Turovetskiy Klimentiy V.

Nike vs. Adidas analysis

The rivalry between Nike and Adidas lasts now for more than two decades, so in aim to
provide relatively up-to-date information I will start with late 90’s and beginning of 21st century.
Internet was relatively new tool for business a that times, especially because companies started
using it as a commercial tool in early 90’s. Nike and Adidas as leading companies were familiar
with that trend, so Nike created their web site in 1996 and in 1999 integrated tools of e-
commerce there which is still really important nowadays. Adidas did the same thing one year
later in 2000. E-commerce is of course door to great opportunities to attain growth and
competitive advantage, so it was really crucial for them to use this powerful tool. So in terms of
e-commerce we can’t really pick a winner because it is pretty much the same, although we
might not know some inner algorithms of data collection and data structuring in aim to achieve
better results in terms of “brand to customer” relations and amount of sales, so whoever has
better algorithms is more likely to have bigger share on the market, but we can’t say who is it.
Also some statistics say, that Nike’s web site has higher web appearance and more user friendly
functionalities, so Nike is slightly more preferred online and it is very important nowadays.

Nike had bigger market share in comparison with Adidas, but recently it has changed a
little bit in favor of Adidas, thanks to the increasing popularity of the brand and attraction of
new users, so right now Nike and Adidas basically have the same market share. The value chain
configuration for both Nike and Adidas is supply chain. The value configuration has multiple
components but, essentially, the breakdown of the value chain indicates for both of these
companies that the cost to produce and sell an item over the Internet costs these companies
almost 50% of the price of the item. It shows us how e-commerce and it’s development is
crucial in this market.
Nike VRIO:

Resources/capabiliti Valuabl Rar Inimitabl Exploite Implicatio

es e e e d n

Temporary
Global presence Yes No No Yes
advantage

Competitiv
Brand image Yes Yes Yes Yes e
Advantage

Temporary
Customer loyalty Yes Yes No Yes
advantage

Temporary
product innovation Yes Yes No Yes
advantage

Competitiv
marketing
Yes Yes Yes Yes e
capabilities
Advantage

Temporary
market share Yes Yes No Yes
advantage

Temporary
supply chain Yes Yes No Yes
advantage

Adidas VRIO:

Resources/capabiliti Valuabl Rar Inimitabl Exploite Implicatio

es e e e d n

Competitiv
Brand Image Yes Yes Yes Yes e
Advantage
 Competitiv
Global Presence Yes Yes Yes Yes e
Advantage

Competitiv
Technology Yes Yes Yes Yes e
Advantage

Temporary
HRM Yes Yes No Yes
advantage

Temporary
Marketing Yes Yes No Yes
Advantage

Temporary
Customer Loyalty Yes Yes No Yes
advantage

Temporary
supply chain Yes Yes No Yes
advantage

>Adidas has managed a great image as an innovative brand that makes attractive products. It
has also maintained an excellent level of popularity and trust among its customers.

>Adidas has retained heavy focus on technology and invests in technology in all areas.
Investment in digital technology has also started paying it off and the brand’s sales ahem
jumped very fast. Apart from marketing, it invests in technology in supply chain and many more
areas.

>Nike has a very good brand image in the sports shoe industry. In fact it is the leading brand in
the industry closely followed by Adidas.

>The marketing capabilities of Nike are quite advanced and it is known for its excellent
marketing which is absolutely outstanding.
Strengths of Nike:
Strong management team and good corporate strategy in both North American and overseas
markets
Diversity and variety of products offered online
Strong brand reputation and history
Control over its own distribution channels

Weaknesses:
Negative reputation portrayed by poor working conditions overseas
E-commerce is limited to USA
Direct sale to consumers creates conflicts with resellers

Strengths of Adidas:
Pricing strategy which is competitive to Nike’s
Emerging brand name
Exclusive items and goods which can be purchased only online
Secondary web sites which target soccer in specific

Weaknesses:
E-commerce is also limited to USA, but Adidas is developing in other directions really fast, so it
can become their strength in front of Nike
Online customer service is not easy to find

To sum up, I can say that there is no clear leader in this pair, but Nike is little more favored due
to some crucial features and abilities listed above, but if we are talking about this market in
general, Nike and Adidas are the two biggest brands on the market, but It might not be forever
and new companies such as Under Armor can outperform and attract consumers by integrating
new technologies and providing people unique products. But as for now, Nike is leading on this
market, but Adidas has a really good potential.