Adidas, based in Germany, is the biggest sportswear producer in Europe and
comes in second worldwide after Nike. The brand designs and manufactures
footwear, clothing and accessories.
Adidas' global slogan, "Impossible is Nothing," is an aspirational message that
encourages consumers to push their limits and achieve their goals.
Knowing About the CEO of Adidas
Bjørn Gulden is a businessman and a former professional football player. He
was earlier CEO of Puma and Pandora. He was named one of the
Fortune Businesspersons of the Year in 2019.
Knowing About the CFO of Adidas
Harm Ohlmeyer started with Adidas in 1998 and has gained in-depth experience
in Finance and Sales, including responsibility as CFO of TaylorMade-Adidas,
He has been with Adidas for several years, holding various positions within the
company.
Knowing about Adidas India Head
Neelendra Singh, currently the Managing Director and General Manager at
Adidas IN, has over two decades of experience with the company. He has also
served in various roles such as vice president for retail and franchise, at Adidas,
and group retail director in South Korea.
Revenue (in millions)
Years Revenue
2021 21,234€
2022 22,511€
2023 21,428€
We can conclude from the table above that Adidas has been consistent in sales
for the last 3years because price sensitivity is a major factor for consumers,
especially in India and this brand does this by offering a range of products at
various price points.
Profit (in billions)
Years Profit
2021 10.76 €
2022 10.64 €
2023 10.18 €
As there have been consistent sales worldwide profit also has been consistent in
the last 3 years, we can give a beautiful example of this consistency The Indian
climate is hot throughout most of the year this brand addresses this by
prioritizing functionality and comfort in their product design.
Talking about the Market Size, Volume, and CAGR of Adidas
The global sportswear market, which includes footwear, apparel and
accessories, was valued at more than $250 billion last year. Adidas is one of the
major players having competition with Puma and Nike.
Market share
Adidas has the second-largest market share in the global sportswear market
contributing around 8.2% share in the market. This share reflects its strong
position in the global sportswear industry with truckloads of consumer base.
We have seen consistent growth of Adidas in the last 3 years from the revenue
and profit table. The brand’s CAGR is around 9.9% for the upcoming 5 -10
years down the line. This compounded growth will be supported by new product
innovation, climate change and expansion to new developing markets.
New Initiatives
In 2015, Adidas partnered with Parley for the Oceans and started manufacturing
footwear and apparel made from recycled ocean plastic. The brand took the
initiative by converting plastic waste into high-quality sportswear. Recently
Adidas announced its commitment to using 100% Parley plastic in its polyester
products.
Adidas has made a goal to reduce its greenhouse gases in supply chain by 30%
by 2028 this will help in the efficient use of energy use in the production
process.
Adidas has been a leader in the 3D-printed footwear with its Futurecraft series.
This 3D series of shoes features sneakers and midsoles with some digital lights
allowing better control over the cushioning level.
Adidas invests in community programs that celebrate sports and physical
activity for the youth. They partner with various sports competitions, marathons
and national games to promote higher participation in sports activities and
provide new opportunities to participants.
Best Practices
Adidas enables customers to personalize their footwear and clothes. They give
choices in colours, design and personalised text editing so this further enhances
the satisfaction of customers.
Adidas uses social media platforms to interact with customers, promote new
products, and tell stories about the company. This includes interactive
campaigns to create loyal customers.
Adidas Creators Club Loyalty Program- under this loyalty program rewards are
given to customers for their engagement and purchasing through this customers
earn various offers, and get access to newly released products that make
interaction with the brand more loyal.
Adidas utilizes best practices in terms of supply chain management techniques
to ensure that there is efficiency and responsiveness. They always tend to
optimize logistics and try to improve their inventory management to attain
better supply chain processes.
Sustainability and CSR Practices
Adidas aims to reduce water usage in its production processes. Hence, Adidas
has taken several measures to minimize the consumption of water during the
manufacturing process and also promote the best practices regarding water
management. It researches and implements waterless dyeing technologies that
reduce water consumption in textile production processes.
Adidas regularly checks its suppliers to ensure that they conform to their ethics.
The company provides education and trains the suppliers in such a way that
they are given the ability to fulfil the social and environmental requirements.
Adidas aligns its CSR activities with the United Nations Sustainable
Development Goals. It reports its progress in terms of goals around the world.
The brand involves its employees, customers, suppliers, and NGOs through its
forums to obtain feedback regarding sustainability and social responsibility.
STP analysis of Adidas
The target market for Adidas is highly active, both athletes and non-athletes are
equally enthusiastic about sport. The Adidas customers range from 14 to 40
years of age although the brand does offer clothing and shoe lines for infants
and children, too.
The target market for the company majorly comprises the Adidas market
worldwide and the largest share being in the Europe region. The brand, Adidas,
targets both men and women with different product lines. Adidas' strongest
product category is footwear but now it more moving to clothing and apparel.
Market Segmentation of Adidas
Adidas market segmentation is primarily divided into Behavioural,
Demographic, and Psychographic segmentation. The company has several
segments based on customer preferences. All Adidas products are classified
under these categories: Neo, Originals, Performance, or Style.
Neo: This is a new segment whose products are specifically for teenage
customers aged between 14 to 20 years.
Originals: The line of product offerings offered in this category consists mainly
of street-style casual wear. Originals include footwear and apparel that are not
necessarily sporty looking.
Performance: under this segment, products are made that are sporty. It includes
athletic clothing, i.e., sportswear that is designed to help athletes cope with their
needs. The needs include sportswear, that is sports cloth and footwear that can
enhance the overall performance of users in their respective sporting activities.
Style: Under this category comes Adidas products like Footwear and Apparel,
which are considered to be stylish and sporty, and the target customers for this
category are typically young people.
Behavioural segmentation: The Neo, Originals, Performance, and Style
segments of Adidas offer a choice to different customers based on their
preferences. Athletics customers would be attracted by the product's
underperformance, while originals customers would attract streetwise clothing
seekers. Trendy and sporty youth can remain in Style, while young teenagers
can choose clothing and shoes from the Neo segment.
Demographic segmentation: Adidas designs and manufactures clothes, shoes,
and accessories for different age groups and genders. For example, as pointed
out earlier, Neo products are made for teens aged 14 to 19 years old.
Psychographic segmentation: Adidas can easily maintain the equilibrium by
producing sportswear and apparel for both the upper and middle classes. They
offer high-quality items as well as products that would cater to the budgets of
the upper-middle-income groups.
Targeting Adidas
The target market of Adidas is moderately broad-based. The target customers
include sports and fitness enthusiasts, youth conscious of fashion, and brand-
loyal followers. The brand majorly targets young athletic adults in the age
bracket of 20 to 30 years. The customers relate well to sports and identify
themselves with sportswear brands that are quite glaring on earth like Adidas.
The Neo range was designed to cater to the needs of Generation Z on sporty,
fashion-forward clothing, shoes, and accessories. In general, Adidas' marketing
strategy is about introducing a new generation of athletes to the Adidas brand so
that they can stay with the brand all their lives. Adidas regards this generation of
customers broadly as very influential in promoting the brand and as an
inspiration for product innovation.
The target market also encompasses middle-aged (40 to 65 years old) customer
groups, many of whom have been loyal to the brand since their youth. Adidas
targets customers belonging to the upper class-and upper-middle class.
Ultimately, Adidas designs and produces products for customers in the Neo,
Originals, Performance, and Style target segments.
Below are some targeting strategies for Indian consumers.
The Cricket Fanatic: Cricket remains the top sport in India.
Adidas is funding this effort by associating itself with some of the biggest
cricketing stars including Virat Kohli and Rohit Sharma.
These athletes are role models for millions of Indians, and the association with
Adidas gives the brand a brand image and brings it close to cricket enthusiasts.
The company targets this segment with cricket-specific products and strategic
partnerships with cricket stars, capitalizing on the immense passion for the
sport.
The Aspiring Athlete:
In India, the growing fitness culture has been demanding performance apparel
and footwear. The brand Adidas caters to this group of customers with products
such as running and training along with other related fitness activities.
The Fashion-Conscious Individual:
Athleisure wear is one of the most trending trends in India; thus, Adidas's stylish
yet comfortable sportswear from workout sessions to casual outings perfectly
comes into this trend.
Positioning strategy for Adidas
The positioning strategy of Adidas aims to be the best sportswear and sports
footwear and accessories brand worldwide. All elements of the marketing mix,
Product, Place, Price, and Promotion help Adidas to position itself as a leader in
the world's sportswear and accessories markets. To achieve this, Adidas has
maintained a highly efficient production, marketing, distribution, and sales plan
to cater for the target global market.
Adidas has quite a well-planned marketing system, which includes collaboration
activities with sports clubs, traditional media, and social network activists for
popularizing the Adidas brand in the consciousness of sports fans. To bring the
brand closer to the ultimate consumer, Adidas has many stores located all over
the world. These stores can be found in popular shopping malls in major cities
around the world.
Social media plays a very significant role in helping Adidas market new or
existing products. Adidas seeks the assistance of social influencers in this end
and indeed promotes celebrity endorsements. On the other hand, Adidas relies
on sponsorship and kiting deals to help push out the brand to the full glare of the
public. Their brand can indeed roll out impressive sales and revenue figures
annually despite global economic troubles- very much based on proactive and
vibrant promotional drives.
Let’s understand their positioning in the Indian context
Brand Positioning:
While in comparison, competitors like Nike heavily rely on its technological
advancement, Adidas balances it out to obtain an overall feel of functionality
and practicality.
Adidas products are designed to keep the air flowing, providing comfort even in
the Indian climate.
Cultural Connection:
Another aspect, Adidas tends to use elements of Indian culture for its marketing
and product designs. This enables the brand to acquire certain local relevance
that adds to building a stronger connection with Indian consumers than Nike
seems to adopt in its more universal approach.
Recommendations and Solutions:
1. Challenges in Indian Market:
While Adidas continues to be successful, it has battled through many issues
related to the Indian market.
Highly Competitive Marketplace:
The sportswear industry is filled with strong competition from already
established market leaders in terms of market share, such as Nike and Puma,
along with affordable local brands that are now moving ahead.
Counterfeiting:
Adidas is confronted with counterfeiting products which, at any given moment,
may invade the market and damage the brand's image or reduce sales.
Changing Needs of Customers:
The sportswear market demands dynamic and responsive action from Adidas to
adapt to the changes in consumer preference.
2. Strategic Pivot and Adaptation:
To cross these challenges, Adidas adopts strategic pivots and adaptations:
Focus on Innovation:
Constantly innovative design and technology about the product keep the brand
relevant and differentiated from its competitors.
Having a strong online presence:
Keeping on top of the trends in online shopping makes it easier for them to
reach the market they have been eyeing and can battle fairly in the competitive
arena.
Omnichannel Strategy:
The integration of physical and online retail channels gives a seamless customer
shopping experience.
Localised Products and Marketing:
Knowing and catering to local preferences through culturally relevant
campaigns and products strengthens the company's market position.
