Task 2: Digital Marketing Consultancy
Nike is the world's largest sports footwear company, bringing in over
$28 billion in sales in 2021. Adidas's nearest competitor, Nike, has a total
footwear income of less than half of Adidas's. In spite of being beaten to the
punch by Nike in the worldwide market, Adidas is one of the world's most significant
businesses. About 340 million pairs of shoes will be manufactured by the
company's sports footwear segment in 2021. Adidas produced nearly 450 million
pairs in 2019, which is the company's greatest total to record, according to a
press release. Adidas, being a multinational corporation, makes money all over
the world. However, the EMEA area is where Adidas makes the most money. North
America and the Greater China region are the next two regions to follow.
Relationships with consumers
Nike guarantees to stand behind most of the company's goods for both
consumers and retailers (Nike, 2014). Searching for information about Nike's
customer service rules is possible on the company's website thanks to the
search tool. Intelligent automated response technology provides the answers.
Answers to frequently asked questions are also available online (FAQ). Nike is
able to have a strong line of contact with and a deeper knowledge of its clients
thanks to this initiative.
For large corporations, creating a
tale is a way to connect a concept and an emotion. Customers may build links
between companies and their beliefs, sentiments, or concepts by using this
method. While many businesses use story as a marketing strategy, Adidas has
been particularly effective at it, using decades' worth of background and
relationships to create a strong and lasting bond with its customers. "72&Sunny,"
a creative firm, was hired by the corporation in 2015 in an attempt to place
"aggressive narrative" at the forefront of their ad campaign.
PESTEL and SWOT Analyses of Nike and Adidas
Political
The Andijan region of Uzbekistan will soon be producing Nike and Adidas
sports shoes. The chairman of the country's Uzcharmsanoat Federation, Fahriddin
Boboyev, told the newspaper Economic Review magazine that the organization has
struck several agreements with the businesses.
Since Uzbekistan has a large supply of high-quality leather and a low
cost of labor, the country will be able to manufacture clothing for more global
brands in the future, according to Boboyev. Central Asia's newest textile and
footwear manufacturing hotspot is Uzbekistan, according to him.
According to Nike and Adidas, we've achieved an agreement about their
entrance into our market. Andijan will become a hub for the production of
sports shoes, according to Boboyev. The administration of Tashkent Region
declared in 2018 that it will establish a free economic zone dedicated to the
production of sportswear and sports equipment. Adidas, Reebok, Nike, Li Ning,
Eleiko, Janssen-Fritsen, and Gymnova, among others, were among the worldwide names
that it intended to recruit with such a zone.
Economic
As a result of job losses and reduced earnings, sales fell by 12%. The
company's shares dropped up to 28%. Nike has reacted to the new climate by
slashing expenses and 5% of its personnel, the company's largest ever layoff.
Nike survived when others failed. It's the same in 2020, when the COVID-19
epidemic causes another economic catastrophe. Due to significant shop closures,
worldwide revenues fell 38% in the fourth quarter. This exposed the company's
dependence on high street businesses and their impact.
Adidas is among the world's most prominent corporations. The economic
quotient of the firm is affected by economic issues such as unemployment, wage
rates, taxes, inflation, and interest rates. Consumers of a certain brand tend
to have a particular way of life because of their affinity for the brand's
goods. Adidas produces labor-intensive,
low-cost items in China. Especially as compared to North America. Adidas must
manage material costs wisely. But importing/exporting commodities is a constant
difficulty. And the growth of knockoffs hurts Adidas' sales.
Social
During the late 1970s-early 1980s, a fascinating culture called
sneakerhead emerged inside the footwear sector. Nike knows its consumers, their
interests, and their role models. When Michael Jordan did his famous leap, he
won every game. Michael Jordan was a global phenomenon. Nike is also mindful of
the changing values of its most significant clients. Nike anticipated a
criticism from a specific portion of its client base when it released its 2018
Dream Crazy campaign. And it did. Not worried since this ad was targeting a
certain client base that the business wanted to engage with.
Adidas modifies product designs. Designs appeal to customers. Many
products cater to every age, gender, or lifestyle. But their target market is
health-conscious sports fans. To be relevant, they must stay up with changing
health trends. Corporate volunteer initiatives are available. They help
communities and people. Adidas also sponsors the Olympics, allowing them to
harness marketing possibilities and reach new global audiences.
Technological
Most developments originate from Nike's own Sport Research Lab. These
include Nike's Flywire support system and the Hyperdunk basketball sneaker.
Nike Fit, a foot-scanning system, finds the ideal fit for each individual. When
it comes to finding your perfect fit, Nike Fit leverages a distinctive blend of
computer vision and data science.
Though Adidas has established a few Speedfactories to increase
manufacturing speed. This technique must be expanded to other plants in Asia
and beyond. It should also integrate data collecting technologies into its
goods to assess athletes and customers. This is how Adidas can enhance productivity,
market share, and brand loyalty.
Environmental
Nike used to be associated with sweatshops and environmental damage.
Also, the company has come a long way in terms of being eco-friendly and
sustainable. However now pledged to utilize sustainable energy and cut shipping
emissions.
Adidas strives to utilize as little prohibited and restricted material
as possible in its goods and shops. Carbon emission reduction and green
business 2020 objectives are also corporate commitments. "low waste
initiative program" will be used to make products and garments.
Legal
The corporation was sued in the late 1980s for failing to report bad
working conditions. Adidas has a lengthy history of patent infringement
lawsuits against it. Nike has launched a lawsuit against Skechers for
infringement of design patents. As a result, the worldwide sports footwear
industry is predicted in 2026 to reach an approximate total of Us$ 96.10
billion.
SWOT
Strenghts
Nike has been known as a "Can Do" corporation because to the
"Swoosh" emblem and the catchy phrase that accompanies it. Since all
of the company's production is done outside the United States, it has no
manufacturing facility of its own.
Since its founding, Adidas has placed a high value on the quality of its
goods above all other considerations. One of the key reasons contributing to
the company's ever-expanding customer base is the availability of innovative,
high-quality products.
Weaknesses
Since the original nike and adidas products are very expensive in
Uzbekistan, most of the population does not have the opportunity to produce
products, it is also a small salary for a citizen of Uzbekistan. For example,
let's take Nike, in the capital of Uzbekistan there is only one official
store. The minimum number of official
stores of these two companies is a weakness in our country as well.
Opportunities
A few years ago, Adidas and Nike did not have a good opportunity to
advertise themselves and were forced to sell their products mainly outside the
digital world. At the moment, they have
their own websites, mobile applications, trading accounts in many social
networks such as Instagram, Facebook, etc.
Threats
Because of the danger of competitors from other sports goods and
accessory makers who sell their items for less, there are many different brands
and styles to choose from. Piracy and false copies are also a problem for
Adidas and Nike.These two firms will face greater rivalry if local companies
are accessible in each of their respective nations.
Recommendations
Nike and Adidas are great at presenting themselves to customers, with
their design, logo and culture. They
should focus more on collaborating with other big companies like Puma or New
Balances. Also, they may collaborate
more often with well-known pop culture or sports artists. In addition, they can expand the models of
their shoes in some regions.
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