Adidas is a German based multinational corporation and become one of a global company. The company employ more than 59000 people. All employees belong to around 100 nations working at the global headquarter in Herzogenaurach. In 2019, the company produced more than 1.1 billion products with all the independent manufacturing allies across the globe. Adidas is one of the biggest multifaceted and large organization. Adidas keep the things lean, fast and simple. It is the biggest sports company in Europe and second biggest across the globe, first is Nike (Adidas, 2020).
VRIO analysis is a marketing analysis tool, which helps the company in evaluating the company’s resources and capabilities. VRIO analysis is the acronym of Value, rareness, imitability and organization. Here is the detailed VRIO analysis of Adidas.
Value
This is the first component of the VRIO analysis which identify how valuable company’s resources are? It works with whether company is able to exploit new opportunities with its resources or overcome the threats. Well, Adidas is a big name in the sports and apparel industry, innovation is the main strength for the company. This is essential for the customers also as this is in-line with the continuous change tastes in consumer demands. Adidas innovates it to increase the performance, hence this is a valuable resource for the company. Adidas has strongly developed the brand image and equity which helps the company achieving the customer loyalty. The company works efficiently and gained competitive advantage in the industry through this (Alsbiei, 2015).
Rarity
The second component of the VRIO framework is rarity, which determines how unique the resources are? Resources will be rare if it’s not available to other companies. The marketing strategies and product innovation of Adidas are very rare and unique. Not all companies are able to bring new innovative or creative ideas, but market leaders like Adidas or Nike can. Adidas’s product portfolio is also very rare, as the company was also engaged in diversification. Not all companies are able to manage the successfully diversified business segment like Adidas did with the help of partnership or strategic alliance. Adidas has successfully maintained its competitive advantage and use this component to achieve success (Arsalan, 2018).
Imitability
This component of VRIO analysis is to determine how difficult the resources of the company are to imitate. The company will determine significant cost disadvantage for the company trying to develop, duplicate, or obtain capability and resources. Adidas has global presence. It is operating across the globe with its unique design and apparel. Adidas strategies are very difficult to imitate as it did a good job in branding itself. Competitors always have to be on toes as the Adidas always bring some additional or unique piece of the table. Adidas is able to manage the supply chain network and distribution channels (Alsbiei, 2015).
Organization
This is the fourth and last component of the VRIO framework. This determines how well the company is organized and managed. Adidas is in the market since a long time, the company has developed the resources well organized and well-equipped. Adidas has successfully managed the supply chain and distribution channel. The company keeps the stock well updated and maintained. Adidas works according to the consumer preference and demand. Adidas has maintained and used the resources very well and exploit the opportunities. The company also use its capabilities for mitigating the risk and eliminate the threats (Pratap, 2018).
Conclusion
Adidas is one of a renowned apparel and sportswear manufacturing company which is currently working for more than 60 years. It is the second biggest sportswear company in terms of market growth and market share. The strategy and products of the company are highly innovative, and the company is successful in making the resources and capabilities rare, valuable, imitable and organized. It helps the company in achieving competitive advantage.
| Resources/Capabilities | V | R | I | O | |
| Supply Chain | ✓ | ✓ | ✓ | Competitive Parity | |
| Technology | ✓ | ✓ | ✓ | ✓ | Competitive advantage |
| Global Presence | ✓ | ✓ | ✓ | Temporary advantage | |
| Brand Equity | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Marketing | ✓ | ✓ | ✓ | Temporary advantage | |
| Product quality | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Customer loyalty | ✓ | ✓ | ✓ | Temporary advantage | |
| Talented HR | ✓ | ✓ | ✓ | Temporary advantage |
References
Adidas, 2020. About us. [Online], Available at: https://www.adidas-group.com/en/group/profile/, [Accessed on: 22nd March, 2020].
Alsbiei, O. 2015. Adidas Group Strategy analysis. [Online], Available at: https://www.researchgate.net/publication/281740663_ADIDAS_GROUP_Strategy_Analysis, [Accessed on: 22nd March, 2020].
Arsalan, 2018. Adidas internal and external analysis. [Online], Available at: https://academic-master.com/adidas-internal-and-external-analysis/, [Accessed on: 22nd March, 2020].
Pratap, A. 2018. Adidas Strategic Analysis. [Online]. Available at: https://notesmatic.com/strategic-analysis-of-adidas-group/, [Accessed on: 22nd March, 2020].