RE: Adidas Runs After Nike
After reading Riley Lowe’s recent post about “Adidas catching up to Nike”, it had reminded me of the transient strategy that was reviewed in class. Riley discusses how the recent success of Adidas, was the result of acquiring Kasper Rorsted and collaborating with celebrities. He continues to discuss, how “collaborating with big names” such as Kayne West or Pharrell Williams, isn’t a sustainable competitive advantage and that competitors, for example Nike, could also collaborate with celebrities. Therefore, Riley suggested employing a “scout” to identify and sign upcoming stars.
In addition to collaborating with big names, I think another factor for their recent success is the development of new technology; for example their “Boost Technology” that is featured in their running shoes. By partnering their innovative technologies and celebrities, Adidas has created a hype for the products that the collaborators feature and a hype for the technology itself. A key example of that is Kayne West. His current line of footwear, which feature “Boost Technology”, are known as “Yeezys” and are flying off the shelves; and furthermore the Adidas “Ultraboosts” running shoes have also been in high demand.
I think Adidas operates with the fact that sustainable competitive advantages are no longer achievable. Therefore, they need to continue to innovate and disrupt the market with new technologies and continue to supply fresh new faces for their customers. Adidas will launch a product with a celebrity and ramp up the production of their lines. They’ll continue to exploit the celebrity and the product until they are no longer in the spotlight. As the sales and demand of a product decreases they would have to reconfigure the strategy of the product and then eventually discontinue the product. Within that timeline, Adidas should have produced a new technology or found a new celebrity to feature with their new product.
If they are able to constantly innovate and develop new technologies that cause a frenzy for their products, they will eventually catch up to Nike and surpass them.
Picture Source: http://www.royalfashionist.com/wp-content/uploads/2014/04/Kanye-West-x-adidas.jpg
Sources:
Thomasson, E. (2016). Adidas’ new CEO is making it his mission to go after Nike. Retrieved October 01, 2016, from http://www.businessinsider.com/adidas-new-ceo-wants-to-close-the-gap-on-nike-2016-9