Adidas' advantage lies in experiments. It tries new materials and technologies to produce stronger and lighter shoes. It uses kangaroo skin to tighten the edge of shoes. Four-nail running shoes and competition shoes adopt nylon soles, and the spikes can be replaced. High quality, innovation and product diversification made Adidas dominate the international competition in this field in 1970s.
In 1970s, the vigorous health movement surprised Adidas. In an instant, millions of people who were not good at sports before became interested in physical exercise. The fastest growing part of healthy exercise is jogging. It is estimated that by 1980, 25-30 million Americans joined jogging, and100000 people wore running shoes for leisure. Nevertheless, in order to protect its dominant position in the competitive market, Adidas did not enter the jogging market on a large scale.
In the 1970s, a large number of competitors appeared, such as Cougar, Brooks, New Brands and Tiger Brand. But one company is more enterprising and innovative than others, and that is Nike. Nike was founded by a former long-distance runner from the University of Oregon and made its debut in the Olympic trials held in Eugene, Oregon from 65438 to 0972. Marathon runners wearing new Nike shoes won the 4th to 7th places, while competitors wearing Adidas shoes occupied the top three in that competition.
Nike's breakthrough comes from 1975' s "sandwich biscuit sole" scheme. The rubber nail on the sole makes it more elastic than other shoes on the market. With the popularity of sandwich biscuit soles and the rapid expansion of the travel shoe market, the sales of Nike 1976 reached140,000 USD. 1972 was only $2 million, and since then Nike's sales have risen rapidly. Today, Nike's annual sales exceed $3.5 billion, and it has become an industry, accounting for 26% of the sports shoes market.
Nike's success stems from its emphasis on two points: first, research and technical improvement; Second, the style is diversified. The company has nearly 100 employees engaged in research and development. Some of its research and development activities include high-speed photographic analysis of human movement, try-on tests of 300 athletes, and continuous experiments and research on new and improved shoes and materials.
In marketing, Nike provides consumers with a series of choices. It attracts all kinds of athletes and conveys the most perfect image of travel shoe manufacturers to consumers.
When jogging reached its peak in the early 1980s, Adidas had become a "laggard" in the market. Competitors have introduced more innovative products and varieties, and successfully expanded to other sports markets. For example, Nike's products have dominated the basketball and youth markets, and sports shoes have entered the fashion era. By the 1990s, Adidas' market share had dropped to a pitiful 4%.
Think about a problem
Please use effective analysis methods to explain the market share reduction caused by Adidas' bad decision, and the corrective measures that Adidas can take today?
Reference answer
Using SWOT analysis, we can clearly understand the reasons why Adidas made a bad decision and the serious consequences this decision would bring at that time:
Internal advantage: Adidas insists on its own competitive advantage (dare to do experiments in materials and technology), but ignores the development and change of organizational environment (consumer preference leads to the recognition of different functional shoes), and automatically gives up the consumer demand in line with the market development direction (jogging shoes market).
Internal disadvantages: Adidas management * is obsessed with the original business philosophy and lacks flexible leadership style; Adidas organization lacks the function of grasping the market and collecting market information.
Threat: ignoring the development direction of competitors' competitive strategies (sandwich biscuit soles) and the competitive advantages of competitors (the R&D team is growing, the R&D projects are colorful and close to consumers-300 athletes try them on, and the materials are constantly being boldly studied).
Opportunity: despise the change of environment: the rise of health movement itself is the beginning of the change of business wind direction. There is also a lack of analysis of a large number of new entrants in the 1970 s, especially the appearance of Nike in Oregon trials, which still failed to awaken Adidas management to make strategic adjustments.
The popularity of sports shoes in the 1990s is an opportunity signal from the secondary market. Therefore, the management of Adidas * should, on the basis of its original advantages, first make major adjustments to the corporate strategy, adapt to the changes in consumer preferences, and develop diversified product markets. Secondly, strengthen the construction of staff, conduct human resources training, and recruit professional and experienced personnel to engage in market information collection and analysis. Finally, re-establish an innovative corporate culture, give up the condescending attitude in the sports shoes market at the beginning, and let the whole organization follow the context of environmental changes.