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Research Paper - MRKM50 (Nike vs Adidas)
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During the 1960s, adidas was the world's leading sports footwear manufacturer. Based in Bavaria and with a history stretching to the 1920s, the company dominated elite sports through aggressive promotion and innovative shoes that catered to athletes' needs. The ‘Superstar’ is one of the company's most successful models, still in production over 40 years since its launch in the late 1960s. Designed to wrest control of the basketball market from American rubber companies, in the two decades that followed it developed cultural meanings far beyond those envisaged by adidas, becoming associated with hip hop, a youth music and subculture born in 1970s New York. Arguing that design is shaped by use and consumption is allied to practice, this article examines the processes by which the ‘Superstar’ came into being, placing it into a wider context of changes within basketball, corporate ambition, and international trade. Tracing the actions and influence of young consumers in New York, it also considers how new ways of thinking about the shoe arose, spread, and were eventually commodified by adidas. It argues that a product's meaning can never be fixed, that producers and consumers are engaged in a constant dialogue over how things are used and perceived.
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This analysis highlight that female consumers have adopted masculine values as a result of societal development towards equality between the genders, which is reflected in the current female fashion trends. Furthermore, the postmodern female consumers seek independence and uniqueness, which can be obtained through the unisex clothes, because it allows the wearer to individualize the clothes and, thus, communicate one’s personal identity. Additionally, male fashion consumers have developed along with the diminishing gender roles. Thus, it has become socially accepted for men to take an interest in their appearance, which has allowed the Metro sexual man to emerge. This has created a new male consumer who strives towards differentiation and authenticity.
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Strategy is about the most crucial and key issues for the future of organizations. Strategy is also important to explore several strategic options, investigating each one carefully before making strategic choices. The study incorporates a rigorous and systematic effort to uncover the strategies and its impact on the company's performance by analysing case studies, articles and the annual report of Nike Inc. and Adidas Inc. The study attempts to find out the relevance of the strategies adopted by these companies, which are globally successful athletic apparel companies in the context of Bahrain. The findings of the study highlight Nike's strategies which focus on innovation and emphasis on its research and development department, provision of premium pricing for its customers, broad differentiation strategy, market Segmentation Strategy and Closed-Loop strategy. The Adidas strategies focus on the broad differentiation, innovation, trying to produce new products, services and processes in order to cope up with the competition. It embraces a multi-brand strategy, emphasis on expanding activities in the emerging markets, continuously improving infrastructure, processes and systems, foster a culture of challenging convention and embracing change, foster a corporate culture of performance, passion, integrity and diversity. These strategies coupled with its resources and unique capabilities form the basis of sustainable competitive advantage for both the companies. INTRODUCTION: The strategy is a path towards achieving the optimum goals of individuals, groups and organizations. In addition, it leads to a best use of companies' available resources and it also guides the company to stay in a business successfully and continuous improvements for its processes. The definition of strategy could be differ from one author to another, but the most common definition is that the strategy is long term plans and approaches towards the intended visions and objectives. It is a general framework that specified the organizations' plans, policies and approaches to meets its objectives, goals and end results. The way an organization used to shape its strategies could be differentiate from other organizations in order to make its products unique and remarkable. Globally, companies formulate their strategies based on their visions and reaching the satisfaction of customer's needs, requirements and expectations. Subsequently, they use those strategies as a baseline to compare their actual performance with planned ones, to evaluate the end results and ensuring the continuing organizational excellence. There are many kinds of strategies that are pursued by the companies; Such as cost leadership, differentiation and the focus strategies (Porter, 1985), services strategies, growth strategies. Based on the goals, the companies form those strategies and they rank them upon the priorities. It is more than important for any organization to put strategies and not any strategies; the correct strategies which are formulated after a long time of studying and after numerous number of brainstorming among the top management members. Therefore, those strategies then to be implemented by converting the organization's plans and policies into real actions through the best use of available resources such as: human resources, budgets and technological advance; in order to enhance the organization's performance, productivity and sustainability.
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Comparative Analysis Of Nike And Adidas
A final year project on “Comparative Analysis Of Nike And Adidas” was submitted by Srashti Kumari (from Galgotias University Greater Noida, Uttar Pradesh) to extrudesign.com .
INTRODUCTION
industry overview.
Indian leather industry is the core strength of the Indian footwear industry. It is the engine of growth for the entire Indian leather industry and India is the second- largest global producer of footwear after China.
One of the major factors for success in niche international fashion markets is the ability to cater to them with the latest designs and in accordance with the latest trends. India has gained international prominence in the area of Colours & Leather Texture forecasting through its outstanding success in Europe. Design and Retail information is regularly made available to footwear manufacturers to help them suitably address the season’requirementsnt.
The Indian Footwear Industry is gearing up to leverage its strengths toward maximizing benefits.
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In the 1970‟s, the Government initially banned the export of raw hides and skins, followed this by limiting, then stopping the export of semi-processed leather and encouraging local tanneries to manufacture finished leather themselves. India is now a major supplier of leather footwear to world markets and has the potential to rival China in the future (60% of Chinese exports are synthetic shoes).
The potential is ready to change albeit slowly, but with a population rivaling China for size, there is no doubt the tussle for world domination in footwear supply is between these two countries.
RESEARCH OBJECTIVES AND METHODOLOGY
Research objective, methodology, primary data, secondary data.
The secondary data for this study has been obtained from international journal and company website.
DATA COLLECTION METHODS:
Questionnaires.
Questionnaire prepared was open-ended, structured, and disguised.
Interviews were pre-planned (after taking an appointment with them in many cases) very formal and structured.
DATA INTERPRETATION & ANALYSIS
2. Brand preference
5. Visits to the outlets
7. Customer Satisfaction with services provided by the company?
RECOMMENDATIONS
Limitations, conclusions & implications.
Despite what may be higher costs, Adidas has chosen to stay with their right codes and Standards of Engagement instead of still be associated with subcontractors who treat works in inhumane ways. As Adidas has grown worldwide, it’s had to cater to problems of heterogeneity vs. homogeneity. In other words, in an increasingly heterogeneous and global world, diversity within the workplace has looked as if it would emerge as an controversy. Companies, including Adidas aren’t any longer homogenous within the sense that their companies have grown worldwide. And as a result, Adidas has had to form worldwide headquarters and produce information and products in several different languages. Having to spread its workforce, Adidas has come to depend on intangibles. The knowledge, worldwide experience and variety that an Adidas employee can bring to the table are valuable. Recently, how successful companies are in the global world is increasingly derived from intangibles, such as these, that organizations cannot own. Adidas is greatly tormented by these external influences since indeed it is a worldwide company. For a few it’s not common knowledge that Adidas may be a German company. This can be a result of good global business. Adidas has created a product that is global and thereupon diversity and knowledge greatly affect the corporate.
India has a booming garment and shoe market. In various cities there, new shopping malls have sprung up one after another and sellers compete to exhibit latest products while consumers exhibit eager demand for brand products. Many brands expand their businesses through franchised operation, particularly garment and shoe brands. By 2012, franchised operation is expected to hit 6% in growth rate, amounting to USD 17 billion in total value. This means that this market will create substantial opportunities related to franchised operation.
Organized retail scale in India only occurs recently. Adidas is one of the first brands to implement franchised operation and currently, almost all sports shoe brands, including Reebok, Adidas and Nike, are operated in this mode. Indian high- end sports shoe and garment market is expected to achieve 20% growth rate this year.
Credit: This final year project on “Comparative Analysis Of Nike And Adidas” was submitted by Srashti Kumari, BBA, School of business from Galgotias University Greater Noida, Uttar Pradesh).
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Nike Vs. adidas: An Undisputed Leader
- Nike and adidas are the two biggest sportswear companies.
- Nike's scale is a big advantage, adidas doesn't even come close.
- adidas looks cheaper than Nike and has been a better growth story, but there is a reason for Nike's high valuation.
- Nike is better managed than adidas and has a stronger brand.
- Nike is a better long-term buy, in my opinion.
Wen Sen Tan/iStock Editorial via Getty Images
Nike ( NYSE: NKE ) and adidas ( OTCQX:ADDYY ) are the two biggest footwear companies in the world with $182 billion and $36 billion respectively. Despite the fact that new players have entered the market in recent years, a small number of heavyweights still dominate. Nike and adidas were able not only to maintain their positions but also to grow several times over the past 10 years. The competition between brands is a driving force for both companies.
Although it looks like these companies have identical business models, there are very big differences between these two.
In this article, I will be comparing adidas and Nike from the perspective of a long-term investor.
Nike is the biggest sportswear company in the world. Its worldwide annual revenue was $44.53 billion in 2021. On the other hand, adidas made $25 billion in the same year. The American company had made almost twice as much as the German giant did in revenue. This gap has increased massively as Nike's revenue was only 1.43x larger.
Figure 1 (chart by author)
When it comes to gross profit, Nike has a battle chest of $20 billion. adidas only has $12.7 billion.
Figure 2 (chart by author)
Nike also holds onto more than 13 billion dollars in cash. That's more than adidas, Puma, Asics, Under Armour ( UA ) ( UAA ), Sketchers and Anta have combined. adidas didn't even come close with its $3.4 billion. It is a $9.6 billion difference.
Figure 3 (chart by author)
Reinvesting profits with high efficiency and massive cash flow allows Nike to launch new projects and continue organic growth. For example, thanks to its size, Nike was able to open a whole lab that works with athletes to help them perform better and get a feedback about new products.
Nike controls more than 25% of the global athletic footwear market. Although the shoe market is not limited in size and new players can enter every month, Nike's scale still creates a huge competitive moat.
adidas is huge too as it outpaces small- and middle-sized companies. But since it is the second biggest player in the industry, it needs to face the number one. And adidas loses the battle to Nike in terms of size by every known metric. It controls about 15% of the market.
Figure 4 (chart by author)
It is not possible for adidas and other competitors to take a large market share away from Nike since the sportswear giant can just overspend them all.
Valuation & Growth rates
Nike has historically been more expensive than adidas. Its current P/E ratio is 31.9 vs. adidas' 17.7. The market gives these two companies premium valuations. The apparel and shoes industry P/E right now is 12.5. (As of 06/03/2022)
Figure 5 (chart by author, gurufocus.com)
Source: gurufocus.com
adidas looks cheaper by every metric.
We should also look at the growth rates. Earnings growth has a big impact on the valuation of the company. adidas has always been a better growth story than its American peer. Its net income has doubled over the last five years and has been growing at a CAGR of 15%.
Nike has been growing slower over time. The net income has increased by 35% and has been growing at a CAGR of 6.2%.
Figure 6 (chart by author)
This growth was fueled by strong sales in the US where adidas saw a tremendous comeback.
Figure 7 (chart by author)
We should also take a look in the future though. Future cash flows also have big influence on the valuation as the more rapidly earnings are expected to grow in the future, the bigger valuation the company gets.
adidas is expected to see a diluted EPS of $15.03 in 2025. That makes a 4-year CAGR of 15.2%. Nike's EPS, on the other hand, is projected to rise to grow to the $5.97 mark at a CAGR of 13.8%. Not a big difference.
We should also keep in mind that this is a basic scenario for Nike. Wall Street has historically been wrong about Nike's actual performance. In fact, the average 5-year spread between actual EPS and Wall St. estimates was 22.6%.
Figure 8 (chart by author, estimize.com)
With that being said, Nike can see an EPS of $7.3, if Wall Street is too pessimistic about the future.
So these two companies have more or less similar growth opportunities but Nike is more expensive. Why? The answer is simple - Nike is more efficient. The American giant provides more value to the investors than its German peer.
Nike has a higher net profit margin of 13%, while adidas only has 9.6%.
Figure 9 (chart by author)
Nike also outpaces its competitor when it comes to operating margin:
Figure 10 (chart by author)
adidas' gross margin is higher, but this is due to a higher share of the apparel in their revenue.
Figure 11 (chart by author)
Figure 12 (chart by author)
High efficiency that Nike works with helps explain the higher valuation that the company has.
adidas has been growing more rapidly than Nike over the years. But where did all these sales come from? The answer is simple - adidas started to care about its brand, while Nike's big brand name is easy to understand
They have signed lots of non-athlete celebrities like Beyonce, Ninja, Kanye West, Donald Glover, Pharrel Williams and many others in order to attract young consumers. They also invest heavily in their own channel trying to reach 50% of DTC by 2025. But it looks like they struggle with one thing - to connect with customers. Don't get me wrong, adidas has done a pretty good job there. But it's not anywhere near Nike when it comes to branding, innovation and unique customer experience. It seems like the bet is on lifestyle apparel as they turn themselves into a fashion company and that actually reminds me of Puma's times when they were under Kering's roof and struggled to find the balance between sport and lifestyle. I'm not saying this will be adidas' future, but the result of betting on pop culture is that consumers feel loyal to the celebrity, not the brand.
Of the 2021 top selling shoes , 9 out of 10 are performance Nike sneakers for basketball and running - two of the main Nike community bases, while the eye-catching one is adidas NMD R1, which are lifestyle shoes. I actually think that says a lot about Nike and adidas competition.
I think that the adidas brand is not as strong. Therefore, adidas' plans for the future remain unclear.
Management structure
Next, I want to talk about the management structure. Nike's organizational structure is a matrix structure. That means that an employee reports to several managers instead of one. Nike has used this structure for more than 20 years.
This helps to quickly solve problems and respond to consumer needs as departments work closely together and communicate. It brings efficiency and reduces the chances of making mistakes. It is up and running and basically means that the business is in a good shape from the inside since there are no work conflicts or confusion when one man does several jobs. That also means there is no lack of coordination between the departments. That's the reason why Nike is so effective in transforming business to the customer needs.
Figure 13 (chart by author)
adidas uses a hybrid management structure. A hybrid structure is a structure that companies use to avoid the shortcomings of other structures. A hybrid organization combines the characteristics of functional, product, regional, horizontal, and modular structures.
The main strength of the hybrid structure is that it enables the organization to easily adapt to the environment, as well as to be highly effective in each product line in conjunction with the effectiveness of each functional unit. The hybrid structure combines the goals of production and the overall corporate development goals of the organization.
Figure 14 (pinterest.com)
However, this structure implies that coordination between departments takes a lot of time, which in turn does not allow the company to quickly respond to customer requests. That is very important in the shoe industry.
With that being said, I think that Nike is much better managed.
Nike is a much better long-term buy in my opinion. Nike is big, fast-growing, well-managed and has a strong brand. adidas works in an uncertain environment. It is a smaller and worse-managed company with a weaker brand than Nike.
Nike is already an undisputed leader of the industry, while adidas still has a long way ahead to reach Nike's level.
This article was written by
Disclosure: I/we have a beneficial long position in the shares of NKE either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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Nike vs Adidas: Who is Leading the Market?
If you are an adventurer, a good pair of sneakers is a must for you in your life. The best part is, it can be worn with any kind of clothes that you decide to deck up with. You can never go wrong with sneakers as they are comfortable and stylish enough to lift your style quotient. Sneakers can be worn with almost anything, they are extremely versatile and the comfort that they provide is matchless.
When we talk about sneakers, sports shoes, apparel, or sportswear there are two prominent brand names that ring almost together. They are none other than Nike and Adidas . These two renowned multinational corporations from two different continents - USA and Europe, have been hot favorites in the category of sneakers and sportswear since forever. Almost everyone has an idea or has at least heard of these two brands. Furthermore, growing in the same niche, Nike and Adidas have always been obvious competitors/rivals in their space. Both of them focus on sportswear and the shoes are what they are specialized in. However, over the years, both the US and German sports labels have maintained two recognizable brands around the world. Yes, financially Nike is known to be much larger than Adidas, but the latter’s performance has been better over recent years.
Both companies have a long history of producing high-quality athletic gear, footwear, and accessories, and have gained a loyal following of customers who appreciate their commitment to innovation, performance, and style. But when it comes to choosing between these two powerhouses, which one comes out on top?
In this blog, we will explore the differences between Adidas and Nike, taking into account factors such as history and growth, technology, business model, future plans and more. Whether you're a seasoned athlete or just looking for stylish casual wear, this comparison will help you determine which brand (Nike or Adidas) is the better fit for you.
Comparison Between Nike and Adidas:
- Nike vs Adidas: History and Growth
- Nike vs Adidas: Technology Difference
Nike vs Adidas: Business Model
- Nike vs Adidas: Marketing/Branding Strategies
- Nike vs Adidas: Financial Snapshot
- Nike vs Adidas: Production and Suppliers
- Nike vs Adidas: The Cool Factor
Nike vs Adidas: Sports Sponsorship
- Nike vs Adidas: Future Plans
Nike Vs Adidas: The Real Battle
History & growth of adidas and nike, adidas history and growth.
Adidas is the largest sportswear manufacturer in Europe and the second-largest in the world after Nike. Formerly known as “The Dassler Brothers Shoe Factory” , the company was founded by Adolf Dassler and Rudolf Dassler in 1924. The founders being sports enthusiasts began to make sport-oriented shoes that could improve the performance of the athletes in any sport.
Later in 1949, the two brothers broke their relationship which led to the creation of Adidas by Adolf Dassler and Puma by Rudolf making them the biggest business rival at that time. Adidas was named after the initials of Adolf Dassler's while the logo of three stripes was taken on as a shoe design on the company’s shoes for better comfort.
In the 1970s and 1980s, the company continued to grow with the introduction of innovative technologies and a strong commitment to sustainability. In the 1990s and 2000s, Adidas expanded into international markets and made several acquisitions to further strengthen its position in the sportswear industry.
In 2017, Adidas made an annual revenue of 21 billion euros and has a brand value of 7 billion US dollars. In the same year, Adidas employed 5,888 people worldwide and generated 50% of its sales in the footwear category. Adidas is much smaller than Nike in the terms of what its customers are looking for and trying to find a bigger audience in North America. With their logo “Impossible is nothing.” Adidas net worth as of December, 2022 is $25.64B .
Nike History and Growth
Nike is an American multinational company that is the world’s largest athletic shoes and apparel manufacturer and supplier. Originally known as “ Blue Ribbon Sports” it was founded by Bill Bowerman and Phill Knight who was a track athlete in 1964 before becoming Nike in 1971. The name was taken from Nike, the Greek goddess of victory. The company was first made as a distributor for a Japanese shoemaker Onitsuka Tiger. Bowerman then made his first shoe for Otis Davis who later went on to win two Olympic gold medals in 1960.
Blue Ribbons Sports sold 1300 pairs of Japanese running shoes with a gross of $8000. While its first advertisement gave its tag name as “There is no finish line” which was changed to “Just do it” in 1988 . As per the statistical records of 2021, Nike is valued at $30.44 billion and leads the world as the number one brand in the sports business.
Nike experienced rapid growth in the 1970s and 1980s with the introduction of innovative technologies such as Air cushioning, as well as the "Just Do It" advertising campaign. In the 1990s and 2000s, the company continued to grow through international expansion and acquisitions of other brands.
When it comes to Nike, it is the most valuable sports brand in the world and especially in North America. Unlike Adidas, Nike's first target audience is the people of North America and they also have strong marketing and sponsorship agreements to back it. Making it the reason behind Nike getting 30.57 billion euros in revenue in 2017. In 2006, however, Nike was still the leading with 13.44 billion euros while Adidas made 10.08 billion euros. In 2015, Nike also won the bet against Adidas and became the next exclusive provider of uniforms to the NBA. Nike's total global revenues of 2021 were reported to be $44.54 bn, as of December 2021.
Technological Difference between Nike and Adidas
Nike technology.
Nike uses lighter materials to make its shoe lightweight and is made of polyester, rubber, and cotton. With that, it uses ZoomX technology , so that consumers can experience good speed during running. Nike shoes have holes in their toe cap which makes them breathable and is hygienic for feet as well. Nike shoes provide amazing designs. Nike does make more business than Adidas but the customer reviews have deteriorated and there has been no innovation that has been as big as Yeezy's which is under Adidas.
Adidas Technology
Adidas always believes in putting quality over quantity and gives more importance to customer satisfaction. Adidas talks to many athletes about their preference and comfort to then implement it into their design. This was the reason for them to innovate Boost technology which is an innovative cushion technology that includes a TPU (Thermoplastic Polyurethane) that compresses under pressure.
Adidas Ultra Boost shoes weighed a little more than Nike shoes. The shoes consist of a full-length midsole and made it feel like a cushion-type material is present while wearing it. It focuses more on comfort and gives out more energy on every single stride. It also provides run toe padding for its shoe models for comfort. This instantly bounces back to its original form and in shock prevention which helps the athlete in a more consistent run. Some of the famous shoes made by Adidas are the Y-3 collection, Ultra boost, Gazelle, Supernova, etc.
Nike Business Model
Nike is a leading sports apparel manufacturer ruling the industry for some decades now. The main focus of Nike has been an aggressive approach towards building strong and promising networks and partnerships with celebrity athletes. To quote an example is to mention the exclusive contract that the company bagged with Michael Jordan when the latter signed it in 1984. This grew to be one of the most iconic partnerships in the sportswear industry and has benefitted both of them. On one hand, Michael Jordan witnessed tremendous growth in his net worth, and on the other hand, it gave Nike a lead and a total monopoly in the basketball sneaker business. Besides, it also helped increase the overall demand for common stock ownerships.
The American sportswear brand has already shifted from traditional media advertising and hugely focus on social media advertisements and campaigns. Nike concentrates on the athletes who display a high ROI going by their social media profiles. Furthermore, the company chooses the teams that are the most talked about and display the most engagement going by the core fans on their social media accounts.
Nike has largely focused on digitalization ever since it saw all the opportunities of growth it can enjoy there. It has revamped its marketing and products as well to embrace the age’s demands. For example, it rolled out the FuelBand, a $150 electronic bracelet, designed to measure a person’s movements throughout the day whether he/she is engaged in sports, swimming, jogging, or walking. This is a clear nod towards developing a digital force that Nike is aiming for now. One other thing that the company is eyeing is to reduce the production costs and make its products environment-friendly. Flyknit Racer is an exemplary product from Nike in this line.
Adidas Business Model
Adidas’s business is inclined towards creating innovative products that are crafted to suit the needs and increasing demands of the consumers. Adidas doesn’t believe in forming partnerships and invests less in its product endorsements , instead, the company is more focused on creating value by building products that are high in performance a nd are created with an eye on the specific needs of commoners and athletes. Furthermore, it also concentrates on its production rate, the available infrastructures, and the latest technologies that it can adapt, which Adidas constantly re-evaluates and expands. Moreover, the brand also puts efforts in reducing the complexity on a group level by streamlining the global product range. Consolidating the base of the warehouse harmonizing above market-service are some other things that Adidas is often involved in.
Adidas aims to deliver the best-branded shopping experiences at all consumer touchpoints. The company has also brought in innovative speed models in the supply chain, which helps it respond quickly to consumer needs. These are some of the Adidas strategies that have motivated investors from all around the world to purchase Adidas common stock. Besides, the company has also shown promising growth here for many years now.
Marketing/Branding Strategies of Nike and Adidas
Marketing/branding strategies of nike.
On diving into the marketing strategies of Nike the first thing that will pop up in your mind is the dominant hold of the market that Nike exercises. The brand believes in maintaining a strong brand image, where it is prominently remembered as a sportswear brand. Nike is capable of pulling it off with the help of numerous smart marketing strategies that the brand implements. Here’s a quick look at all the key marketing strategies of the brand:
- Positioning of Products - Throughout history, Nike has positioned its products with utmost care. For example, it sells “athletic shoes” for the sportsperson, which helps it capture the niche market easily. Going by the market segmentation of Nike, the company targets athletes, sportspersons, and others who are eager to join the sporty or healthy lifestyle.
- Creative Ability of Storytelling - Nike has heavily relied on its storytelling abilities. The brand, as it was founded by athletes, also has an authentic background or a credible story that backs it up. Yes, Nike founder Bill Bowerman is the person who has first implemented this incredible idea of telling real stories. Back then he was a track and field coach during Nike’s initial days when Bill wrote stories for his own products that helped the company connect with its audiences.
- A Focus on Social Media Marketing - As soon as Nike discovered that most of its audiences are there on social media platforms , the brand decided to target various social media platforms. This helped Nike witness rapid growth over social media platforms and in revenues. Here are some key highlights of the social media strategies: It focuses on user-generated content, Nike works out collaborations with celebrities, The company often engages with the users on social media, Nike attracts influencers and allows them to promote the brand.
- Makes for Easy and Hassle-free Purchasing via its Website - Nike has decided to build an easy and effective website that categorizes all the products neatly in an easy-to-use interface. The website of Nike brings out the bold and fearless attitude of Nike users, which Nike boasts of. Nike also has smart product recommendations on its website, which makes it easy for the purchasers to make their decisions.
- Loyalty Program - Nike has a loyal group of over 100 million members who have been recorded to have spent 3X more time on their website than the guest buyers. Nike used this data to stress their loyalty programs and have magnified their loyalty programs.
Marketing/Branding Strategies of Adidas
Adidas has rapidly progressed in the past few years by leveraging smart marketing strategies. The brand has notably grown at a rate of 17.6%, thereby adding nearly $5.8 bn since 2015 when compared to Nike’s addition of $4.3 billion at an average rate of 6.8%. Here’s a list of all that Adidas leverages, which helps keep the brand ahead of its peers:
- Digital Marketing Strategy and Technical Advancements - Adidas’ straightforward digital marketing strategy and its laudable implementation is the power behind its success. A fast-growing e-commerce channel , digital production processes, and the quick adaption of technological advancements help the company gain a considerable amount of revenue along with helping it engage with its consumers.
- The pace of Production - Adidas boasts of its speed of production, which is completely digitalized and empowered with the latest technology of 3d printing and robotics at Speedfactory in Ansbach.
- Relationship with the customers - Adidas’ customer relationship is unparalleled. The company is there on the leading social media channels and keeps a constant engagement alive with its customers.
- Commendable collaborations and partnerships - Adidas calls in creativity. The company opens its doors and lets out an open call for all the sportsmen and other consumers from all around the world who have a creative bent to collaborate with the brand. The “Calling All Creators” campaign is one illustrious example of such initiatives of the brand. Furthermore, Adidas also collaborates with renowned football players, singers, and athletes to inspire its consumers and target customers.
- Strategic cities of operation - The cities that Adidas has decided to run its operations include London, Los Angeles, New York, Paris, Shanghai, and Tokyo, which have been strategically important for its growth.
Revenue of Nike and Adidas
Nike revenue.
Nike has bagged in revenues close to $37.4 billion in FY20. Nike has recruited and has over 75,400 employees working for them as of 2021. It is clear that Nike is the biggest sportswear brand and is a market leader to whom most of the other brands operating in the segment lookup. Nike has recruited and has over 73,300 employees working for them as of 2021. It is clear that Nike is quite big and is a really strong competitor of brands that deal with sportswear.
Adidas Revenue
The revenues of Adidas have been reported at $11.15 bn in FY20. Adidas has an employee strength of 22,037+ employees when last reported in 2020. Adidas is one of the largest players operating in the sportswear segment that gives a strong competition to Nike. The company’s revenue has been reported to be around $6.78 billion in the quarter that ended in September 2021. Adidas has an employee strength of over 62285 people.
Production and Suppliers of Nike and Adidas
Nike production and suppliers.
Although Nike is an American company just like its competitor, the shoes are not made in their own country. It has over 523 factories spread in over 40 countries and shoes and made in mostly China and Vietnam. Chinese manufacturers supply 23% of all Nikes production while Vietnam contributes 16% of Nikes total production which mostly constitutes creating apparel and footwear.
Adidas Production and Suppliers
All the shoes from the brand Adidas are specially made in China, India, Atlanta, Indonesia, Thailand, Vietnam, Turkey, Germany, and Atlanta US. Adidas has over 500 factories in over 55 countries. The majority of shoes are made in the countries situated in Asia, like Vietnam, Indonesia, and China. Vietnam produces 44% of all Adidas footwear, followed by Indonesia at 25% and China at 19%.
Cool Factor of Nike and Adidas
The cool factor here refers to the collaboration with music and celebrities or other influencers. Adidas seems to be winning in this category as its athleisure collaborations with Kanye West and Beyoncé as compared to Nike more sports-focused approach with sponsoring some of the biggest names in the sports category like Serena Williams, Roger Federer, Tiger Woods, Kobe Bryant, and Lebron James, it has created some noise.
With athleisure becoming a new trend Adidas is trying to win the market by this approach. Kanye West is the best example of this because with the help of Adidas he has now built a billion-dollar Fashion Empire through his sneaker brand Yeezy.
Whereas Nike's main collaboration till now has been with the basketball veteran Michael Jordan whose Air Jordan line of trainers for it holds the top spot for celerity sneaker brands generating more than $3 billion in sales every year . But the first Jordans were launched in 1985 which is why it has lost its cool factor. The Celebrities that support Adidas are David Beckham, Pharell, Novak Djokovic while Nike's supporters are Drake, Roger Federer, Cristiano Ronaldo , etc.
Sports sponsorship has been the main activity of both the companies and has a history of being a part of numerous famous sports events. Nike is known to be the main provider of apparel, footwear, and uniforms of the NBA league most of the time.
In 2018 however, Adidas sponsored way more than Nike in the Football world cup. Where 12 teams wore the brand Adidas, 10 teams signed up for Nike. Adidas boasts the current World Cup holders Germany, along with Argentina, Spain, Belgium, Colombia, Egypt, Iran, Japan, Mexico, Morocco, Russia, and Sweden.
Both Companies have always competed on who will get to sponsor more teams especially in events like the FIFA World Cup, Olympics, and NBA basketball games.
Future Plans of Nike and Adidas
Nike is now looking to raise its revenues to cross the $50 billion mark, as per the statements of the Nike CFO Matt Friend. As with previous years, Nike is pivoting on its digital and DTC segments. The company is currently hoping to make 50% of its operations digital-driven by 2025. On the other hand, climate neutrality is one of the primary things that Adidas is currently aiming at. The brand is presently looking to achieve climate neutrality in its own operations by 2025 and bring in climate neutrality on a global scale by 2050.
To be specific there is this timeless battle going on between the best sneaker brands of the world. The battle started in 1976 when Nike hired John Brown and Partners as their advertising agency. Nike emerged itself into aggressive marketing and took 60% of the athletic shoe market in its grasp. When in 1988 Nike started the ' Just do it ' campaign, it become one of the best ad slogans of the 20th century.
In recent times, more specifically in 2014, Adidas partnered with Ye formerly known as Kanye West, who claimed that his Yeezy Boost shoes are way better than Jordan Sneakers. This thing escalate the rivalry as people started leaning towards Yeezy's.
The sponsorship battle between the two is another issue. With Nike sponsoring some of the biggest names in the sports category like Serena Williams, Roger Federer, Tiger Woods, Kobe Bryant, and Lebron James, it has created some noise.
On the other hand, Adidas also showed that it is not less than anyone by sponsoring some of the biggest names from the sports and music industry . David Beckham, Novak Djokovic, Lionel Messi , Beyoncé and Ye. Reports claimed that Nike pays more to their sponsors than Adidas though.
The fight between the two sneaker giants didn't stop even in The Covid when Nike started creating face masks while Adidas created face shields.
Which Is Better Adidas or Nike?
Nike and Adidas are the two heavyweights when it comes to footwear and sports accessories. Regardless of where we belong from, most of us are attracted to these brands when it comes to sports accessories including footwear and more.
Nike has certainly an edge over its archrival Adidas. The former has owns 50% of the market share when it comes to sportswear. The advertisements and powerful celebrity endorsements including that with Michael Jordan help Nike steer past its German counterpart, Adidas in terms of the market share, revenues, and profits. The latter, though owning a lot less of the market share than Nike, is well-revered among the world of its users for its quality and longevity. Founded in 1949, the German brand is one of the oldest operating players in the sportswear industry. However, it is the split between the brothers, Rudolf and Adolf Dassler, of the Dassler Brothers Shoe Factory that resulted in the making of two different brands - Adidas and Puma. This not only divided the brothers and their business for the rest of their lives but also divided the revenues they collected. However, it is also this split of the brothers that gave the world two of the leading brands in the footwear and sportswear industry for the users.
In short, it is subjective to choose between Adidas vs Nike as it depends on personal preference which brand is better between Nike and Adidas. Both companies have a strong reputation and offer high-quality products. Ultimately, it is up to the individual to determine which brand aligns with their personal style, comfort, and performance needs.
Why is Nike better than Adidas?
Adidas has always managed to keep its audience in consideration to design its products undoubtedly, but Nike has always had an upper hand in innovation and design when it comes to the sports market.
What are the differences between Nike and Adidas?
Both Nike and Adidas are major players in the sportswear industry, but they have some distinct differences in terms of design, technology, and brand image. Nike has a reputation for being innovative and heavily focused on performance and technology, while Adidas is known for its classic and iconic designs and a strong focus on sustainability.
Adidas or Nike, which brand offers better quality products?
It is subjective as both Adidas and Nike offer high-quality products. It ultimately depends on personal preference, individual needs, and product type.
Who makes more money Nike or Adidas?
Nike typically generates higher revenue than Adidas. In 2021, Nike's revenue was approximately US $40.2 billion, while Adidas's revenue was approximately US $25.2 billion.
What is the Nike brand value?
By 2022, the Nike brand was estimated to be worth $33 billion, a growth of almost $3 billion from the prior year.
Is Nike an American company?
Yes, Nike is an American multinational conglomerate that was founded in Eugene, Oregon, US, on January 25, 1964.
What does Adidas stand for?
The name "Adidas" stands for the abbreviation of the name of Adolf Dassler, the founder of Adidas.
What is the Nike market share?
Speaking of Nike's market share, the US sports apparel and shoe manufacturing company presently dominates the sportswear with approximately around 50% of the market share.
Which brand is more popular Nike or Adidas?
Nike is typically considered more popular than Adidas. Nike has established itself as a global brand and household name, with a strong presence in sportswear and a reputation for quality products. However, Adidas has also gained significant popularity and recognition, particularly in recent years, and has a loyal customer base. The popularity of these brands can also vary regionally and culturally.
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Nike Vs Adidas Analysis
Nike equality adisement analysis.
When a person hears or sees the word America, what do they think? America is a country that almost everyone in the world knows about because there are certain words and phrases that can be used to describe it. Some common terms are sports, equality, the melting pot, powerful, freedom, hard working, and some more. All of these words make up what is known as the American Identity. This American Identity has been built up over time by people’s actions and thoughts. Many advertisements, TV shows, pictures, movies that use the American Identity to draw attention. One such advertisement comes from Nike and is called the equality ad. This advertisement uses some of these identities to express their point and connect it to a larger Identity. The Nike Equality advertisement portrays the American Identity of equality by using famous figures, battling stereotypes, and connecting to the Declaration of Independence.
Commercialism In Sports
One group had kids from the age of 10 to 13 in it the other group was slightly younger. The kids were asked how important brands are to them for different kinds of products. In this survey they also asked the kids how important it is that their sports shoes were from a brand. 73% of the older group answered that it is important to them. That’s a really high number which shows just how much the brands have made their way into the sports industry. Looking back at the survey above you might say that 45,5% still don´t care that much about their sportswear being a brand product and it is like that. But what the kids survey shows is that kids from a young age are knowing more and more about the brands and in a few years the survey above will look a lot different. I mean just look at our school sports. I would be surprised if one person wouldn´t be wearing even one brand clothing. And there are many reasons why brands are
Rhetorical Analysis Of Nike's Just Do It Slogans
All in all, nike is making advertisements that their products are the best and better than the competition. They want people to , when looking for sporting gears, see the brand of nike and instantly know that is quality and reliable products on the shelf. They used ethos ,pathos, and logos to boost their campaign in establish well known sporting product on worldwide platform. This is the way how nike has become so successful in its category. Nike is setting standards that other companies are following in sporting
Porter's Five Forces Analysis Of Under Armour
To begin with, it is crucial to identify the industry. The athletic footwear and fitness apparel industry constitutes of somewhat 25 companies which offer sportswear, sports accessories, sports footwear, and sports equipment. Some brands even offer casual wear. Competitors in the industry have relatively high prices due to their products' durability and innovated materials used in manufacturing them. Porter's five forces which will be used in the analysis below are: competitive rivalry, bargaining power of suppliers, bargaining power of customers, threat of news entrants, and threat of substitute products. A detailed analysis will be attached in the appendix (Appendix
Ratio Analysis Of Nike
This ratio is of importance to new investors and suppliers because it shows the long run sustainability of a company.
Under Armour: Competitor Analysis: Nike And Adidas
The industry that Under Armour is involved with is extremely competitive, with competing against big names such as Nike or Adidas. Although it’s hard at the beginning, but customers want to have the highest quality apparel therefore they turn to Under Armour. Under Armour stays in the competition by having high quality products, and also by signing endorsements deals with major athletes (Owusu, 2017). By having major athletes represent Under Armour, means the company will be bringing in "big money" because they will bring up the brand’s popularity. The major competitors in this industry are of course inclusive of big names such as Adidas, Nike, Dick’s Sporting Goods and Puma. These companies have been listed in many
A Comparative Analysis Of Nike And Under Armour
Nike and Under Armour are two of the largest sportswear and athletic shoe companies in the world. Their histories and growth are similar but they use different corporate and business strategies. Their strategies reflect their corporate structure and the personalities of their leadership. This compare and contrast paper will explore the history and development of these two corporate giants; conduct a strategic and financial analysis of each company; and compare and contrast the executive leadership, corporate strategy, acquisitions and divestments of each. The future direction of the companies over the next three to five
Nike Business Analysis: Internal Analysis Of Nike
In the section of R&D, Nike has a major capability and it includes the core competencies in the R&D section. The company heavily focuses and invests in staffing specialist to enhance and improve their products performance. In addition, the marketing section of Nike has an important core competency and a competitive advantage in being able to market its products. Other competitors might have the resources to contest but they don’t have the ability to use them appropriately.
Nike Just Do It Campaign Analysis
As a consumer, Nike always represents great quality and highly reliable. However, the prices are higher than other brands. Consumer feels that Nike overchanges its consumers and ought to lessen the cost of their items.
What Is Micro Environmental Factors Of Nike
Among them, The closet competitor is Adidas Group. The sales of Nike and Adidas Group are around $ 13 billion and $ 9 billion in 2012. Both companies run in the long way for market share and compete aggressively for sponsorship of major sporting events such as the Olympics. Continuing sponsorship in the Olympics will help Nike achieve rapid sales growth in the future.
Marketing Strategy Of Adidas
The Adidas Group pursues to be the leader in the sporting goods industry across the world with brands built on a passion for sports and a sporting lifestyle. For this purpose they always try to increase their brands and products to improve their competitive position. Adidas is continuously committed to the customer focus service with new innovation and design, and
Nike Consumer Behaviour
Probable factors that could affect Nike’s business judgements are a range of demographic, social, economic and political. A few have already started to transpire, though others are purely likelihoods. External factors affecting this mix is one of the most common, technology. Before Nike releases its brand new product line to the market, it’s always prepared to authorize that whether or not there has been any sort of major advances from the other competitors that would tracker its launch. Thus they must time this carefully, as other competition may demand to shadow its release with their marketing
Porter's Five Forces Fashion Industry Analysis
This is analysis looks at the sales, profits, assets and market value of each company and based on their individual success each company is ranked. As each of these companies begin to diversify from their initial product and target market competition intensifies between. For example Nike and Adidas are in direct competition with each other as both provide branded sports gear but each are beginning to move into producing less sport orientated clothing
Strengths And Weaknesses Of Nike
The price of the Nike’s product is high, but the quality is high and the market price stability. Although Nike have more than 44,000 employees worldwide and thousands of retail in the world but the price is stability. It will be easily giving the consumer make the decision in short time when buy the Nike’s product without compare with other Nike retail.
Micro Environmental Factors Of Nike
PUMA, K-Swiss Inc., LaCrosse Footwear, Inc., Dick 's Sporting Goods, Inc., New Balance Athletic Shoe and Adidas – (Adidas have currently branched out into customization of footwear products. To sustain its competitive advantage over competitors, Nike has to take this to consideration). However, a large number of competitors in an industry usually indicates lots of demand for the products or services provided and this will help Nike to succeed in the long run.
More about Nike Vs Adidas Analysis
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Nike vs. Adidas Case Study
Market segmentation is an important marketing strategy that many organizations have tried to implement. Organizations have grouped their markets based on a number of variables such as demographics, operating variables, purchasing approaches, personal characteristics, and situational factors among others. The two companies discussed in this case study are Nike and Adidas. They operate mainly in the sports footwear industry, with Nike having the upper edge in competition. They both utilize the market segmentation concept to delineate their markets. Some of their ways of applying this concept are discussed in this case study.
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Introduction
Nike and Adidas are organizations in the sports footwear industry. They have engaged in fierce competition. An important concept in marketing is market segmentation, which refers to the grouping of markets into unique segments that organizations can devise a specific marketing strategy that targets the segments (Choi, Jungwoo, & Jongsu, 2013). Companies are able to segment the market based on demographics, operating variables, purchasing approaches, personal characteristics, and situational factors among others (Quinn, & Dibb, 2010; Quinn, 2009, p. 254). One of the marketing concepts that the two organizations have used is market segmentation. This case study looks at the historical background and marketing environment in the two organizations. The case compares the use of market segmentation in the companies’ marketing strategies.
Brief background and History
Phil Knight and Bill Bowerman founded Nike, Inc. in 1962 with the aim of importing Japanese-made shoes to America, with the two partners working under the name Blue Ribbon Sports (Carbasho, 2010). The company has grown to a global market share of over 30%, which is the biggest market share for any company in the footwear industry, with over 22,000 retail outlets in the US alone. Its products are sold in over 165 countries in the world (Larson, 2011). It also ranks the top shoemaker in the world, with the main market products being the athletic footwear, equipment, and other wears (Carbasho, 2010). In 2008, the distribution of revenue in the segments above was 52% for footwear, 28% for apparel, 6% for equipment, and 14% for the other products (Carbasho, 2010). The company uses its name as the main brand name, with some of the other names used being Nike Pro, Nike+, Nike Golf, Air Jordan, and Nike Skateboarding (Nunez, 2012). The company has a trademark titled “Just do it” that has been a favorite element for many people. This trademark is one of the marketing strategies that it applies. It also uses a recognized logo that has evolved over the last few years to the level of being recognized by many people (Levin, & Behrens, 2003).
Market Segmentation
Demographics.
The aspect of demographics refers to the segmentation of the market based on the industry, company size, and location. Nike serves small and medium-sized companies as a strategy in its demographic market segmentation. For example, the company serves small outlet shops with its products. It has a series of stores that it owns such as the ‘NIKE Sydney City’ that is located in Westfield Sydney along Pitt Street. In the location aspect of the demographic segmentation, Nike serves markets mainly in the US since most of the industries are in this region, with other markets around the world only taking secondary priority such as in Dubai. It also collaborates with many companies in the United States and around the world as a means of ensuring a strong presence in this economically important area. Examples of these companies include FC Barcelona and Chelsea Football Club. The company’s contract with these organizations is renewed yearly, with the football companies making billions of dollars out of the sponsorship.
Personal Characteristics
As part of the market segmentation, the personal characteristics include the consideration of buyer-seller similarities, attitude towards risk, and the loyalty of companies that the organization engages in. Nike only sells to companies whose values are similar to its principles such as companies whose customers take risks and/or those who exhibit loyalty to their suppliers. In the use of technology, the company has developed smart shoes that are about to be marketed as an example of the commitment that it places on technology. The company is also developing special gadgets such as training watches to complement the sports shoes (Nunez, 2013). Nike is among the global American companies that are recognized for the use of technology in their supply chains. The company is in the process of developing technologically advanced design methods at its factories and in the delivery and sale of its products online. For this purpose, the company has collaborated with Amazon and Microsoft companies.
Situational Factors
Situational factors refer to the elements that organizations apply when they wish to take advantage of situations to market their products. The use of situational factors as a market segmentation strategy includes consideration of urgency, specific application of the provided products, and the size of orders. Nike mainly does business with organizations that have no urgency in demand. However, in situations where these organizations require services urgently, the company is able to provide at the same rate. The company has also focused on specific use of its products by engaging mainly in the production of sports shoes and appliances. It also focuses on large orders as opposed to small ones since it has the capacity to provide such orders. Some of the examples of companies that Nike supplies large orders include outlets such as Wal-Mart.
Operating Variable
This form of market segmentation involves the application of technology, customer capabilities, and the use or non-use of the products being provided by the company. The company serves medium and heavy users of its products, with sporting teams such as those in the NBA being large users of its products. In terms of customer capability, Nike provides services to organizations and individuals who need only the services that it provides. Clients who need many services including different brands of shoes are also served although they are fewer. In the use of technology, the major companies that Nike has collaborated with include the Apple Computer Company and Fuel band.
Purchasing Approaches
This refers to the categorization of markets to be approached by an organization based on the power structure of client organizations, their purchasing policies, and the purchasing function. In the purchasing function organization, Nike serves organizations with a centralized purchasing structure such as Barcelona FC, Liverpool FC, and a number of retail stores such as Wal-Mart. In power structure, Nike serves organizations that are mainly financially dominated as opposed to being engineering dominated. Examples of the organizations that are financially dominated in the relationship with Nike include Chelsea FC. In the nature of existing relationships, Nike has established relationships with a number of organizations with which it does business including those mentioned above such as Barcelona FC. However, the company also goes for the most desirable organizations to engage with without mostly having to consider the existing relationship. An example is its engagement in e-marketing in collaboration with Google and Microsoft organizations. These two organizations also prefer working with Nike under service contracts instead of leasing. This link is a good example of the general purchasing policies that Nike applies. In terms of purchasing criteria, Nike markets itself as a company that is dedicated to quality. Hence, it approaches companies seeking quality including basketball teams such as The Lakers of Florida.
Brief Background and History
The German Adolf Dassler founded Adidas after the end of World War I. He used scarce materials at the time to achieve his dream of equipping sportsmen with the right shoes for their respective ports. The company grew to employ over 100 people by 1930. It was able to withstand the effects of the Second World War with the reputation of making the best sports shoes. Dassler later renamed the company as Adidas after the war. He proceeded to make shoes that made his country win the World Cup in 1954. Currently, the corporation has beyond 30,000 employees throughout the globe, with approximately 2500 of them being stationed at its main offices in Herzogenaurach, Germany.
Just like Nike, Adidas serves customers in the sports footwear industry, with limited services to other industries. It also serves companies in these industries, with the main companies served being the sporting organizations. One of the strategies that Adidas uses in market segmentation is geographic marketing where it is able to market specific products to some prioritized geographical areas. For instance, the company marketed the soccer shoes in Europe because the sports industry is popular there as compared to North America.
Operating Variables
In terms of technology, user-non user status, and customer capability, Adidas has managed to put in place several measures. Some of these measures include the introduction of technology that is related to sportswear. An example on the use of technology is the smart watch that the company is in the process of developing to match the sports footwear it makes. Adidas also serves heavy and medium users of its products. Unlike Nike, Adidas serves customers who require many services although they are related to the sporting industry. An example of psychographic segmentation as an operating variable is the brand marketed by Adidas under the brand name ‘Rebook Original’ that is meant for enthusiastic Rebook fans.
Adidas has applied a number of personal characteristics of its customers to develop market segments (Adidas Industries, 2011). Adidas only serves organizations that have similar services and products together with customers who have the risk-taker element such that even if they are new to Adidas, they are not afraid of purchasing from it since they are assured of quality products at the end of the day. The companies that Adidas focuses on are those that show loyalty to suppliers. These companies can be found in the sporting arena, and hence the reason why most of the clients are sports enthusiasts as evidenced in the interests that Adidas shows in sports teams. It also supports several soccer clubs in the various football confederations around the world including “Chelsea FC, FC Bayern Muenchen, and Liverpool FC” (Quinn & Dibb, 2010, p. 1245).
The situational factors in the market segmentation including the manufacture of products for specific applications are practiced in Adidas. For example, the company embarks on the production of technologically advanced products such as the proposed ‘smart shoe’, which is developed based on the response that the development of similar products by Nike has had on its markets.
The organizations that Adidas serves are highly centralized and financially dominated. The organizations include outlets and large holding companies. The companies served are those that have strong relationships with Adidas, with all the purchasing policies such as leasing, contracting, and systems purchase being applied. Adidas markets itself as a quality company whose policies include service to companies that seek the provision of quality products. The promotion of performance gear brands has been established as a way of reaching the youthful cohort that is more energetic compared to the grown-up folks.
Similarities
The use of demographic segmentation is the most evident strategy in both Nike and Adidas. These companies have applied age as one of the demographics in their marketing (Quinn, & Dibb, 2010). Both companies market their products to the young generation, with a significant proportion of their sales taking place. Both companies have the American market as the prime target in many commercials. These two companies have similar strategies in the use of personal characteristics and situational factors in their market segmentation strategy. In the use of personal characteristics as a factor in marketing segmentation, the companies have targeted the young by adopting technology as an important component in their products. The companies sell to other companies and individuals with similar values such as risk taking and/or one who show significant loyalty to suppliers. The companies are also recognized as sponsors of the major sporting events in the world, with an example being the FIFA World Cup and the Olympics. They have several teams and sporting personalities under their sponsorship such as Ronaldo to ensure that they are able to compete with each other as they try to remain on top of the competition. Both companies have targeted the sports industry as their main market. Both have applied market segmentation in this sector especially in soccer and basketball sports. For example, they have embarked on producing BB II High-Performance basketball footwear, which is a contemporary design for the modern sportsman, combining lightweight materials with more durable ones to ensure the best guarantee for their customers.
Differences
The two companies have a difference in their market segmentation in that when Nike applies the geographic segmentation to enter the developing markets in other parts of the world, Adidas focuses on the United States’ markets to improve its sales in the sports shoes sector. Some of the markets that Nike has targeted include South America and the developing nations of Africa. On the other hand, Adidas has only started to approach and consolidate these markets. Nike is also known to apply contracts in the sales and purchase of its products, as opposed to Adidas that mostly applies leasing.
Conclusion and Recommendations
Market segmentation allows companies to group their markets into appropriate segments so that they are able to target them with specific measures that are aimed at improving their competitiveness and profit returns. Nike and Adidas have applied a number of strategies in their market segmentation. However, Adidas has been slower in the implementation of measures to attract the specific targets, as evidenced in its market share, which is second to Nike. Some of the recommendations for these companies include that they should segment their markets more by targeting submarkets such as distance runners. They should also ensure that they put more measures to keep up with the latest trends in the fashion industry by providing products that match the trend.
Reference List
Adidas Industries. (2011, November). Ch. 8 Segmenting and Targeting Markets . Web. Carbasho, T. (2010). Nike. Santa Barbara, Calif: Greenwood. Choi, J., Jungwoo, S., & Jongsu, L. (2013). Strategic management of new products: Ex-ante simulation and market segmentation. International Journal of Market Research, 55 (2), 289-314. Larson, D. (2011). Global Brand Management – Nike’s Global Brand. ISM Journal of International Business, 1 (3), 1-14. Levin, A., & Behrens, J. (2003). From Swoosh to Swoon: Linguistic Analysis of Nike’s Changing Image. Business Communication Quarterly, 66 (3), 52-65. Nunez, D. (2012). Nike Inc.: Ch. 8 – Segmenting and Targeting Markets . Web. Quinn, L. (2009). Market segmentation in managerial practice: a qualitative examination. Journal of Marketing Management, 25 (3/4), 253-272. Quinn, L., & Dibb, S. (2010). Evaluating market-segmentation research priorities: Targeting re-emancipation. Journal of Marketing Management, 26 (13/14), 1239-1255.
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Nike vs Adidas: Competitive Analysis with Data Visualizations
Updated: Feb 5, 2021
Here is a competitive analysis of Nike vs Adidas with data, insights, visualizations, and more.
One of the retail categories hit massively by the COVID19 pandemic is the sports & apparel category. Adidas and Nike are two giants in the apparel market with a large market cap and market share.
At Datahut, we extract the pricing and product data of Adidas and Nike. We saw some interesting numbers and decided to dig a little deep. The data is about men and women’s shoes.
The download links to the data are at the bottom of the page.
Nike vs Adidas: The Merchandise
Adidas has 2625 products with prices ranging from 899 to 29999, and Nike has 643 products with prices ranging from 1596 to 36500. Adidas has almost four times the number of products than Nike has in its portfolio.
There are two arguments people make when it comes to eCommerce consumer behavior.
More choices lead to decision fatigue and providing your customers with fewer options will increase your eCommerce Sales. People at VWO agrees to this.
More products in the portfolio mean more options for customers to choose from, and it will increase net sales.
It looks like Nike agrees to the first argument while adidas concurs with the second.
Another observation we made is that Adidas provides specialized footwear options like Shoes for Taekwondo, a martial art form. Nike does not have that option, and for a Taekwondo artist, Adidas would be the obvious choice.
Nike vs Adidas: The Pricing
We will consider four segments when it comes to pricing. The segments are designed based on the MRP ( not the sale price ). See the chart below to see the pricing variations. See the interactive visualization here .
Also Read: COVID-19 And Predatory Pricing Online
Products priced under 5000 Rs or roughly 65 USD
Nike has 43 products in this price bracket and Adidas has 810 products. The lowest-priced product belongs to Adidas with the pricing of 899. The lowest-priced Nike product is priced in Rs 1595.
Products priced in the range of Rs 5000 – 12000 Roughly ( $65 – $150)
Nike has 367 products in this price bracket and Adidas has 1496 products. The lowest-priced product belongs to Adidas with the pricing of Rs 5159. The lowest-priced Nike’s product is priced at Rs 5295.
Products priced in the range of Rs 12000 – 25000 Roughly ( $150 – $325)
Nike has 232 products in this price bracket and Adidas has 313 products. The lowest-priced product belongs to Nike with the pricing of Rs 12995. The lowest-priced Adidas product is priced at Rs 12,999.
Products priced above Rs 25000, ie $325 +
Nike has 1 product in this price bracket and Adidas has 6 products. The lowest-priced product belongs to Adidas at the pricing of Rs 27999. The lowest-priced Nike product is priced at Rs 36500.
The Discount Statistics
The discount statistics are quite interesting for both brands.
Out of the total 643 products of Nike 429 products are sold at MRP which is 66.7 % of the total products. The maximum discount Nike offers is 40% and only 43 products are sold at this price range which represents only 6.6% of the total Nike merchandise.
Out of the total 2625 products of Adidas, 659 products are sold at MRP which is 25% of the total products. The maximum discount Adidas offers is 60% and 1055 products are sold at this price range which represents 40% % of the total Adidas merchandise.
Adidas and Nike are not offering any discounts in the range of 0 – 20%. This is very interesting. View the interactive visualization here .
Nike vs Adidas: The Sales Price statistics
We will consider four segments when it comes to pricing. The segments are designed based on the MRP ( not the sale price ). See the chart below to see the pricing variations.
See the interactive visualization here .
Products sold in the range of 0 – 5000 or Roughly $65
After applying the discounts, Nike has 53 products in this price bracket and Adidas has 1744 products. The lowest-priced product belongs to Adidas with the pricing of Rs 499. The lowest-priced Nike product is priced at Rs 1595.
Products sold in the range of Rs 5000 – 12000 Roughly ( $65 – $150)
Nike has 418 products in this price bracket and Adidas has 757 products. The lowest-priced product belongs to Adidas with the pricing of Rs 5159. The lowest-priced Nike’s product is priced at Rs 5274.
Products sold in the range of Rs 12000 – 25000 Roughly ( $150 – $325)
Nike has 171 products in this price bracket and Adidas has 118 products. The lowest-priced product belongs to Nike with the pricing of Rs 12597. The lowest-priced Adidas product is sold at Rs 12599.
Products sold above Rs 25000, ie $325 +
Nike has 1 product in this price bracket and Adidas has 6 products. The lowest-priced product belongs to Adidas with the pricing of Rs 27999. The lowest-priced Nike product is priced at Rs 36500.
Also Read: Use Data Analytics to Sustain Your Business During COVID-19
The competitive analysis of Nike vs Adidas in pricing is very interesting. Adidas has six products priced at about 25000 and Nike has only one. The ration is 6:1, there is no other price bracket with this many differences.
Nike vs Adidas: Market Share
Both Nike and Adidas, the two leading sportswear and athleisure brands in the world, have carved out an impressive market share in the increasingly competitive apparel industry.
Market capitalization is a defining factor when considering who is winning in the market. In April 2020, Nike’s market capitalization stood at $136.69 billion: more than double that of Adidas’s $45.21 billion .
Nike and Adidas have both seen their share prices gain momentum, hitting all-time highs in January 2020 before plummeting as the COVID-19 epidemic sweeps the world’s industries.
Nike shares from Nov’19 to April’20
Adidas shares from Nov’19 to April’20
The competitive analysis of market share gives Nike a clear edge over Adidas.
Nike vs Adidas: Social media following
Adidas and Nike both are dominating the social media game at present. While Adidas markets itself as a streetwear sneakers with celebrity collaborations like Kanye West and Beyonce, Nike’s marketing is more sports-focused. With an athleisure approach sweeping social media trends and consumers, Adidas seems to fare better in the market.
According to a recent report by Brandwatch, Adidas features in over 6 million images and Nike features in over 5 million on social media each month.
Both brands dominate social media with a staggering number of followers, subscribers, and likes. While Nike has more followers than Adidas on Instagram and YouTube, Adidas boasts of more followers on Facebook and Twitter.
Social media followers of Nike and Adidas as of April 2020
The competitive analysis of social media data gives Nike a clear edge over Adidas.
Nike vs Adidas: Brand value
Both Nike and Adidas have seen a tremendous rise in its brand value.
In order to grow its brand image, Nike spends a staggering amount of money on advertising and promotion with expenditure on its memorable ads targeting a diverse viewership.
In 2020, Nike is valued at approximately 34.8 billion U.S. dollars, witnessing a two billion U.S. dollars increase from 2019.
Global brand value of Nike from 2016 to 2020 Source: Statista.com
On the other hand, Adidas has increased its advertising spending in the United States as well as noted a huge increase in customer satisfaction as well; recording the highest score of customer satisfaction for athletic shoe companies in the U.S.
Also Read: Cost control for web scraping projects
The competitive analysis of the brand value gives positive signals for both companies.
Both Nike and Adidas have their own unique ways when it comes to the product portfolio, the MRP, discounts, etc. What we will have to see is how the patterns are going to change post-COVID. We’re going to keep an eye on how the market changes. Click on the bell icon to get the updates.
What do you think about the Nike vs Adidas war and our competitive analysis? Comment below and let us know.
Meanwhile, Stay safe. Wash your hands regularly and spend more time with family.
Download the datasets used in the above visualizations here:
Adidas product dataset
Nike product dataset
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