Analysis Of Industry Unicorn Strategy And Layout

Brand strategy is the most important issue of the company's organization in the future. Every sports related industry will carefully consider before making a decision.

Today, we compare the case by case study.

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The annual report of the company combs the global brand strategy of the two companies in the corresponding environment, so as to provide reference for sports industry related practitioners.

In contrast, Nike pays more attention to innovation, attaches importance to R & D departments, emphasizes market segmentation, while Adidas focuses on differentiation, emphasizing the expansion of business to acquire emerging markets.

With their respective resources, the two companies have established their competitive advantages on different bases.

Their past and present life

Nike: explosive money first

Nike (Nike, Inc.) is a multinational company originating in the United States, engaged in the design, development, manufacture and sale of footwear, clothing, equipment and accessories.

Headquartered in downtown Portland, Oregon, the company is one of the world's largest suppliers of sports shoes and apparel, and is also the main manufacturer of sports equipment.

As of 2016, Nike has more than 44000 employees worldwide, with annual revenues exceeding US $24 billion 100 million.

The brand valuation of $19 billion makes it the most valuable company in the sports industry.

Nike produces all kinds of sports equipment. The earliest products are sports running shoes.

At present, Nike also produces basketball shoes, sportswear, shorts, anti skid nails and so on. Sports include track and field, baseball, ice hockey, tennis, football, lacrosse, basketball, cricket and so on.

According to the world clothing shoes and hats net, in 1987, Nike pioneered the Nike Air Max series sneakers, followed by the introduction of other products, such as the first Air Huarache in 1992.

In the decades of product chain building, Nike created Nike 6, Nike NYX, Nike SB, Air Zoom Yorker, Air Jordan and other explosive funds.

Especially after the 2008 Air Jordan series, its unique design, excellent quality and even reached the level of art.

Adidas: Guardian of sports performance

Adidas Group (Adidas group) was founded in a small town in Bavaria, Germany.

The founder, ADI dusler, founded this brand in his kitchen and was registered in 1924.

At first, Adidas aims to provide professional sportsmen with good sports equipment.

Lena, Adidas player and Jesse Owens, won the gold medal in the 1928 Amsterdam Olympic Games and the 1936 Berlin Olympic Games.

This is an important milestone in the development of Adidas.

In August 18, 1949, ADI Dassault, 49, finished manual workshop operation and co operated with 47 workers in the town, which promoted Adidas to upgrade from a personal handmade brand to a modern manufacturer.

Today, Adidas is already a global listed company and one of the largest sports brands in the world.

In every corner of the world, you can see its famous "three bars" sign.

Adidas's product mix is very extensive, from the most advanced sports shoes to everyday clothing accessories, such as bags, watches, eyes and other sports equipment.

In 2017, Adidas group has more than 46000 employees worldwide, including more than 170 subsidiaries including Reebok, Rockport and CCM-Hockey.

Competition environment: two strong contend for hegemony, multipolar world

Although the two companies have already formed the two strong contending situation in the global market, but in recent thirty years, there are always some emerging brands challenging the position of the top two.

In the sports shoes industry, there are brands like Puma and Fila, which are close to the two unicorns in some years.

In 1996, another strong competitor, Under Armour, grew rapidly in the last five years and snatched a large share of the market.

In addition, some companies are regarded as substitutes.

For example, the Crocs of the 2014 fire also challenged Nike's status with Adidas.

Although in traditional industries, fierce competition still leads to a situation of no progress or retreat.

In terms of production, Nike and Adidas use private contractors as the end of production. These factories are concentrated in China, Thailand, Indonesia and Vietnam as the representative of Asia and the five countries of the Americas.

With a firm grasp of the upstream design and development, they can easily switch between factories in different countries.

For example, Nike does not have a self run factory at present, and it can even say that it has never produced its own sports shoes at all.

But Nike has absolute control over the private contractors they use in Vietnam.

On the other hand, customers also have enough power. They can easily switch between brands, considering better cost performance, higher quality, new trend style and so on.

However, when consumers are loyal to a brand and only want to buy their products, this power will naturally disappear.

Therefore, brand strategy can solve two problems here.

1. control the contractor at the production end to reflect the value of the product.

2. cultivate customer loyalty at the sales side and seize the fixed market share.

Brand strategy has its own characteristics.

In order to become the world's leading manufacturer of sports shoes and clothing, Nike will hold a grand annual strategic meeting every year.

In the past twenty years, Nike has never adjusted its corporate and brand strategy: continuous attention to innovation and emphasis on R & D departments.

The core of Nike's research and development is to make every effort to reduce or eliminate the bodily harm of footwear and other sports equipment and maximize comfort.

According to the consulting firm's report, innovation (Innovation) is the strategic core of Nike's business growth.

The development of the company aims to use innovation as a more sustainable sports product supplier to keep up with competition and customer needs.

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Nike's second strategy is Premium Pricing.

For customers who have formed special intimacy with their products, they develop very high loyalty.

The advantage of loyalty is used to link consumers with the price of products.

Therefore, Nike wants to ensure that consumers are willing to pay higher prices, only to acquire a classic product.

At the same time, Nike continued to pay attention to the Differentiation strategy.

Based on this, Nike has formulated three different modes of production sports products.

The first is the differentiation of the target population: men, women and children.

Secondly, by providing various accessories to distinguish their products, such as fitness bags, gloves, skates and so on.

Third, Nike has also opened up other strategic brands such as stationery and electronic equipment.

In terms of market segmentation, Nike's strategy is more conventional, such as promoting its products through signing sponsorship agreements with sports stars, professional clubs and university sports teams.

During the New York marathon in 1982, Nike first broadcast advertisements on national TV channels, attracting consumers' attention very early.

Nike has hired famous basketball players, football stars and golf stars to promote advertising all over the world.

The company has been pursuing a closed loop business model, aiming to achieve zero waste through repeated use and recycling of materials.

Nike has made great efforts in environmental protection materials.

They have created a new method of recycling and reusing in sports apparel industry, pforming the old products that are very low price into new products, and have been praised by environmentalists.

By contrast, Adidas's strategy focuses on differentiated services.

At the corporate level, Adidas has long been committed to optimizing services and processes to cope with competition.

In 2014, Adidas launched the Centralized Sales to support the global market.

The group is independent of a global sales department responsible for business activities and brand promotion.

The global sales segment is a wholesale and retail two subsidiary to meet the needs of two business models.

Diverse Brand Portfolio enables the company to meet all market needs from professional athletes to almost every consumer, so that Adidas maintains a unique identity in the industry in order to maintain its core competitiveness.

Most of the professional athletes choose the equipment provided by Adidas.

This part of the revenue is very small, but it can make the company a benchmark.

ClimaCool allows Adidas equipment to help athletes improve their performance and performance.

Among professional athletes in football, basketball and tennis, Adidas's market share is always the first.

Compared with Nike, Adidas's online sales efficiency is higher, attracting more quality customers.

They communicate closely with the supply chain to feed back upstream design and R & D, and improve products based on consumer preferences.

Adidas is good at using data analysis to evaluate consumers' buying behavior and focusing on marketing and distribution channels in different countries.

In addition, Adidas attaches great importance to the needs of its employees and suppliers, and has found an appropriate balance between the interests of shareholders and employee benefits. It has been awarded the title of "best employer" in all regions throughout the year.

Business mode differences

"Metaphysics is the way, while the form is the device."

The book of changes.

Nike's business model: form predicate

Over the past decades, actively establishing relationships with famous athletes has become a major feature of Nike.

One of the most successful cases was the exclusive contract with Michael Jordan.

Since then, sales of its core products in basketball shoes and clothing have soared.

Since 2010, Nike's marketing focus has shifted from traditional media to Internet social media.

In short, Nike is measuring its ROI with athletes' Facebook and twitter fans.

For the club agreement, Nike is also more willing to sign up for teams with active attention and core fans in social media.

Nike's own products are also obviously moving toward digital devices. FuelBand is a sign.

It is a $150 electronic bracelet, which is praised for its elegant design and clean interface, allowing users to exercise through simple color hints.

Another important innovation of Nike is Flyknit Racer.

This jogging shoe is as light as if you were wearing socks.

It is not made of multilayer fabric but knitted thread, which has completely changed the manufacturing process of sports shoes.

Moreover, the production process of Flyknit Racer is more environmental friendly, and at the same time, it reduces the long-term production cost.

Adidas's business model: metaphysical

Adidas's business model is highly concerned with creating high-performance products based on specific needs of athletes and consumers to demonstrate its value.

In addition, the company strives to create faster product creation and production closed-loop through continuous improvement of infrastructure, processes and systems.

In addition, Adidas emphasizes reducing the complexity of the group level by simplifying the global product line, integrating the warehouse base and coordinating the market services.

The rapid innovation model in the supply chain can respond quickly to the needs of consumers.

This mode has encouraged global investors to keep optimistic about Adidas and keep the company stable for many years.

Fierce struggle is hard to distinguish between autumn scenery.

1. business operation

At present, Nike and Adidas share the first and second place on the global sporting goods manufacturers list.

Nike's popularity among popular consumers is mainly due to the sponsorship of star athletes, mainly targeting NBA's basketball stars.

The main target of Adidas is soccer and tennis, and its main market is in European countries.

In the past ten years, Nike has begun to turn its attention to soccer and has been recognized by international consumers.

Football is recognized as the world's largest sport, the market is naturally the two giants must fight.

2. product classification

Nike and Adidas products can be divided into three categories, but each has its own hierarchy.

Products of Nike:

1. sports shoes and sunglasses;

2. body care products;

3. coat, handbag, perfume.

Products of Adidas:

1. sports shoes, glasses, perfume;

2. Vintage clothing;

3. handbags, belts, gloves and baseball caps.

3. pricing strategy

The products of both companies are at high price in sports equipment.

In order to maintain the relevance of the market, Nike and Adidas adopted completely different pricing strategies.

The overall price of Nike is higher than that of Adidas.

Nike's pricing is based on price leadership strategy, and its product price is based on consumer demand for specific products.

Because Nike's sneakers are aimed at the target customers of high-end market segments, the added value of their design shoes is significantly higher than that of competing products.

The pricing strategy used by Adidas is based on the interpretation of the market. The price of its products depends not only on cost and style design, but also on appearance and color.

For example, two pairs of Adidas sneakers with the same quality but different colors are usually more expensive than white ones.

4. placing strategy

In the placing strategy, Adidas concentrates most of its products and resources on customers.

That's why Adidas started more stores around the world than Nike.

Adidas is tending to sell online, and is committed to providing customers with satisfactory services both online and offline.

Nike uses a similar distribution strategy, mainly exploring emerging markets and developing markets around the world, and opening shops in different countries.

The distributor is independent and has an independent business license.

At the same time, Nike also has a certain scale of online sales business.

Despite fierce competition, Nike and Adidas have experienced substantial growth over the past twenty years.

The growth is mainly attributable to the Internet and e-commerce.

Online sales significantly lifted the performance of the two giants, while reducing operating costs.

5. brand promotion

Both companies have their unique brand promotion.

For example, in the minds of customers, if they want to wear lightweight sports shoes, they should buy Adidas.

That's why most basketball shoes are made by Adidas.

Generally speaking, the shoes worn by basketball players are unique and light.

In sports shoes, customers even think that Nike is the innovator in the industry.

Nike has put forward many new designs and styles to guide consumers' buying behavior by instilling the concept of competition.

In the promotion, fierce competition has forced the two big companies to face another new challenge, that is, the choice of celebrity endorsement.

Some negative images, especially when the parties are "crumbling", will pay a painful price.

This is especially true in Nike.

In short, the brand strategy of Nike and Adidas, the two sporting goods giants, are excellent.

Compared with Adidas, Nike's competitive edge is slightly higher.

Nike is better at creating popular fashion, while Adidas is more deeply ploughed in the soil of professional sports, which coincides with the genes of the two companies' birthplaces.

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Financial situation comparison: competition is everywhere.

By comparing the financial statements of the two companies from 2014 to 2016, we can also see their respective market performance.

In terms of profitability indicators, Nike has outperformed Adidas in recent years, and Nike's net profit margin and return on equity are higher than Adidas's.

In the early 2014 and early 2015, Adidas's earnings per share were higher than Nike's.

But in 2016, Nike's strong rise made the two companies' earnings per share rise to more than $3.

In addition, Nike's cash flow is stronger than Adidas's. liquidity has remained around two times that of Adidas in the past three years.

Adidas's financial leverage is higher than Nike's. This shows that Adidas has more debt.

Nike relies mainly on internal capital rather than external capital.

We can see the financial data of Nike and Adidas over the last three years.

Let's take a look at the changes in the stock price between Nike and Adidas since 2010.

From 2010 to 2014, both stocks were moving in the same direction, especially when Nike rose sharply during this period.

Since then, there have been some negative changes in Adidas's stock market, and this change has stimulated Nike's market value to respond positively.

From the above analysis, we can see that the two sporting goods giants Nike and Adidas have developed innovative and differentiated strategies based on their respective characteristics to help them maintain their position in the market.

Adidas has been committed to becoming a leader of equipment suppliers in professional sports events, focusing on reducing production costs, expanding the market and improving operational efficiency. Nike focuses on design innovation and marketing.

At present, it is hard for them to shake up the pattern of global competition in the global market, thanks to the huge investment made by the two companies in the formulation and implementation of the strategy.

Under such circumstances, the analysis of the industry's unicorn's strategy and layout will undoubtedly help us understand the whole industry's past, present and future.

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