From past many decades people are getting more into sports as a recreation as well as an entertainment. Hence, sports materials and equipments especially the shoes that are used in various sports are demanded much higher.Nike is the leader in the athletic shoe industry after which comes Adidas. So this clearly states that they are Giants in athletic footwear industry and are highly competing each other. In this study most of the factors are covered that affects the competition of Nike and Adidas.
It contains all the details of Nike as well as Adidas. And there also a survey conducted, considering various factors of Nike and Adidas.
The purpose of this report is to learn about strategy and strategic management by comparing the strategies of two companies from the same industry. The strategies of Nike and Adidas have been compared from the footwear industry. Nike and Adidas both specialize in footwear, apparel and accessories and their competition is intense as Nike is the market leader and Adidas is the market challenger.
The topics in this report cover critical incidents of both Nike and Adidas that occurred in the past and the comparison between both their strategies as well their future plans. This report shows us the influence the strategy has on the success or failure of companies and how companies craft sustainable strategies that help them to retain their position in the market.
Nike and Adidas have almost similar strategies but different implementation methods. Both the companies concentrate heavily on technology and strive to produce new and innovative products.
Nike focuses on the American markets whereas Adidas focuses on the European market. Nike does not have any production plants as they only design, distribute and market their products and hence they outsource to various countries in Asia, mainly Taiwan and Korea, which outsource their production to China, Indonesia and Vietnam. Adidas on the other hand, carry out all their production in Germany and recently has adopted Nike’s outsourcing policy by outsourcing to Asian countries. Nike and Adidas both follow a premium pricing strategy which according to Kotler, is a strategy where companies charge a premium price for their products. Their competition is always intense and according to Anderson (2010) during the world cup 2010 Nike launched the popular “write the future”, three minute advertisement featuring world cup stars which was a major hit on YouTube and Adidas replied with their two minute video with celebrities like Snoop Dogg and Daft Punk into a famous scene from the movie Star Wars. Nike sponsored nine teams whereas Adidas sponsored 12 teams.
Even though Adidas was the official sponsor of the World cup 2010, Nike attached an LED display to a 30 story skyscraper in Johannesburg where soccer fans could write short messages using popular social networking websites such as Twitter and Facebook and Nike put up 100 messages on the side of the walls every night.
An athletic shoe is a generic name for footwear designed for sporting and physical activities.
Athletic shoes, depending on the location and the actual type of footwear, may also be referred to as trainers (British English), sandshoes, gym boots or joggers (Australian English) running shoes, runners or gutties (Canadian English, Australian English, Hiberno-English), sneakers, tennis shoes (North American English, Australian English), gym shoes, tennis, sport shoes, sneaks, or takkies (South African English) and rubber shoes (Philippine English) canvers (Nigerian English).
The term Athletic Shoes is typically used for running in a marathon or half marathon, basketball, and tennis (amongst others) but tends to exclude shoes for sports played on grass such as association football and rugby football, which are generally known as “boots”, or in North America as cleats.
Attributes of an athletic shoe include a flexible sole, appropriate tread for the function intended and ability to absorb impact. As the industry and design have expanded, the term “athletic shoes” is based more on the design of the bottom of the shoe than the aesthetics of the top of the shoe. Today’s designs even include sandal, marry Jane and even elevated styles suitable for running, dancing and jumping.
The shoes themselves are made of flexible compounds, typically featuring a sole made of dense rubber. While the original design was basic, manufacturers have since tailored athletic shoes for the different purposes that they can be used for. A specific example of this is the spiked shoe developed for track running. Many of these shoes are made up to a very large size because of athletes with large feet. High-end marathon running shoes will often come in different shapes suited to different foot types, gait etc. Generally, these shoes are divided into neutral, overpronation and underpronation (supination) running shoes to fit the respective foot strike of the runners.
The word sneaker is traditionally defined a shoe consisting of a solid rubber sole attached to an upper made, usually, of canvas. While rubber soled shoes called plimsolls had been in use for some time for aristocratic lawn sports, and King Henry VIII was reported to have worn a sneaker-like shoe for playing tennis, the true life of the sneaker did not begin until American inventor Charles Goodyear patented the process for vulcanization of rubber. Until that time, the sneaker as we know it now was simply not possible. The oldest sneakers used for basketball are thought to be the Converse All Stars, first produced in 1917, but the Spalding Company produced shoes in 1907 specifically for the game of basketball. Still these are not the oldest sneakers. A discovery at an estate sale has led experts to believe that the first basketball shoes were produced by Colchester Rubber Company of Colchester, Connecticut who went out of business in 1893. While there is no significant evidence to point to the use of these shoes for basketball, it seems that shoes that were produced just a few miles from the birthplace of basketball just two years after the invention of the game would certainly have been used for basketball.
By the early 1900’s, sneakers were being produced by small rubber companies who specialized in the production of bicycle tires. U.S. Rubber, a conglomerate of nine other rubber companies, introduced Keds in 1916 while Converse introduced the first mass marketed basketball sneaker in 1917 with their introduction of the Converse All Star. Other companies, including B.F. Goodrich and Spalding Co., were producing tennis shoes and smaller family-owned companies were manufacturing early cleared shoes. At first the market for sneakers was small and practically invisible, but after World War I, America turned to sports and physical health as a way to demonstrate moral fiber and patriotism. The market for sneakers grew steadily as young boys lined up to by sneakers endorsed by football player, Jim Thorpe and Converse All Stars endorsed by basketball player, Chuck Taylor. In the 1920’s and 30’s, manufacturers added traction to the soles of their sneakers and began marketing them for different sports. A major innovation of this time was the production of distinct models for boys and girls. Sneakers were known for comfort and used almost strictly for athletic endeavors.
The revived Olympic Games provided exposure and heightened interest in sneakers and sports in general, leading to increased sales. It was at this time that the German sneaker manufacturer, Adidas would be founded in Herzogenaurach. German manufactured sport shoes would dominate the market until the late 1960’s with the founding of current market leader, Nike.
World War II interrupted production of sneakers for the public as factories switched to produce items in support of the massive war effort and raw materials became scarce. After the cessation of hostilities, the slow rise in the popularity of sneakers resumed. Another major brand, Puma, was also founded at this time after Rudolph Dassler split with Adi Dassler in a feud. Rudi Dassler set up shop across town and the Puma brand was born.
The 1950’s witnessed another increase in the amount of leisure time available to families. The Baby Boom began and sneakers officially became the choice shoe for American youth as school dress codes relaxed. Hollywood officially sanctioned this fashion with a string of movies featuring actors in sneakers, including James Dean and his Converse Jack Purcells in West Side Story. Sales of sneakers soared to 600 million pairs a year in 1957, leading leather shoe manufacturers to issue ads claiming that sneakers were bad for children’s feet and the sneaker manufacturers to respond with claims that sneakers cured the syndrome of “inhibited feet”.
Sneakers were imported from Japan in the early 60’s, but accounted for only a small portion of the market until Nike founders Phil Knight and Bill Bowerman began importing Tiger shoes under the name Blue Ribbon Sports. Sneakers came into their own in the 70’s as jogging became the new fashionable sport and created a need for a special shoe used just for the purpose of jogging. Technology created a need for exercise apart from work and the shoes to perform this exercise.
Until this time, manufacturers had been concerned with high production, but now they began to focus on marketing shoes for a lifestyle purpose.
Shoes for walking, running shoes, football shoes, basketball shoes– every sport needed its own shoes- and then you needed another pair of sneakers for just casual wear. By the 80’s, sneakers were everywhere. Woody Allen wore them to the ballet, Led Zeppelin wore them in their 1976 documentary, and Dustin Hoffman wore them while playing reporter Carl Bernstein in the movie All the President’s Men. The shoes originally developed for sports became the mainstay for most people. Nike and Reebok were the market leaders while older brands Adidas and Converse were nearly in ruins. Newer companies came in and out of fashion and the industry began shelling out large amounts of money for sports endorsements.
A major footnote in the Sneaker Era is the signing of basketball player Michael Jordan to a contract with Nike to produce and endorse his own signature line of shoes. Today, the Nike Swoosh and the Jordan Jumpman are icons and require no introduction.
Sneaker collectors, called “Sneakerheads”, use sneakers as fashionable items. Casual sneakers like the Air Force One (Nike) or Superstar (Adidas) have become icons in today’s pop culture. Artistically-modified sneakers can sell for upwards of $500.
When it comes to sneaker technology, shoes are divided into three major areas: the upper, the midsole, and the outsole. Depending on the materials and combinations used, one model of sneaker can vary greatly from another.
Uppers, the top part of the shoe with the laces, fancy designs and bright colors that holds the shoe together, usually come in one of three materials, leather, synthetic leather, and mesh. Special editions, retro and vintage models, Converse and casual shoes like the Nike Vandal, the Air Force 1, and the Nike After Party for women may have a canvas upper. The most famous shoes to have an all canvas upper are the Converse All Stars.
Midsoles are used to cushion and provide support and protection for the foot. There are four types of materials used in commercially produced sneakers. Midsoles are often constructed of a combination of materials. Midsole materials are Phylon, polyurethane, Phylite, and EVA.
The outsole, the part of the shoe that comes in contact with the ground, provides durability, and it is the first stage of cushioning for the shoe. Patterns on the outsole vary according to the needs of the sport. The five most commonly used materials for outsoles are as follows:
List of athletic shoe brands, large brands include: