FACULTY OF SPORTS SCIENCE AND RECREATION UNIVERSITY

TECHNOLOGY MARA, PERLIS BRANCH

STRATEGIC MANAGEMENT
IN SPORT ORGANIZATION (SMG605)

CASE STUDY 1
EXTERNAL FACTOR EVELUATION (EFE)
AND COMPETITIVE PROFILR MATRIX (CPM)

PREPARED BY
SITI NUR MADIHAH HANIM BINTI BAHARI
NUMBER MATRIC: 2019252008
CLASS: RSR241/5A

PREPARED FOR:
DR. MUHAMMAD AIMAN BIN ARIFIN

DUEDATE:

WEEK 9
Table of Content

Contents Page

1 Acknowledgement 1

2 External Factor Matric (EFE) 2-4

3 Competitive Profile Matrix (CPM) 5-7

4 References 8
 Acknowledgement

Alhamdulillah, first of all I would like to thank Allah S.W.T as finally able to finish
my first case study assignment that have been given to me by my lecturer, Dr. Muhammad
Aiman Bin Arifin. Luckily, all problems have been resolved peacefully and I was able to
adapt to the changes and work properly and wisely. Besides that, huge thank would like to
address to Dr. Muhammad Aiman Bin Arifin because without his guidance, I could not
manage to do my task. He would always give me supports and guide me to show what’s to be
done and always asking if have any problem.

Despite we are having class Online Distance Learning (ODL), he has not neglected
his duty as a lecturer in teaching me and my classmates in order for complete this semester.
Only God knows the efforts being putted by all lecturers upon us students.

Lastly, not to forget, thank to my beloved classmates that has always helping to better
understand about a given task and also working hard to produce this amazing result to our
lecture. I had showed a great jobs as well as putting my 100 percent of commitment and
responsibility. I hope that the efforts given throughout this assignment will benefits us in the
future.

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CASE STUDY 1A: EFE MATRIX ADIDAS

OPPORTUNITIES WEIGHT RATING WEIGHT

SCORE
1 The Sport shoe market is 0.2 3 0.5
fast growing
2 Digital Marketing 0.06 2 0.26

3 Product innovation 0.2 3 0.2

4 New environmental policies 0.04 2 0.34

5 Expansion of the emerging 0.05 4 0.4

markets
THREAT

1 High Competition 0.23 3 0.7

2 Regulatory Pressures .05 2 .1

3 Increased number of fake 0.07 2 0.16

products posing as ADIDAS

4 Economic Fluctuation 0.1 2 0.2

TOTAL SCORE 1.00 - 2.86

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 External Factor Evaluation Matrix (EFE) on Adidas is the industry of apparel and
sport shoes, Adidas are one of the leading names. To better its performance, the company has
made strategic changes in the recent past. The company has also focused its businesses in the
metropolitan cities in the attempts to grow faster internationally. Its expectations are to
become the first true world’s sports company and to improve its suitability by improving and
using sustainable materials for shoe production. With its mission of being the best sports shoe
company in the world, the company focuses on strategic measures such as speed, cities and
one source. Additionally, the company concentrates on innovation and making shoes that are
desirable for athletes. Other than the high market competition from house hold brands such as
Nike and Under Armour, the company still registers high growth.

In discussing Adidas external evaluation factor matrix, one needs to understand that
these factors are external triggers that affects the company positively or negatively and can
lead to the growth or the downfall of the company. The matrix usually shows the vital
variables that a company needs to work on. The external factors are usually categorized as
opportunities or threats and a company should use the opportunities to minimize its threats.

Table EFE MATRIX shows the highest opportunity on Adidas products is new
environmental policies that are 0.04 weight and 0.34 weight score. The new environmental
policies create good level field for industries in the market and Adidas being one of the
players, it gets the opportunity to drive home the advantage through new technology and
gaining larger market share.
Next, digital marketing is 0.06 weight and 0.26 weight score which is second higher.
In the current world with high technology and easy access to the internet, Adidas has taken
advantage of the digital world and able to market its products over the internet. This has
made it easy for the customers all over the world to view and buy their products. The
customer experience has improved as a result and this has so far let to high sales. This has
been made easier by online marketing and many companies that aid in shipping the goods.
After that, the sport shoe market is fast growing get 0.2 weight and 0.5 weight score
because sportswear has been component of design. The need to buy sporting attires has been
growing so fast and this has offered major opportunity for Adidas as its market has expended
world-wide. Some people just buy sportswear for fun, others buy from Adidas because they
love the brand name and want to be identified with the brand. Previously only those in the
sports field would buy the shoes and apparels but nowadays people buy them for fashion.
This has led to the market growth and high demand for the products.

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 Then, expansion of the emerging markets is 0.05 weight and 0.4 weight score. This
new markets have been emerging and China is one of the markets. With the high population
in China and given that Adidas is a brand name, Adidas has an upper has in the market share
(Huo, 2019). Even though there are other companies in the new regions within the same
industry, the competition that Adidas poses to them is still high and this remains as an
opportunity.
Lastly, product innovation which is 0.2 weight and 0.2 weight. Product innovation is
one of the most important sources of growth for any organisation. Previously, the market for
sportswear was limited to male and female athletes. However, this has altered in recent years.
The demand for at leisure has also increased in recent years. Adidas has put in place
measures to fulfil the increased demand for sport shoes in order to better or attract more
clients. It has devised strategies to match the new demand patterns, and it currently responds
to people's demands in both sports leisure and fashion sports.
For the threat, the very high is competition it is 0.23 weight and 0.7 weight score
because over the years, competition within the sport shoe and apparel industry has been
growing so fast and Adidas face high completion from top industry performers such as Nike,
Sketchers, New Balance and Under Armour. All of the industry's competitors have increased
their marketing and innovation spending as a result of the competition. The industrial
participants are also very interested in research and development. As a result, operational and
marketing costs have had a significant negative impact on Adidas.
Next, regulatory pressures get 0.05 weight and 0.1 weight score. In recent years, legal
and regulatory demands have resulted in an increase in compliance and operational costs,
thus stated Asif et al (2019). While these limitations may deter new bands from entering the
market, they also make it difficult for current businesses to make money because they are left
with less area than they require for market expansion and innovation.
Then, increased number of fake products posing as Adidas gets 0.07 weight and 0.16
weight score. The quantity of fraudulent Adidas products on the market has increased.
Customers mistakenly believe the products are from Adidas since they bear the Adidas logo.
These products are also sold at low prices, making the original impossible to compete with.
It's difficult for Adidas to remove fraudulent products from the market because they're sold
all over the world, and determining where they're made is also difficult.
Lastly, economic fluctuation 0.1 weight and 0.2 weight score. Economic volatility has
persisted around the world, and this has wreaked havoc on Adidas profitability. The changes
in numerous markets have resulted in significant losses.

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CASE STUDY 1B: COMPETITIVE PROFILE MATRIX (CPM)

Nike Puma Under Armour

Critical Success factors weight rating score rating score rating score

Advertising 0.12 3 0.36 1 0.12 2 0.24

Financial Position 0.1 4 0.4 3 0.3 1 0.1

Market Share 0.1 4 0.4 1 0.1 1 0.1

Global Expansion 0.18 3 0.54 1 0.18 2 0.36

Product Quality 0.23 4 0.92 2 0.46 1 0.23

Price Competitiveness 0.15 2 0.3 3 0.45 4 0.60

Sustainability 0.12 4 0.48 1 0.12 2 0.24

Total 1 Nike 3.4 Puma 1.73 Under 1.87

Armour

The Competitive Profile Matrix (CPM) is a tool that compares a company's strengths
and shortcomings to those of its competitors. Firms frequently utilise CPM to better
understand the external environment and competitiveness in a specific industry. The profile
matrix identifies and compares a company's top competitors based on industry vital success
characteristics. In comparison to its competitors, the study highlights the company's relative
strengths and disadvantages. As a result, a business can quickly determine which areas it
should enhance and which parts it should safeguard.

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 Table CPM show that there are several competitive profiles matric (CPM) which is
Nike, Puma and Under Armour. As we can see, the 3 in this competitive profile matric is the
critical success factors are considered the points that the comparison is done upon. So, it will
be the 3 most competitive to the Adidas in the market. For Nike background, in 1964
American company that manufactures, develops, and markets shoes, clothes, technology,
consumables, and products around the world. Bill Bowerman, a track & field coach at the
University of Oregon, and his former student Phil Knight launched Blue Ribbon Sports. In
1966, they created its first retail location, and in 1972, they introduced the Nike brand shoe.
In 1978, the firm was renamed Nike, and two years later, it became public.

Next, background of Puma, Puma was established in 1945 in Herzogenaurach,

Germany, which is brand of the nation's main producers of sport leisure shoes, clothing, and
equipment. PUMA, Cobra Golf, and Tretorn are all owned by the PUMA Group. The
corporation employs over 9,000 staff globally and markets its services in over 120 countries.
It is dedicated to working in strategies that benefit the world by promoting Creativity,
Sustainability, and Peace, as well as adhering to the ideals of becoming Fairly, Honesty,
Positive, and Innovative in all of its behaviour and choices

Then, background of Under Armour, in 1996, Kevin Plank started Under Armour. He
was a 23-year-old University of Maryland football special team’s captain at the time. After
noting how much dryer his tight pants were than that of the shirt he wore while playing
football, Plank came up with the idea for the Under Armour brand. Plank set out to create a
synthetic cloth, jersey that would drain away moisture, and he started, give it a try sell
everything out of the trunk of his car and his grandmother's basement. Plank made his first
flash sales at the end of 1996, selling $17,000 worth of gear to a squad.

From the table, we can see that Nike has the higher total which is 3.4. The higher
factor is product quality. The high perceived quality of the brand, not only among athletes but
also among the general public, is one of the most important sources of Nike brand equity.
Despite the fact that the majority of Nike's market consisted of people who simply walked
around in their shoes, Nike was devoted to designing shoes that met the high requirements of
professional competition. It shows that quality for Nike will give much pressure to Adidas
because of the total at the table above Adidas.

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 Next, the second highest for the total is Under Armour which is 1.87. The higher
factors are price competitive that score more than others competitors. Price is significant to
marketers because it symbolizes their evaluation of the value customers see from a good and
services and their willingness to spend for it. It shows that price for Adidas more acceptable
and it will give competition to Adidas. Nowadays, price is the thing that consumers will
consider before proceeding to other factors. So, for this sport company which is Puma it will
give pressure to Nike compare to Adidas company.

Lastly, the total for Puma is 1.73 that is at number 3 for the total. The higher factor is
product quality. The focus of Puma has remained on making great quality shoes that help
athletes improve their performance. Innovation is at the heart of product design. Naturally,
we constantly sharpen our design principles: With products like the Calibrate Runner, we
have introduced some of the industry’s most eye-catching, but also innovative and
commercial styles. In addition, Adidas also has good score in product quality. It shows that
quality for Puma will give much pressure to Adidas because of the total at the table above
Adidas.

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References

Dipanwita Bhattacharjee. (2015). Competitive Profile Matrix: A Theoretical Review

http://www.assumptionjournal.au.edu/index.php/abacjournal/article/view/3022

Shu Xin Chua. (2015). CPM Matrix of Nike in Malaysia Market

https://www.scribd.com/document/292610627/CPM-Matrix-of-Nike-in-Malaysia-
Market

Course Hero. (2014). External Factor Evaluation Matrix on ADIDAS

https://www.coursehero.com/u/file/45782662/External-Factor-Evaluation-Matrix-on-
ADIDASdocx