Free Essay Sample on Adidas: Navigating the Dynamics of the Sports Goods Industry

Abstract

The sports goods industry is one of the leading industries contributing to the Gross Domestic Product of nations. Organizations such as Nike, Puma, and Adidas are among the leading businesses focused on providing sporting individuals with sports products. Adidas is one of the earliest companies that venture into the sporting industry to manufacture products for athletes. The company has numerous manufacturing branches worldwide, but many are situated in Europe, Asia, and North America. Recently the company embarked on developing sports equipment that is technologically conscious of helping coaches and athletes improve their performance. Adidas has diversified its products to include fashion shoes and clothing for those who love to wear sporting clothing. The company's market segment includes young and older individuals athletes and individuals who are passionate nature towards sports. The company has merged and acquired several other smaller businesses to expand its market because of the fluctuations in the economy of the world.

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Keywords: Sports goods industry, sports products, Adidas, technology, market segmentation

Introduction

Adidas is one of the leading manufacturers of sports products ranging from sports apparel to shoes and equipment. The Dassler Brothers Shoe Factory began with the manufacture of running shoes and later ventured into manufacturing soccer shoes. In 1949, Adolf Dassler registered his own Company, Adidas AG, which has grown over the years into one of the leading producers of sports products for all people (Adidas Official Website 2020). The Adidas company headquarters are located in Herzogenaurach, Bavaria, Germany, with branches of the Adidas company group worldwide (Wildfeuer 2018). Today, the Company Company's management is by an executive committee headed by the Chief Executive Officer.

The Company is known for its ability to manufacture sports products for a variety of sports. Sporting shoes are what most people know the Company manufactures; the Company manufactures shoes for different sports, including soccer, athletics, basketball, rugby, baseball, cricket, hockey, and many other sports. The Company manufactures various sportswear like team kits, including t-shirts, pants, socks, and jackets. The Company manufactures numerous sports equipment like balls, golf and hockey sticks, and protective gear for contact sports like American football (Wildfeuer 2018). The Company is also involved in manufacturing other accessories like watches, bags, caps, and bracelets for both male and female athletes. Apart from manufacturing products for competitive sports, the Company ventured into the non-competitive sports market by manufacturing products for people who like to wear sporting apparel. The Company manufactures shoes, clothing, and other accessories for people with a passion for sports fashion.

EXTERNAL ENVIRONMENT FACTORS

Social Forces

Many social factors affect the sports goods industry. Factors such as values perception of the product, the expected quality, health awareness, income levels, preferences, level of education, and many more shapes the industry and its businesses (Birch, 2019: 16). The perception that people have concerning sportswear determines the demand for the products that the business manufactures. Social forces impact the industry by making the businesses take notice of public opinion hence improving their operations, which results in improvement of the whole industry.

People's concerns about their health shape how Adidas designs its products to meet its consumers' preferences. Consumer perception of the business as a major player contributing to community welfare shapes how Adidas engages in public relations. The Company sponsors events that play a role in proving the communities (Wright 2019: 9). For example, the Company sponsors events supporting environmental conservation like athletic events like sponsored marathons. The need to have products that guarantee their safety contributes to the Company continuously engaging in safer products.

Technological Forces

The advancement in technology shapes the sports goods industry by influencing the way business conduct their operations. Companies in the industry are constantly improving in their manufacturing and marketing techniques to meet the ever-changing demands of their customers. Technological improvements force businesses to adapt their manufacturing processes to produce sports apparel that meets the market's preference.

Technology shapes the Adidas manufacturing process; the Company provides coaches and athletes with the best products to enhance their performance. Advancements in technology have made it possible for Adidas to conduct numerous tests on its products to check their quality and safety (Wright 2019: 10). Also, technology has made it possible for Adidas to manufacture sports goods that promote the individual's health. For example, the manufacture of sports accessories like watches with gadgets to measure the athletes' heart rate as they work out.

Economic Factors

People view sports goods for non-competitive individuals as items that a person purchases because they can buy or have some extra cash to spare. This perception has led many organizations/ businesses in the industry to continuously shift their production with the fluctuations in the market. The need to maintain growth despite the economic conditions makes these companies develop newer ways to reduce costs. Customer purchasing power influences production and investment in the industry because, without a reliable market, businesses end up making huge losses.

Economic forces shape the way Adidas manufactures its products. The Company shifts its production to the economic conditions in the market. The Company is continuously conducting market surveys to determine which products are the clients (Wright 2019: 10). Because of low economic growth and stiff competition in the market, Adidas diversifies its products to attract more clients. The Company targets new and existing customers with each new product it releases into the market, helping it maintain its existing customer base and attract new customers.

CUSTOMER BASE

Adidas has a huge market segment globally; its brand is recognized by many individuals worldwide with the market consisting of both young and old individuals of either gender (Birch 2019: 18). Adidas manufactures products that cater to individuals who actively engage in sporting activities or are passionate about sports. Approximately 70 % of the Company's market is individuals and organizations that engage in active physical sports while the rest is divided among other individuals (Birch 2019: 27). These market segments provide the Company with clients who purchase its products.

The Company plays a huge role in its clients' lives because it promotes healthy lifestyles among the population. The Company and its products make the population conscious of the need to engage in physical activity, promoting good health in individuals. Sponsoring events helps improve the lives of the active participants in the events (Adidas Official Website, 2020). The Company offers support to events that promote environmental conservation issues, which is important in environmental protection. The Company offers the customer opportunities to purchase clothing that is cheaper and easier to maintain while at the same time, giving them a sense of fashion (Birch 2019:19). The accommodative prices make it possible for customers to purchase the goods they need. The Company offers those passionate about sports a chance to be part of their favorite teams that they support.

The Company has collaborated with numerous other organizations and businesses to expand its operations; in the USA, it partnered with the NBA to produce the kits for sports teams. The Company has also acquired various businesses as it aims to expand its operation all over the globe in a competitive market (Adidas Official Website 2020). For example, the merger with Reebok and the acquisition of the Runtastic App a digital fitness app in 2015. The Company sponsors major events and sports personnel who act as its brand ambassadors in different sporting fields.

REFERENCES

Adidas Official Website. 2020. Retrieved October 6, 2020. (https://www.adidas-group.com/en/group/history/)

Birch, Rebekah. 2019 "Adidas: A Strategic Audit." Retrieved October 6, 2020 (https://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1172&context=honorstheses)

Dogan, Onur, Ejder Ayçin, and Zeki Atil Bulut. 2018. "Customer segmentation by using RFM model and clustering methods: a case study in retail industry." International Journal of Contemporary Economics and Administrative Sciences 8, no. 1:1-19. Retrieved October 6, 2020: (https://d1wqtxts1xzle7.cloudfront.net/58102773/2018--Dogan_et_al.__2018--IJCEAS.pdf?1546459019=&response-content-disposition=inline%3B+filename%/)

Wildfeuer, Julia. 2018. "Branding and Customer Satisfaction: A Research about the Adidas Group." Retrieved October 6, 2020 (https://www.theseus.fi/bitstream/handle/10024/146318/Bachelor%20Thesis%20Julia%20Wildfeuer.pdf?sequence=1)

Wright, Mason. 2019. "Strategic Audit of Adidas." Retrieved October 6, 2020 (https://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1160&context=honorstheses)