Impossible is nothing

Nermin ĆatovićAnas Dughmuch

Introduction• adidas AG is one of the biggest “players” in apparel industry• impressed how it became such a huge company• new technologies, research and development • constant improvement

• Adidas e-Commerce (future of shopping)

adidas AG Project• History and creation• Products• Mission, vision and slogan

SWOT AnalysisPEST AnalysisPorter’s method

RESEARCH part

History and creation•The company was founded in Germany in 1924 by the brothers Adolf and Rudolf Dassler

•They first named the brand "Dassler Shoes"

•Rudolf decides to start his own company named Puma

From then on Adidas grew exponentially:

•1996: 6,000 sponsored Olympic athletes from 33 countries win 220 medals, including 70 gold (apparel sales increase 50%)

•1999: Salomon company is bought by Adidas and it's skates take off with high double-digit growth

•2000: the European Soccer Championship EURO 2000 and the Olympic Summer Games, where swimmer Ian Thorpe takes three gold medals, contribute to the company's success2006: Adidas closes the Reebok , which marks a new chapter in the history of the Group.

Mission, vision - slogan

MISSION STATEMENT"Our mission is to become the best sports brand in the world. To that end, we will never equate quantity with quality. Our founder Adi Dassler was passionate about sports. For Adi, the athlete came first. He gave those on the field, the court and the track the unexpected and the little differences that made them more comfortable and improved performance. This is our legacy. This is what the brand stands for. This will never change."VISION STATEMENTVision statement is to make Adidas products as high as sky and as wise as an owl!COMPANY SLOGAN"Impossible is Nothing"

Products

• Football• Tennis• Golf• Cricket• Basketball• Gymnastics• Skateboarding• Accessories

e-Commerce analysis- extended use of Internet since 1990’s

nowdays companies without web presentation reduce their business to the lowest level

e-commerce consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks.

Amount of trade conducted electronically has grown extraordinarily with widespread Internet usage.

Innovations in electronic funds transfer, supply chain management, Internet marketing, and online transaction processing

adidas AG e-Commerce- Launched their web site in spring of 2000. which was later integrated with e-commerce- to maximize their market share they invested in branding and marketing strategies on the Internet

Benefits of e-Commerce

- Market research (with data they were able to exploit new marketing campaigns and promotions )

- Consumer buying behaviors (able to analyze and monitor buying behaviors, produce innovative design and improve research)

Barriers of e-Commerce

- technological barrier ranging from infrastructure to security

gap in its e-business strategy (online stores available in only restricted regions such as United States, Canada, Germany, France, Netherlands and United Kingdom

SWOT analysisStrengths

• Availability: 24 hrs a day, 7 days in a week business is in operation. • Ability to compete with other companies global and locally: allows adidas to expand their customer base to a global level without considerable time or expense.• Low overhead cost and low barrier to entry: startup costs for retail operation are a fraction of the costs of starting a traditional company division.•Advantage of online payments: financial transaction through electronic fund transfer is very fast and can be done from any part of the world. • Advertising Adidas e-Commerce systems online is cost effective in compare with conventional offline system.

Strengths

• Availability: 24 hrs a day, 7 days in a week business is in operation. • Ability to compete with other companies global and locally: allows adidas to expand their customer base to a global level without considerable time or expense.• Low overhead cost and low barrier to entry: startup costs for retail operation are a fraction of the costs of starting a traditional company division.•Advantage of online payments: financial transaction through electronic fund transfer is very fast and can be done from any part of the world. • Advertising Adidas e-Commerce systems online is cost effective in compare with conventional offline system.

SWOT analysis

Weaknesses

• Personal product purchase: a lot of customers prefer to buy products in person than purchasing it online• High transportation costs: sometimes transportation costs increases the product cost• Number of potential buyers who can purchase Adidas products is still not enough. • No direct communication: there is no direct interaction between the customer and the seller. Therefore, the scope of convincing the customer does not exist.

Weaknesses

• Personal product purchase: a lot of customers prefer to buy products in person than purchasing it online• High transportation costs: sometimes transportation costs increases the product cost• Number of potential buyers who can purchase Adidas products is still not enough. • No direct communication: there is no direct interaction between the customer and the seller. Therefore, the scope of convincing the customer does not exist.

SWOT analysisOpportunities

• Number of internet users is increasing in rapid way.• The opinion of people is changing and nowadays they feel more comfortable buying products online than few years ago• Other companies are already using e-commerce which makes it more natural to people, and makes them more confident in this type of purchasing products.• Online marketing is starting to have more effect than any other way of promotion • Industry growth: Adidas industry is growing more and is expected to continue at high rates; having an online store allows Adidas to be in a position to benefit more from this expansion.

Opportunities

• Number of internet users is increasing in rapid way.• The opinion of people is changing and nowadays they feel more comfortable buying products online than few years ago• Other companies are already using e-commerce which makes it more natural to people, and makes them more confident in this type of purchasing products.• Online marketing is starting to have more effect than any other way of promotion • Industry growth: Adidas industry is growing more and is expected to continue at high rates; having an online store allows Adidas to be in a position to benefit more from this expansion.

SWOT analysis Threats

• Competition: the e-commerce implementation costs are relatively cheap and allow easy market entry to any new company interested in selling their products. • Innovation: future innovations, products and technologies can have negative effect on e-commerce business• Frauds: Fake and copied products of Original Adidas brand can be sold worldwide by different retailers.

educating visitors - “buying in only official adidas stores !”

• Technological security of the site can always be a threat• Customer privacy issues: some consumers prefer not to give any personal information out over the Internet • Future Legislation: internet sales only have tax applied to the purchase if the buyer and seller reside in the same state.

Threats• Competition: the e-commerce implementation costs are relatively cheap and allow easy market entry to any new company interested in selling their products. • Innovation: future innovations, products and technologies can have negative effect on e-commerce business• Frauds: Fake and copied products of Original Adidas brand can be sold worldwide by different retailers.

educating visitors - “buying in only official adidas stores !”

• Technological security of the site can always be a threat• Customer privacy issues: some consumers prefer not to give any personal information out over the Internet • Future Legislation: internet sales only have tax applied to the purchase if the buyer and seller reside in the same state.

PEST analysisPoliticalLaw changes regarding products

Economical- Most businesses online and off realize the effect of “surviving the downturn” like credit crunch, recession - Monitoring cash flow and more importantly profit is crucial for success

Social EffectsSocial awareness of the world’s environmental needs affects the products that many people buy. Where possible, they should advertise in the online social networks that are attractive to their target audience.

Technological Technology that was once expensive can now be very cheap. That’s why Adidas should invest more in promotion over internet and in it’s e-Commerce

Porter’s method

• Barriers to Entry

• Bargaining Power of Buyers

• Bargaining Power of Suppliers

• Threats of Substitutes 

• Rivalry among Existing Competitors

Research• Created using Google Spreadsheet• Easily distributed to young people <30 years• 3-4 minutes to fill the data

1. Choose your favorite brand: Nike, Adidas, Puma, Reebok, Oasics, Converse2. Are you familiar with the term e-commerce?3. Have you ever used ecommerce?4. Have you bought product online?5. Do you prefer buying products online or in person?6. Is buying online easier than shopping?7. Do you think online shopping is secure?8. Do you easily give you credit card number when shopping online?9. Do you visit only official brand stores?10.Do you rate store according to its visual looks ( design, esthetics etc)11.Do you think the application of e- commerce has increased over years in the world12.Do you agree that e-commerce as commercial means has its advantage over the

traditional commercial method13.How does the future of e-commerce (for you) look?

Research

The Q1 results show that there is a “tight” fight between Adidas and Nike, where in our case Nike wins with 36% over Adidas’s 31%.

This result shows that Adidas still has to work on its promotion, new designs, and attractiveness to young people. This survey shows that basically Adidas and Nike are two strongest brands.

Research

From this information we can conclude that Adidas should invest more in promoting online shopping and e-Commerce and attracting young customers to use it.

81% of visitors have heard about the term e-Commerce while at the same time only 55% of them have actually used it.

Research

But this shows that majority of internet users have purchased some product online. Adidas can use this for its further promotion. It shows the increased interest of people who want to buy something online compared to previous years.

Q4 shows us that there is a larger amount of people who have actually bought product online. 67% is way above the expected and real results.

Research

And one of the most interesting questions and result found out in Q5 states that 82% of people prefer to buy products in person than online. Natural answer you would say? Yes, but in modern world even the 14% who prefer buying online is amazing. It shows that people are starting to change their mind about e-Commerce.

Research

At the same time in Q6, 46% of people consider that online shopping is easier than buying in person. This is a perfect opportunity and data to use for Adidas promotion.

Research80% of people don’t give out their credit card numbers easily, Q7 the results show that people are still not certain about security of online shopping. Only 42% of people think it’s secure, while 36% consider it non-secure.

Adidas should invest more time, money and people who will speak about internet shopping security and protection.

Research

This question shows us that nearly 85% of people care about visual looks of the online store they are purchasing from. 53% of them rate it, and 32% sometimes rate online stores, but only 14% don’t care about that. This is why Adidas should invest more in this area, design, visual attraction and functionalities, because this is important for customers.

Research

87% of survey visitors answered that application of e-Commerce and its popularization has increased over years. Only 1% has said no.

We wanted to know what is opinion of people about past and future of any e-Commerce, and what can we expect.

66% of visitors stated that e-Commerce as a commercial mean, has its advantage over traditional commercial methods.

ResearchHow does the future of e-commerce (for you) look?

It looks really bright with development of new technologies and new secure system for transactions.

Online shops for everything, lazy people, who buying everything they need seating on a chair and not going outside.... I don't like it!

I think every small business could expand to a bigger market with on-line commerceIn my opinion e-

commerce is going to be the most popular way of shopping..

...the future of e-commerce is very bright as it saves a lot of time and money.

E-commerce is booming and will continue to boom,E-commerce is booming and will continue to boom,

Security will be the problem, but the trust in online services is increasing.

Security will be the problem, but the trust in online services is increasing.

...the main disadvantage is that you can not try product

Conclusione-Commerce web site successfully portrays Adidas's product portfolio in an interactive and informational manner.

GREAT transformation from “small player” in 1990’s to number two position in footwear and apparel industry !!!

Increased emphasis on customization and differentiation of products

Adidas is not slowing down with their continuous web site innovations setting a high standard

The future should prove to be interesting and full of developments !

adidas AG e-CommerceCase Study

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