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adidas VS nike
A bird’s eye view of the e-marketing concepts incorporated by the giants of sports apparel.

Deepak Krishnamurthi 8/20/2007

Introduction Porter’s Competitive Forces SWOT Analysis of Adidas and Nike E-Business Model Effectiveness of E-Business .Contents 1. 3. 4. 2. 5.

. protect the athlete from injury. and make the product durable. This led to the development of www. Adidas has evolved and is now one of the premier global leaders in sporting brands offering athletic footwear. In 1948. As time has passed. the three stripes. Germany. This feat has been cultivated through continuous innovation and a broad product portfolio. an ecommerce site focused on interactively profiling Adidas's extensive product offerings accompanied by detailed product information. Adidas was founded along with its identifying trademark. apparel and accessories. From its inception.com.adidas.INTRODUCTION A daring dream began in 1920 when Adi Dassler fashioned his first shoe in Herzogenaurach. Adidas has faithfully adhered to three guiding principles embedded deep into its DNA: Produce the best shoe for the requirements of the sport.thestore.

what started as Blue Ribbon Sports in 1962 became Nike Inc. this is attributed to the emergences of the Internet and e-commerce. apparel. Large firms such as Nike and Adidas have grown immensely over the last two decades. and accessories for a wide variety of sports and fitness activities. marketer and distributor of athletic footwear. For Nike. a runner under Bowerman. MICHAEL PORTER'S FIVE COMPETITIVE FORCES Michael Porter has identified five forces that determine the intrinsic long-run attractiveness of a market or market segment : industry competitors.niketown. It is recognized as the world's leading designer. Nike's e-commerce site offers a unique experience. substitutes. From their modest start. in 1972. INTENSE SEGMENT RIVALRY The rivalry among existing competitors in the footwear industry is quite high. Online selling . buyers and suppliers. a strong Internet presence felt like a natural extension to their already globally focused strategy. products and product information for its potential and existing customers. Nike has grown to be a global leader in the sporting goods industry. a track & field coach and Phil Knight. Today www. based in Beaverton. (Nike – Greek Goddess of Victory) The founders were Bill Bowerman. Oregon. an established and growing organization. potential entrants.com.Initially. Their global reach has expanded through all continents.

For instance. Selling footwear online is highly competitive.has enlarged the reach for these firms allowing them to increase sales while minimizing operating costs. some substitutes for athlete footwear could be boots. however. THREAT OF BUYER’S GROWING BARGAINING POWER There are a large number of buyers relative to the number of firms in this . these firms are able to control their costs to retain performance advantage over emerging competitors in the industry. dress shoes or bear feet. The capital injection into web site development is high and must be updated frequently with new promotions and added features to attract online shoppers. Therefore. The capital requirement for setting up an online shop is comparatively lower than setting up a traditional bricks and mortar establishment. Therefore. barriers to enter into this e-commerce industry are quite low. there are no real substitutes for athletic footwear. Their web sites are more sophisticated and enticing to browse. THREAT OF SUBSTITUTE PRODUCTS Consumer substitutes for athletic footwear products are low because there are little alternatives to switch. Consumers are not likely to substitute due to the performance specification of the product. sandals. Most individuals in North America have access to high speed Internet and online purchasing has become the new trend for the twenty first century. a basketball player would not wear boots to play basketball. the online footwear industry is highly abundant with hundreds of online merchants. THREAT OF NEW ENTRANTS Due to the large scale of both Nike and Adidas.

in order to increase sales and market share. There is very little differentiation among the suppliers.industry. Therefore. For example. SWOT ANALYSIS OF NIKE AND ADIDAS (With respect to e-commerce) STRENGTHS WEAKNESSES . Firms are able to switch between suppliers quickly and cheaply. services. Nike's "nikeid. due to the globalised networks of cheap labour. Companies such as Nike and Adidas have a definite advantage and power over their suppliers.com" link allows consumers to customize and design their own footwear by permitting customers to specify the desired colours and the option to personalize the footwear with their name. THREAT OF SELLER’S GROWING BARGAINING POWER There are many suppliers in this industry. These suppliers become dependent on these firms for survival. Moreover. and cotton are commodities available abundantly in the market. The use of online tools has helped to enhance the accessibility of users. Nike and Adidas have standardized their input procedures pertaining to the materials used. supplies. their labor force. which eliminates suppliers' bargaining power. and logistics. Leather. companies like Nike and Adidas must continuously market their product and differentiate their brands against competitors. rubber.

Expand e-commerce to global markets 6. 5. soccerevolution. Diversity in products offered on the web. The direct sale to consumers is creating conflicts with its own resellers. 3. Online customer service not “helpful” or easy to find. Possibility of distress from growing beyond its capabilities. 2. 5. sporting equipment etc). Increased demand in the industry for products available online. Kobe Bryant and his sexual assault case). Growing reputation in nonbasketball sports will boost ebusiness.. Expand e-commerce to global markets. Negative image portrayed by poor working conditions in its overseas factories. Strong control over its own distribution channel. apparel.com) 1. E-BUSINESS MODEL Nike and Adidas have adopted a merchant model which has three pillars of their e-commerce strategy: . 3. Negative image created by the sponsored athletes (i. Strong competition from some of its major challengers in all branches of the business. 2. Innovative designs in footwear enabling consumers to design their own shoes online. 4. 4. Secondary websites (eg. THREATS 1. E-commerce will reduce the cost of goods sold. 2. (footwear.1. Increase in price of providing technological solutions (ecommerce). 4.e. 3. Brand recognition and reputation. OPPORTUNITIES 1. 6. E-commerce is limited to USA. 4. 3. Possibility of outsourcing web development and e-commerce to a third party developer. 2. First movers advantage in ecommerce.

Sports. applying competitive pressure. Nike has landed a deal with Fogdog Sports which will sell their entire Nike product line on its web site. Tricks and clicks 3. and progress in addressing user concerns.com have the initial coverage in the US. while selling their specialty products on their e-commerce web sites.com. promoting new products.1. Nike and Adidas will also operate their traditional o. UK and eventually in Asia.com. Adidas signed an agreement with SportsLine.com.com and Sports. Pure-play e-tailer 2. This business model is referred to as "Bricks and Clicks. and SportsLine. Their online store. The main purpose of acquiring relationships with pure-play e-tailers is to promote and market products on an international level. increase market reach. . reduce cost. improving customer service." The primary goals of operating a bricks and click site is to increase sales. Fogdog.

This program is the first time a company has offered such mass customization of footwear. That's why it included adidas.com as part of its three pillar strategy along with pure play e-tailers. No other athletic footwear company is able to outshine these two firms when it comes to e-commerce. VS . Nike acquired the luxury of owning a site that's every bit as inspirational as it is informational. In the Nike's case the online strategy ensured its strong leadership position in the intensely competitive market. The final result is a web site that successfully portrays Adidas's product portfolio in an interactive and informational manner. By continuously relying on innovative companies to redesign the site. Adidas relentlessly pursued innovation and refreshing content to differentiate itself from Nike. Adidas also realized that in order to be successful it has to be fully committed to this initiatie. Nike's store enables online consumers to design key elements of the shoes they purchase. most of it at the expense of Reebok. an important milestone for a market leader. insignificant player back in 1998 to the number two position in the athletic footwear and apparel industry. bricks and clicks. Part of this success is due to Adidas's ability to thoroughly leverage the Internet as a marketing and e-commerce medium. Today. Through its initiative to be the first to market with its e-commerce web site launch back in 1999. Nike and Adidas seem to follow similar online strategies but Adidas experienced a greater transformation from being a minor. As a result. Adidas's approach to e-commerce was that of a follower since Nike was first.EFFECTIVENESS OF E-BUSINESS Nike's ability to realize the potential of the Internet has placed them in the ecommerce leadership position among other sporting goods companies.

google. .com 2. wikipedia.References : 1.com 3.

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