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Adidas 9 cell industry attractiveness business strength matrix

Solution for the case studies, articles and other problems. Follow by Email Wednesday, April 13, 2011 Adidas corporate strategy and case studies 1. Has the corporate strategy changed with restructuring? Adidas was founded in 1920 in Germany by Adi Dassler; later in 1924 his brother joined him to promote his business.

Two brothers were successful to create innovative ideas and now Adidas Company has more than 700 patents and property rights. In 1948 two brothers had some kind of conflicts and both decided to split their business, one brother continued Adidas while another brother establish Adidas tough competitors Puma Market watch, 2010.

Adidas Group comprise of Adidas, Reebok, and Tailor-made. Currently Adidas has numerous contracts with food ball and basket ball athletes, golfers as well as New York Yankees.

As of May 2010, company operates over 2200 retail stores under the Adidas and Reebok banner Yahoo finance, 2010.

  1. The industry attractiveness and business strength scores can be used to portray the strategic the nine-cell attractiveness-strength matrix provides.
  2. This shows strategic fit within their operations and enables company to earned higher profit margin. Has the corporate strategy changed with restructuring?
  3. Two brothers were successful to create innovative ideas and now Adidas Company has more than 700 patents and property rights. While talking about risk factor, though sporting goods industry does not have complex legal and political risk associated but it has high investment risk.

To generate consumer excitement and enhance brand profitability Adidas group is continually strive by executing a clear strategy i. The Adidas group will offer the variety of product mix to capture a greater combined market share.

Adidas 9 cell industry attractiveness business strength matrix

Adidas brand will continue to have a clear focus on sport performance and will highlight team sports, while brand Reebok will be positioned as fitness oriented, sports-lifestyle brand with the focus on individual performance. Adidas now position themselves in sporting industry as global leaders in sporting brands offering distinct brand communication to reach different consumer of athletic footwear, apparel and accessories Adidas, 2009.

Prior to 2005-2006 restructuring, Adidas had lineup sporting goods comprise of three different business segments: This business segments has three different products line, they are Adidas Sport performance, Adidas Sport Heritage, and Adidas sport Style.

Salomon business unit is a number 1 brand which offers winter sports such as Alpine, Nordic and snowboard. This business segment offers a full range of golf hardware and accessories. Though Adidas diversified with in sporting goods industry, they are fail to realized resources fit within the various business units.

In different sport-related industries i. Adidas, Salomon and Taylor made with different product mix create difficulties to cross promote the merchandise. Further due to the varied demands of each business, there were no cost savings through economies of scale. The attempt of management to generate efficiency via all business unites proved to be wrong decision.

After restructuring of their business units Adidas broad objectives or mission has not changed to be a number one leader in sporting goods industry in the world but Adidas changed their strategy to achieve that objective. To achieve that goal adidas 9 cell industry attractiveness business strength matrix acquired Salomon but they were unable to achieve their goal.

Adidas 9 cell industry attractiveness business strength matrix displaying

Still Nike is leading the sporting goods industry. Therefore, they restructure their business unit as well as change their strategy to achieve their mission. Now Adidas more focused on innovation and strengthen their brands for the high performance. Adidas reorganized their business units into three core brands such as Adidas, Reebok, and Taylor Made-Adidas Golf to expand their leadership in product innovation and differentiation.

Basically 9-cell matrix enables Adidas to identify the attractiveness of various companies in their respective industry that Adidas acquired. Athlete footwear industry as well as golf equipment market is growing market. Adidas has significantly increasing their market share since their restructuring of business.

Sporting goods industry is highly competitive industry having few more strong competitors. As mentioned in the case, Adidas 9 cell industry attractiveness business strength matrix supply chain enable them to lower their operating cost and quicker their delivery. Efficient supply chain of Adidas enables them to reduce number of contract manufactures from 547 to 377 thereby reducing complexity in procurement planning.

This shows strategic fit within their operations and enables company to earned higher profit margin. Sporting industry has opportunity to expand their business into most of the part of Asia and Africa while the biggest threat for them is intense rival.

While talking about risk factor, though sporting goods industry does not have complex legal and political risk associated but it has high investment risk. Overall, Adidas three of its business units seems more attractive and profitable. Since Adidas have core competencies lies on athletes footwear Adidas business unit looks more attractive and profitable. Similarly primary focus of Reebok business unit is also shoes and sporting accessories which enable Adidas Company to have a good strategic fit into their value chain and make company more profitable.