Team members group 131: Vaduva Ioana Valeria

Silivestru Ana Maria

Lacatus Carmen Anca
Popescu Ioana Alexandra

Adidas Inc. Market Share Analysis using Super Decision

Sensitivity analysis:
We want to find out how price can influence our alternatives. We settled the sensitivity at 0.50, in order to
have the priorities of alternatives the same.

CHEAP PRIORITY SENSITIVITY:

Team members group 131: Vaduva Ioana Valeria
Silivestru Ana Maria
Lacatus Carmen Anca
Popescu Ioana Alexandra

We notice a drastic case in the cases of FOOTWEAR and APPAREL, both going in different directions.

The question we asked was: if the company decides to produce more cheap products, how will that
influence them? Will the best choice be changed? To which one? And by how much?

The results show a massive increase in APPAREL, and a massive decrease in FOOTWEAR. The reason
for that is that people choose to buy cheaper clothes from this brand, as they don’t consider that the price
at the moment is correctly placed with respect to the quality.
In the case of footwear, people seem to stop buying if the price goes cheaper, as they consider it a lower
quality footwear. They choose to associate the cheaper price with low quality materials, making them to
move to competitors.
The best choice here is moved from FOOTWEAR to APPAREL.

EXPENSIVE PRIORITY SENSIBILITY:

The question we asked was: if the company decides to produce more expensive products, how will that
influence them? Will the best choice be changed? To which one? And by how much?
As expected, FOOTWEAR products will have a massive increase, while the other two will continue to
decrease. Because Adidas is primarily now as a sport shoes company, it’s only natural that, along with a
huge price increase, the footwear products buying to increase too, as people perceive this price change
like a superior quality shoes. In the other two cases, HARDWARE and APPAREL, the influence is
negative, as customers decide to move to their competitors.
The best choice for Adidas, after our analysis, is to keep an high but still affordable price for
FOOTWEAR while decreasing the HARDWARE and APPAREL cost as much as they can still make
profit out of them
Team members group 131: Vaduva Ioana Valeria
Silivestru Ana Maria
Lacatus Carmen Anca
Popescu Ioana Alexandra

REGIONS ANALYSIS:

We chose 3 main areas where Adidas gets its market share from: Asia, Europe and America, in order to
find out what product influences more these regions.

ASIA: In Asia’s case, when buying from Adidas, people prefer APPAREL with 68,17%,
HARDWARE with 23,63% and lastly FOOTWEAR with 8,19%.
EUROPE: In Europe’s case, when buying from Adidas, people prefer FOOTWEAR with 67,24%,
HARDWARE with 25,72% and lastly APPAREL with 7,03%
AMERICA: In Nord America’s case, when buying from Adidas, people prefer FOOTWEAR with
64,83%, HARDWARE with 29,97% and lastly APPAREL with 5,19%

The difference between Europe and America VS Asia, is mainly made because of the sports. In Europe,
football dominates while in Nord America basketball. So people tend to buy more sport shoes.

Social factors:

In this category, we divided the consumers into three categories, as follows:

- The brand addicted (persons who prefer Adidas brand and buy constantly its products, no matter
if we talk about apparel, footwear or different hardware products, like bags and balls)
- The sportive person (whose fashion style is composed mainly from sport clothes)
- Casual (persons that include in their clothing some sport articles, but their focus is not on this
fashion style)

Our analysis revealed some interesting results about their preferences in terms of products chosen, costs
of these products, materials.
The footwear category, the most important category of the company, is preferred mainly by the sportive
persons, having a percentage of 72%, followed by brand addicted with 20% and casual 0.07%.
The brand addicted persons are willing to pay higher amounts of money for Adidas products, due to their
fidelity to the brand, compared to the ones that adopt the casual style and the sportive persons.
As for materials used for the realization of the products, leather is preferred by the brand addicted persons
(48, 69%), plastic is the material chosen more by the sportive persons (74.4%).[CITATION Inc17 \l
1048 ]
According to the compatibility index calculated, the current model developed for Adidas has moderate
compatibility. In order to have a valid model, the company needs to make some improvements to the
marketing mix.
At present, Adidas focuses on 3 areas: footwear, apparel and hardware. The main regions where it sells its
products are the United States of America, Europe and Asia. Those ones appeal to three large groups of
customers: those that buy Adidas for the brand, for casual wear or as it was intended in the first place, for
sport purposes.
As marketing mix consists of 4 Ps, product, promotion, price and placement, we will shortly describe
various improvements that can be done at all levels to boost the sale of Adidas items. The major product
Team members group 131: Vaduva Ioana Valeria
Silivestru Ana Maria
Lacatus Carmen Anca
Popescu Ioana Alexandra

Adidas is known for and that has the most success is footwear. Apparel is also greatly demanded,

especially in comparison with its competitors, Reebok, Nike or Puma, while hardware is the last in terms

of importance. It would be wise for Adidas to continue its work with creating new models of sport shoes,
combining technology with ergonomy, while aiming for style as well. As there are two times as many
models for men as there are for women and kids, Adidas could extend in this direction, by also
developing shoes for various lifestyles that have been overseen until now, such as skateboarding, tennis,
dancing or even swimming.
Team members group 131: Vaduva Ioana Valeria
Silivestru Ana Maria
Lacatus Carmen Anca
Popescu Ioana Alexandra

Apparel is another segment on which Adidas should focus, maybe more than on shoes that are already a
well-known product of this company. Adidas could design more models of pants, tights and bras and
hoodies and take the opportunity to produce swimwear, an item underdeveloped in their portfolio.
When it comes to price, Adidas has been known to use both promotions and competitive prices, as the
targeted customer is the upper-middle class person. This practice is good against competitors and should
stay the same, especially since the company has to defend its prestige. Quality is also reflected in Adidas
products.
Adidas usually sells its products through retail outlets. There are also showrooms for display and multi
brand stores or online shopping. The distribution channels are short, as the products go from the
manufacturer to one of the three points mentioned above and then directly to the customer. However,
Adidas could rely more on online shopping, as it would cut many costs that physical shops imply and
save the showrooms for the display and testing of new wearable items and hardware by the clients.
Even though Adidas uses various different promotion techniques, they mostly rely on product placement
and television. Their product placements feature famous sports people that are full of energy, sending the
right message to the customer. Adidas also sponsors teams, such as Real Madrid and organizes outdoor
campaigns or event marketing. Here, they should continue with the product placement practice and also
try a different approach that reaches less famous sports (traditionally), but that have gained popularity in
the past years, such as jogging, going to the gym or skateboarding.
These are some ways in which Adidas could gain even more success and even surpass Nike, the present
leader of the footwear market.

Analyzing the Cost in regard to multiple factors

Cluster COST with Node Apparel

We had analyzed the Apparel in regards with the Cost aspect and we have discovered that people are
rather interest in buying moderately expensive products than the cheap ones (The score of 5 out of 9)
Cluster Cost with Node Footwear
The footwear is chosen by the consumers keeping in mind also the strongly more expensive products,
customers being interested in quality, and making the correlation between the quality and the level of
prices. (The score is 5 out of 9)
Cluster Cost with Node Hardware
Hardware is represented by the accessories and touchable object produced by Adidas, the consumer also
choosing to buy the more expensive products from the range. (The score is 5 out of 9)
Cluster Cost with Node Leather
When choosing the products made with or by leather, the consumers were influenced by the lowest cost,
being used with sport products which do not often consists in leather. The consumers regarded cheap
products extremely more important than the expensive ones. (The score was 9 out of 9-Cheap)

Cluster Cost with Node Plastic

The plastic adds on were not very appreciated, but more appreciated than the leather products, therefore
the consumers were not willing to pay more for the products consisting in plastic. The score given was 4
out of 9 –cheap.
Cluster Cost with Node Rubber
Team members group 131: Vaduva Ioana Valeria
Silivestru Ana Maria
Lacatus Carmen Anca
Popescu Ioana Alexandra

The rubber is still regarded for the cheap products, but still consumers appreciate rubber more than leather
and plastic. The score given was 4 out of 9-cheap.
Cluster Cost with Nodes: Asia, Europe and North America
For these regions we have encountered different aspects, as follows:
-The Asian consumers are more willing to buy affordable to cheap product, being the continent where
most of the products are produced, they are mostly aware of the quality and the score given is 9 for the
cheap aspect and 5 for affordable in comparison to expensive.
- In Europe the situation is quite different, the consumers choosing to buy products from the rank of
affordable to the expensive ones. The score is 7 out of 9 for the expensive ones.
-In North America is quite similar with Europe, but going to a higher level, consumers being attracted
more to expensive products. The scores are 9 out of 9 for expensive.
Cluster Cost with Node Brand Addicted
Regarding the Brand addiction, consumers are so keen to buy expensive products, improving their social
recognition and awareness, remaining loyal to their soul brands. The score is 5 out of 9 for the expensive
products.
Cluster Cost with Node Casual
The casual products are also being preferred for customers as being expensive ones, making the casual
clothing also an important item in fashion awareness. The score is 7 out of 9 for the expensive products.

MATERIALS

Adidas is a multinational corporation, founded and headquartered Germany. It is the largest sportswear
manufacturer in Europe, and the second largest in the world, after Nike. It has a long history and deep-
rooted connection with sport. Its broad and diverse sports portfolio, from major global spots such as
football and running, to regional heartbeat sports such as American football and rugby, has enabled the
brand to transcend cultures and become one of the most recognized and iconic global brands, on and off
the field of play. The Adidas`s mission is to be the best sports products in the world, with the best service
and experience.

Driven by a relentless pursuit of innovation as well as decades of accumulating sports science expertise,
Adidas has developed a truly unique and comprehensive sports offering. Footwear, apparel, hardware
(equipment & services), the brand caters for all, from elite professional athletes and teams to any
individual who wants to make sport part of their lives.

Employing more than 60,000 people in over 160 countries, Adidas produces more than 850 million
product units every year and
generate sales of € 20
billion. These numbers
alone can easily suggest that
Adidas is quite a complex
organization.
Team members group 131: Vaduva Ioana Valeria
Silivestru Ana Maria
Lacatus Carmen Anca
Popescu Ioana Alexandra

In this category, we divided the materials into three categories, as follows:

- Leather (many products are made by this material in order to make the shoes more comfortable
and more quality)
- Plastic (we use plastic cautiously because we want to avoid using this resource improperly, given
the fact that we want to protect the nature)
- Rubber (we use high-quality rubber for our shoes sole & accessories in order to make them more
durable and increase them impact resistance);

Our analysis revealed some interesting results about their preferences in terms of products chosen, having
in view the materials used. The leather category, is preferred in the largest percentage by consumers,
followed by the rubber materials& plastic one. Also, their cost prevails and influences the consumer's
decision, regardless of the region they are or the social factors.

After a carefully analysis, we established that Adidas is a company that has grown amazingly over time,
but also it has to be careful about the factors around it, in order to keep the same pace of development in
the future. It has to be courageous enough to make the right changes and to aim higher and higher.

First of all, it is important to keep a high but still affordable price for footwear while decreasing the
hardware and apparel cost as much as they can still make profit out of them. Moreover, it is important to
pay more attention of selling both apparel and hardware, since they are also have been demanding by
consumers. What is more, Adidas could extend in this direction, by also developing shoes for various
lifestyles that have been overseen until now, such as skateboarding, tennis, dancing or even swimming.

In regard with price, we think that is better to make those products more affordable to the consumers and
to concentrate also on maintaining low costs and outsource all manufacturing functions of the company.

Having in mind that we are now facing a fourth digital revolution, it is important to focus on selling
Adidas products via online channels, rather than offline one.
Team members group 131: Vaduva Ioana Valeria
Silivestru Ana Maria
Lacatus Carmen Anca
Popescu Ioana Alexandra

Bibliography
Adidas. (2017). Annual Report Adidas Inc. 2017. Adidas Group. From www.adidas-
group.com/en/investors/financial-reports/2017