External And Internal Analysis Of Porter's Five Forces Model

Adi Dassler, a cobbler by training and a keen sportsman, founded a shoe company (called “Gebrüder Dassler Schuhfabrik”) with his brother Rudolf in 1924. Adi’s method seemed simple: He observed athletes, talked to them about their needs, and then experimented with novel ways of solving their problems. This iterative process relied heavily on prototyping and testing. While Adi concentrated on innovation and production, Rudolf was busy selling. The brothers were successful from the beginning. Adi acquired his first patent on a pair of running shoes in 1925, and three years later a runner wearing the Dassler brothers’ shoes won Olympic gold. In 1936, Jesse Owens won four gold medals in their shoes.

It currently manufactures a wide range of products such as bags, watches, shirts and accessories. Adidas Group is made up of five companies: Adidas, Reebok, TaylorMade, CCM and Rockport. The total revenue and the gross profit of Adidas as at December 2014 respectively are 17587 US$ million and 8378 US$ million according to (www.finance.yahoo.com). External and Internal Analysis Adidas operates in a sector which has not been affected by the econimc crises of the last years. By analysing the Porter’s Five Forces Model it came out that the barganing power of Adidas’customers is very high because there are lots of subtitutes and switching cost for chosing another brand are very low. On the other hand the barganing power of suppliers is very low mainly because raw materials are not differentiated goods and their existence depend on the demand of this big firms. There are not real substitutes for sportwear, so the treaths of subsititutes is quite low. For example jeans can not be considered as substitutes of tracksuit bottoms because cover another need/market segment. The level of current competition is quite high: there are infact lots of firm which offer the same products of Adidas such as Puma, New Balance, Kipsta even though its main

During this journey, Adidas made its first strategic move in 1998 with acquisition of Salomon Group incorporating brands that worked in different market segments. Continuing with its expansion, Adidas to become more competitive acquired Reebok. With this merge, Adidas obtained a larger share of the sportswear market. Recently this corporation has decided to enter in a new business to be more competitive. This new field its linked to the mobile business, and to rapidly achieve a meaningful advantage, Adidas Group bought Runtastic, a brand that invest in tracking app, focusing on report of sports activities. This company developed a fitness tracker installed on a watch and that was one of the main reasons to acquire the firm. In conclusion, Adidas implemented several strategic acquisitions to overcome market and time limitations. Furthermore, its plan for the future predicts a rapid growth in the number of official Adidas stores in six key cities (New York, Los Angeles, Shanghai, Tokyo, London and Paris), to remove any barriers between the company and the customer, always trying to overcome Nike through technological