Nike vs adidas

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Nike vs adidas

  1. 1. In order to understand the reputation of how brands work, we shall be covering two sports brands and discuss how their marketing strategies and the brand itself have made their name in the market. For this paper, we will be covering and narrating about 'Nike' and 'Adidas'. Nike and Adidas are renowned sportswear brands, who have penetrated, targeted, segmented and positioned their own brands in the minds of customers. Nike although continuous to compete in the global market as the leader in terms of sportswear accessories, Adidas is growing exponentially at the speed of light and gradually coming to the verge of giving Nike a competition. On one hand, Nike owns around Umbro, Hurley, Converse and Cole Haan. While on the other side of the coin, Adidas stands with a variety of brand extensions and acquisitions of Reebok, Taylor made Golf Company and Rockport. Nike was originally found in 1964 by Phillip Knight and Bill Bowerman, as 'Blue-Ribbon Sports'. The name was changed to 'Nike' in 1978 coming from the Greek goddess of victory , which clearly shows its magical impact upon the grounded, yet amazing success of the brand in the market. Nike's headquarters are in OREGON USA
  2. 2. Adidas is much older as compared to it's American Rival, found in 1948 . The name 'Adidas' is based on the name of the founder. Adidas', on the other hand, was framed by the name of the founder Adolf 'Adi' Dassler; the iconic name can act to support the purpose of their products, standing for 'All day, I dream for sport
  3. 3. Nike's symbol, the swoosh was created in 1971 by a woman named Carolyn Davidson. She was working with Phillip Knight, attempting to create a new logo for the company and out of frustration she drew a sloppy check mark on her paper which was later to become the signature of Nike. Adidas has three stripes as their performance logo and a trefoil representing the Adidas Original heritage line of products.
  4. 4. Nike and Adidas are two of the most popular sports equipment companies in the world. Both of their popularity has become so immense that they are literally household names. They pretty much have the same target: people who love sports. Nike is very well known to today's generation because of their countless celebrity sponsorships, but of course, their notoriety does not end there. Their principal target markets are those people into basketball and running, what with their products mainly focused on these two endeavors. Their market used to be solely just domestic (the United States), but in recent years, they have expanded internationally. Their sponsorship on athletes is very prevalent. Adidas' key markets are those people in the following sports: soccer and tennis. They used to have Europe as their sole focus in terms of the market but internationally, they are well known too. This is because of their soccer connection, labeled as the world's sport. Some of the companies under Adidas are Reeboks and Rockport. They also have their share of athlete sponsorships made over the years.
  5. 5. One of the most key aspects of Nike's marketing strategy is sponsoring popular athletes and teams. While Adidas also recognizes the importance of sponsorship, it's not as aggressive in it's approach regarding aposerships as Nike is. Nike's main focus has always been to sponser the most popular athletes and teams. For example, Cristiano Ronaldo , roger fedrer , Rafael Nadal and teams like Manchester United which are extremely popular worldwide, encouraging Nike's sales to go up.
  6. 6. Adidas on the other hand mainly sponsors big events and organisations, for example it's the official sponsor of FIFA, UEFA Champions league and the summer Olympics
  7. 7.  Nike and Adidas have almost similar strategies but different implementation methods. Both 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 recently has adopted Nike’s outsourcin g policy by outsourcing to Asian countries. Nike and Adidas both follow a premium pricing strategy which is a strategy where companies charge a premium price for their products. Their competition is always intense and according to Anderson (2010) during the world cup 2010 Nike launched the popular “write the future”, 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.
  8. 8. In order to become the world’s leading designer, marketer and distributor of athletic footwear, appareland accessories, Nike followed many strategies. their corporate level strategy, according to Dermesropian, Drage, Grigaite and Lopez (2004,p.15) is their focus on innovation and emphasis on their research and development department in order to be profitable in the long run and they do their best to produce footwear, apparel and athletic equipment that reduce or eliminate injury, help in athletic performance and maximize comfort. They continue to expand their operation in the USA, Asia Pacific,Europe, Middle East, Africa and the American regions trying to reach as many customers 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.
  9. 9. The strategies of both these sports giants are very similar but Adidas focuses more the broad differentiation strategy. According to the corporate level strategy of Adidas also focuses on innovation, trying to produce new products, services and processes in order to cope 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 also split into two departments, wholesale and retail. 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. STRATEGIES OF ADIDAS
  10. 10. It 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 will make their position sustainable in the long run. According to Nike’s future plans are to focus on the environment and production of eco friendly products. They mentioned in their 2005 and 2006 Corporate 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 volatile 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 London 2012 Olympic Games. The London Organising committee for the Olympic Games and Paralympic Games (LOGOC) has few regulations which all of its partners are obligated to follow. The see 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. quite
  11. 11. The main element that determines an organisation’s success or failure is the strategy it follows. Any industry is vast and the competition is also fierce and in order to survive in the competition organisations must devise innovative strategies. Nike and Adidas have started their journey decades ago 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 small mistake by Nike, might make them the market challenger and Adidas the market leader. Nike 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 just the product designer, distributor and marketer gave them the competitive edge against Adidas, because their investments were low compared to Adidas as they have production plants, but Nike should be very careful to sustain their market position.

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