be integrated into existing functions.• Even though a huge demand of customized products exist in the market, there are limited resources and capabilities to handle large volume of customized goods.
  40. 40. Considering the threealternatives, Withdraw, Maintain & ExpandExpand• A demand for customized footwear exists.• No big contenders (yet) for this market space.• A controlled expansion can reduce risks. This can be attained by limiting the amount of customization. As capabilities and competences improve the level of customization can be increased• The problems that mi adidas face right now can only be fixed by allocating more resources to deal with those issues and the resources can be obtained only by expansion.
  41. 41. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  42. 42. Recommendations• Using the existing production facilities or with minimal changes to them.• Nike’s footwear sales are increasing so Adidas needs to take a step forward and do something different in order to keep the customers interested.• Adidas should make plans of entering into other segments of service business like customized sports goods and sports wear• Problems with retailers can be avoided by first expanding to Adidas own retail stores. After all major issues have been solved, the service can be further expanded to other retailers.• As for products, adidas should lead customers taste in a certain level.
  43. 43. Road Map• The case synopsis.• History of adidas.• What is mi adidas?• Case problem.• Phase 1 – Phase 2 (executed).• SWOT analysis.• Global Footwear market & Competition.• Phase 3 – Phase 4.• The three alternatives• Recommendations.• Current situation of mi adidas.• References List.
  44. 44. mi adidas 2011• mi adidas expanded to cover eight categories for both men and women (Soccer, Running, Tennis, Basket ball, Golf, Casual, Outdoor & Training)• mi adidas allows you to customize your shoe through the web site without any campaigns or face to face contact. Choose your model Choose your gender Choose your size Start customizing
  45. 45. Video• Video removed due to large size
  46. 46. Questions ?
  47. 47. Thank you
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