Adidas Global Market Repositioning Strategy Analysis

Introduction: Adidas in the Global Marketplace

Adidas is a massively successful footwear and sports apparel company that has enjoyed strong penetration of global markets. In the major European markets, Adidas has parlayed its historical reputation for affiliation with professional football and athletic competition into a vaunted status, and its acquisition of Reebok in 2006 positioned it to remain atop its perch there. However, the United States remains the world's largest and most lucrative footwear and sports apparel market, and this is the core focus of the case study examined here.

The case details the struggles Adidas has experienced in capturing the interest of American consumers. Although it achieved some markedly encouraging success with the Tracy McGrady-sponsored basketball shoe, the broader failure to compete adequately with Nike in the American market motivated dramatic restructuring. Adidas divided its operation into three separate footwear divisions in an effort to emphasize its primacy as a sporting goods company.

In order to improve its fortunes in the American marketplace, Adidas detached itself from the London-based advertising firm that had historically handled its promotions and brand image. Partnering instead with a firm based in Los Angeles and another based in the Netherlands, Adidas sought to reposition itself within a global context. It has nonetheless centered its efforts on sports of global interest even as it attempts to corner the U.S. market. This is evident in the partnership developed with international football star David Beckham. As the case study notes, "following Beckham's highly publicized move from Real Madrid to Los Angeles Galaxy, he signed a five-year, $250 million contract. Beckham will be featured in a variety of media, including billboards and prime-time television ads . . . As Stephen Pierpont, vice president for brand marketing at Adidas, said, 'The U.S. market has a real opportunity to grow. Football has always been a core sport for Adidas. We hope David will be a catalyst for growth.'" (Case 13.1, 467)

Targeting the American Consumer

Adidas' approach to seizing the American market appears somewhat misguided in its focus. All evidence suggests that it continues to lag behind Nike in this largest of markets because it has failed to properly capitalize on the professional sport culture that dominates the United States. The celebrity stature of professional athletes represents perhaps the greatest driver of the U.S. market's singular importance as a sports footwear market.

The ad campaign that seeks to redress this issue by focusing on Adidas' heritage as the primary provider of footwear for Olympic athletes falls somewhat short of the mark. There are a number of drawbacks to this strategy in the U.S. context, not the least of which is the degree to which professional sports generally overshadow the Olympic Games in American cultural life. The general public's intense interest in professional sports makes the Olympics a secondary cultural moment for American buyers. The fact that the Games occur only once every four years further means that their visibility and cultural permeation are far overshadowed by the daily rhythm of sports broadcasts and sports coverage.

Adidas appears to have misjudged the American market despite its success with the McGrady shoe. That success should be seen as a precedent to be repeated rather than an isolated achievement.

Branding and Slogan Strategy

The new slogan "Nothing Is Impossible" may resonate with the buying public to some degree. However, it lacks many of the qualities that make "Just Do It" so iconic a tagline. The sense of imperative present in the Nike slogan is simply absent from the "Nothing Is Impossible" concept. It reads more as an adage or motivational phrase than a company slogan, and it lacks the clear sense of action and urgency that Nike's tagline conveys. Instead, it presents a claim that many consumers may be reluctant to embrace for its hyperbolic nature.

The simplicity and universality of Nike's slogan are among its core strengths — qualities that the newly proposed Adidas slogan does not offer to consumers in the same way.