Marketing Strategy Michael E. Porter s The Five Forces Model

Introduction This essay is based on Harvard Business School Professor and the father of modern business strategy Michael E. Porter’s â€Å"The Five Forces Model† (1979) and â€Å"The Value Chain† concept (1985) which will be critically analysing the internal and external competitive factors of â€Å"Adidas† sports brand company by applying Michael Porter’s theoretical frameworks that can be used to develop successful strategy for taking the company forward. Introduction of Adidas The global retail sporting goods market is enormous, â€Å"The market is forecast to reach an estimated $266 billion in 2017†. (Thomasson, 2014)Adidas AG international largest sportswear manufacturer in Europe and second biggest in the world after Nike. â€Å"Adidas business was†¦show more content†¦Ã¢â‚¬Å"Our supply chain is global and multi-layered, with many different types of business partners, some of whom are directly contracted factories, while others are not.† (Adidas Group Website) Adidas AG has many alternative multinational suppliers that give the business massive advantage of switching factories easily when needed also high competition among suppliers have significant impact on raw material prices therefore Adidas has bargaining power over suppliers and for these reasons power of suppliers are low. For example, speaking to Bloomberg, â€Å"Anne Putz†, Adidas spokeswoman, said: We have lower purchase prices, as we can buy larger quantities of shoes and apparel. (Procurument Leaders, 2007) Power of Buyers Bargaining power of buyers is high as there are many alternative sports brands i.e. Nike, Puma, Under Armour and some smaller brands out there, for consumers to choose new styles, better price, higher quality etc. Also the buyer has advantage of switching between these brands easily with no extra cost. Threat of Substitutes There are many kinds of competitive brands who retail sports clothing for example Fred Perry, Converse, Lacoste, North Face amongst many others who are a big threat of substitutes for Adidas and also firms who are applying new technologies focused on sports relating clothing and accessories but fortunately Adidas has established a loyal customer base and continue to appealShow MoreRelatedPorter Five Forces3056 Words   |  13 PagesIn today s dynamic and competitive business environment, survival, growth and profitability are the essence goals of all industries. 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