This text provides an overview of the strategies Adidas, Nike and Under Armour implement to compete in the sports apparel industry.
Adidas and Nike, but also Under Armour, to some extent, are leveraging from a high bargaining power over their suppliers due to a strong and global supply chain. With the increase in E-Commerce stores and sporty fashion trends, the customer has a lower switching cost, making the sportswear industry very competitive.
The sportswear industry consists of 6 strategic pillars: brand portfolio, innovation, markets, team, supply chain, and sustainability. Nike and Adidas compete for the highest market share and try to create a global corporate culture exploiting their history and core values. Sustainability has become a big concern in terms of the unethical supply chain strategy. Under Armour, on the other hand, is focusing to expand and compete with the big players in the sports industry with its unique innovation strategy to produce advanced sports products to enter new markets and reach more customers.
Table of Contents
1. Introduction
2. Objective
3. Methodology
4. Main Part
4.1 Industry Analysis & Overview
4.2 Porters 5 Forces
4.3 SWOT Analysis
4.3.1 Adidas
4.3.2 Nike
4.3.3 Under Armour
5. Conclusion
Objectives & Core Themes
The primary objective of this assignment is to conduct a comparative analysis of the business strategies employed by Adidas, Nike, and Under Armour to maintain a competitive advantage in the rapidly evolving and highly aggressive sportswear industry.
- Strategic comparative analysis of three major sportswear competitors.
- Application of Porter's Five Forces model to assess industry threats and opportunities.
- Evaluation of internal and external factors via SWOT analysis for each brand.
- Examination of strategic pillars including brand portfolio, innovation, and supply chain.
- Identification of competitive positioning regarding market share and consumer trends.
Excerpt from the Book
4.1 Industry Analysis & Overview
Over many years Nike, Adidas and Puma dominated the sportswear industry by competing over the best sponsorship deals and athlete endorsements. Nike is a multinational company focusing on the production and selling of footwear, apparel, equipment, accessories and services like the ‘Nike +’ phone application. Nike is an American industry, founded in 1964 with it’s headquarter in Portland, and generates global revenue of 32 billion US dollars4. Nike is the biggest player in the sportswear industry and has the highest global market share. Nikes pricing strategy is based on premium segments as their customer5. Nike has a fixed base price, making its (shoe wear) products more expensive then similar products from its biggest competitor Adidas for instance.
Adidas is a sport brand with the longest history; the Daßler brothers founded the ‘Gebrüder Dassler Schuhfabrik’ in 1924 in Herzogenaurach. Adidas achieved the breakthrough in 1949 by the older brother Adi Dassler. The Adidas Group consists of many subsidiaries including well-known brands like Reebok6. In 2015 Adidas amounted global net sales of 16.92 billion Euros7 and is therefore one of the strongest competitor of Nike Inc.
Under Armour is the smallest and youngest sports apparel producer in comparison to Nike and Adidas. Under Armour established itself quickly within the industry, especially in the US market due to its innovative use of fabric technology and increasing brand recognition through athlete endorsements. Under Armour achieved global net sales of 3 billion US dollars in 20148.
Summary of Chapters
1. Introduction: This chapter introduces the competitive nature of the global sport clothing industry, highlighting market growth trends and the rivalry between Nike, Adidas, and Under Armour.
2. Objective: This section outlines the goal of identifying how these organizations compete in a target market driven by shifting fashion trends and sport-economical pressures.
3. Methodology: This chapter briefly describes the data collection process, which relies on secondary research from books, journals, reports, and online sources.
4. Main Part: This extensive section defines strategy in a business context and conducts deep-dive analyses of the industry using Porter's Five Forces and SWOT frameworks.
4.1 Industry Analysis & Overview: This chapter provides a foundational comparison of the history, revenue, and market positioning of Nike, Adidas, and Under Armour.
4.2 Porters 5 Forces: This chapter applies the Five Forces model to the sportswear sector to evaluate threats from new entrants, suppliers, buyers, and substitutes.
4.3 SWOT Analysis: This section details the situational analysis framework used to examine internal strengths and weaknesses alongside external opportunities and threats.
4.3.1 Adidas: This chapter evaluates Adidas's legacy-based strengths, supplier dependency issues, and growth opportunities through innovation.
4.3.2 Nike: This chapter analyzes Nike’s market dominance, dependence on footwear production, and the branding challenges posed by global supply chain scrutiny.
4.3.3 Under Armour: This chapter examines Under Armour's R&D-led growth, its vulnerability due to high North American market concentration, and its expansion potential.
5. Conclusion: This final chapter synthesizes findings, emphasizing the importance of innovation, strategic sponsorship, and sustainability for long-term competitiveness.
Keywords
Sportswear Industry, Adidas, Nike, Under Armour, Strategic Management, Porter's Five Forces, SWOT Analysis, Market Share, Competitive Advantage, Supply Chain, Brand Portfolio, Innovation, Sustainability, Athlete Endorsements, Global Market.
Frequently Asked Questions
What is the core focus of this publication?
The work provides a comparative strategic analysis of three major sportswear entities—Adidas, Nike, and Under Armour—to understand how they compete and maintain relevance in a dynamic global market.
What are the central thematic pillars discussed?
The research centers on six strategic pillars: brand portfolio, innovation, markets, team, supply chain, and sustainability.
What is the primary research goal?
The goal is to identify how these companies utilize competitive strategies—such as cost leadership and differentiation—to secure market advantage in the face of shifting consumer lifestyle trends.
Which analytical methodologies are applied?
The assignment employs Porter's Five Forces analysis to assess the industry environment and SWOT analysis to evaluate the specific internal and external factors affecting each brand.
What topics does the main part cover?
The main part defines organizational strategy and performs detailed industry analysis followed by specific company-by-company SWOT assessments for Adidas, Nike, and Under Armour.
Which keywords best describe this study?
The study is characterized by terms such as sportswear industry, competitive advantage, strategic management, market share, innovation, and global supply chain.
Why is Under Armour considered more vulnerable than its competitors?
Under Armour is more vulnerable because it has a smaller global market share and relies heavily (90% of revenue) on the North American market compared to the more diversified global reach of Nike and Adidas.
How does the research assess the threat of substitute products?
The research concludes that the threat of substitutes, such as general fashion brands like H&M, is currently low because consumers specifically require the functional and safety features of specialized athletic wear for exercise.
- Quote paper
- Anonym (Author), 2017, The strategies of the sportswear industry, Munich, GRIN Verlag, https://www.grin.com/document/429698
