Abstract
This case will reveal outstanding examples of using the theoretical models of the world’s largest companies in sportswear & shoes, demonstrating how Nike Inc & Adidas Group developed their business strategies. The intelligent usage of various economic theories allowed both organizations to achieve the highest levels of performance and gain a competitive advantage in the intense sportswear market. This example will further showcase how the approach of the two companies made leadership management more experienced, effective, and resilient to changes in the business market.
Introduction
Nike Inc. and the Adidas Group are two of the best-known sports brands globally. They are famous for their high-quality products, innovative marketing campaigns, and creative business approaches. Nike has a more extensive business scope among the two companies, with global profits reaching approximately $46.7 billion in 2022, compared to $44 billion in 2021 (Tighe, 2022a). Nike was founded in January 1964 and is now the world’s leading supplier of athletic footwear and an influential sportswear manufacturer. In 2022, the company employed nearly 80,000 people worldwide. On the other hand, Adidas generated $21.23 billion in sales in 2021, constituting approximately half of Nike’s revenue (Tighe, 2022b). While there is a significant gap between the companies’ profitability, Nike and Adidas remain the most competitive organizations in the industry of sportswear.
Both brands offer a wide range of high-quality products and focus on innovation, which can explain the popularity of Nike and Adidas. According to Gurtoo (2020), most people with an active lifestyle, including athletes and travelers, highly value the quality of footwear, and the goods from Nike and Adidas are some of the best items in the market. Both brands are famous for their sportswear, sneakers, traveling boots, and other apparel items (Gurtoo, 2020). However, both companies have been in the market for decades and earned this popularity with utmost effort.
The rivalry between the two companies has been a relevant topic for several decades. Nike and Adidas continually compete for market share in the industry of sportswear, and other companies frequently use this rivalry as an example of effective theoretical models and business approaches (Khan, 2020). Depending on the perspective, Nike and Adidas have unique strengths, weaknesses, opportunities, and threats that might be helpful in analyzing the organizations’ strategies. Ultimately, the current report thoroughly examines the history, organizational theories, and business models of Nike and Adidas to determine the primary differences between the companies and explain their outstanding performance.
History of Nike and Adidas: Nike History
Established in 1964, Nike has a rich history of operating in the sportswear industry. It was founded by Phil Knight and Bill Bowerman under the name of Blue Ribbon Sports (Parker, 2022). Although Knight and Bowerman started small and traveled across the United States, selling sports apparel and footwear, it was the pivotal moment for the company that would become the largest organization in the sportswear industry. At first, they distributed the goods of Onitsuka Tiger – a Japanese manufacturer of footwear operating in the United States (Parker, 2022). However, as time passed, the company was gradually expanding, hiring more employees and generating more profits. In 2021, Nike’s profitability reached $42 billion, undoubtedly becoming the largest company in the sportswear industry (Parker, 2022). Moreover, Nike has a good public image and reputation, with Forbes ranking the organization as the 13th-best employer in the United States and the 42nd-best employer globally (Parker, 2022). These numbers transparently demonstrate Nike’s commitment to improving its profitability while maintaining a healthy working environment and fair employment conditions.
Throughout its history, Nike has collaborated with multiple athletes to expand its scope of influence and promote its sportswear merchandise. For instance, the first professional athlete who partnered with Nike was Ilie Năstase – a famous tennis player from Romania (Parker, 2022). The public accepted this approach with positive feedback, and Nike continued collaborating with famous athletes. The company was even able to reinforce its position in rivalry with Adidas when it became the official partner of the NBA in 2015, making the league break the prior contract with Adidas (Parker, 2022). Nike was one of the first companies to start promoting products by collaborating with renowned athletes, and it significantly changed the organization’s history. One of the most influential partnerships was with Michael Jordan – presumably the most famous basketball player. This collaboration initiated the Air Jordan brand of basketball shoes and athletic footwear, further improving Nike’s reputation and scope of influence in the industry of sportswear (Parker, 2022). In summary, Nike has changed from a small company founded by two people to the most well-known sportswear manufacturer over nearly sixty years.
Adidas History
In the history discussion, Adidas has an even richer story than Nike. In 1924, it was founded by Adi Dassler under the name of “Gebrüder Dassler Schuhfabrik” (“About history,” n.d.). It started as a vague idea of distributing sports-related equipment that Dassler worked on in his mother’s kitchen (“About history,” n.d.). It was not highly successful for many reasons, including the lack of business opportunities in Germany at that time. However, when World War II ended, Adi Dassler saw an opportunity and decided to re-register the company under the name of “Adi Dassler Adidas Sportschuhfabrik” (“About history,” n.d.). This time, he worked with multiple employees and had a functional factory to achieve his objective. As a result, his initiatives were rewarded, and Adidas would soon become a highly successful sportswear manufacturer.
Adidas became particularly famous after the decision to invest in football/soccer shoes. In 1954, the German team achieved their greatest triumph by beating the Hungarian team and winning the World Cup while wearing Adidas football boots (“About history,” n.d.). It was an innovative light-weight model that maintained all advantages of prior footwear but changed the weight by modifying the screw-in studs to improve friction (“About history,” n.d.). As a result, when the German team won the tournament, the whole world wanted to invest in Adidas and its product line of football boots.
Similar to Nike, Adidas was among the first companies who started collaborating with athletes to promote merchandise. For Adidas, it was Franz Beckenbauer – one of the most famous football players of all time – who helped the company grow (“About history,” n.d.). Consequently, Adidas partnered with athletes in many sports and achieved even greater popularity. For instance, Bob Beamon set the world record for the long jump wearing Adidas footwear, and the famous tennis player – Rod Laver won the Grand Slam in Adidas apparel (“About history,” n.d.). These achievements transparently reflected the highest quality of Adidas products and the trusting connection between athletes and the company, allowing Adidas to expand further.
After that, Adidas continued to focus its marketing and manufacturing efforts on football as it still remains one of the most popular sports games of all time. The company supplied the official ball for the 1970 World Cup, which consisted of white and black colors for more visibility on older TVs (“About history,” n.d.). For the next forty years, Adidas kept investing in football initiatives, signing contracts with prominent figures like David Beckham and even the Argentinian national team. As mentioned by the company’s leaders, “Football has always been at the core of Adidas’ efforts” (“About history,” n.d.). As a result, Adidas became synonymous with football in the second half of the 20th century, significantly boosting the company’s reputation, profitability, and business opportunities.
Today, Adidas continues its history by supporting multiple initiatives in sports globally and striving to improve the quality of products to meet customers’ needs. The most recent campaign, “Own the Game,” shifts the company’s vision from professional athletes to consumers (“About history,” n.d.). Adidas believes that it is possible to advance in the competitive sportswear market only by elevating customers’ experiences and creating mutual trust between the company and buyers. It concerns not only the quality of the provided products but also indirect factors, such as sustainability, eco-friendly production, and emphasis on social diversity issues (“About history,” n.d.). Ultimately, the rich history of Adidas transparently reflects the rises and falls of the company, showing the company’s efforts and dedication to delivering high-quality products.
Theory of Organizational Behavior
An organizational idea is a set of concepts of how the organization perceives its design, operations, functions, and purposes. Some theories emphasize organizational conduct, contingency ideas, and other factors to develop their structure (Amis & Slack, 2008). For instance, the complexity, formalization, and centralization of organizational decision-making directly relate to the proposed theory of organizational behavior and chosen design (Amis & Slack, 2008). In this context, Nike’s framework focuses on teamwork, self-motivation, and expansion of commercial services via mergers and acquisitions (Amis & Slack, 2008). At the same time, Adidas emphasizes customer service, working conditions of employees, and attention to shareholders’ needs. It is a more business-oriented approach that ensures the company’s influence in the sportswear market. In summary, both companies utilize various theories of organizational behavior, and the consequent chapters thoroughly analyze them.
For instance, according to the Organizational conduct theory, Nike and Adidas try and create aggressive advantages to stay competitive in the sportswear market. The implemented company cultures of both organizations emphasize customer needs, creativity, and innovation. In addition, they have highly unique but immediately recognizable designs, and this approach significantly boosts sales. For example, Nike uses vivid colors like aqua blue and yellow in its walking footwear to sell the product. In comparison, Adidas uses soft grey shading with white stripes as its central line of apparel.
Theory Models Analysis
Nike and Adidas’ competitive interaction can be analyzed using multiple models. For instance, the game theory, the industrial organization theory model (IO), and the economic model theory are some of the prominent approaches. The former examines the relationship between the companies’ strategic actions and profitability. The IO theory focuses on organizational pricing decisions to determine the long-term objectives and market share shifts of the companies. Lastly, the economic model thoroughly analyzes sales and profitability to identify patterns and strategies that boost firms’ performances. Each of the examined models provides answers to various questions about Nike and Adidas. For instance, the IO theory can explain the differences in pricing and how it affects product differentiation to create a competitive advantage. Ultimately, it is possible to thoroughly analyze the performance of Nike and Adidas using the three mentioned theories.
Game Theory
Game theory is one of the central theories in business since it is applicable to most organizational operations in a competitive market structure. In general, this concept refers to the decision-making framework that weighs the advantages and disadvantages of various approaches to the problem (Besharat, 2010). Firms might apply these concepts in their business practices either consciously or not; however, for an organization to develop, it must employ the use of game theory. Companies continually compete for market share, especially when they operate in the same industry, and Nike/Adidas is the perfect example of this type of rivalry.
The competition between these two major sportswear firms is intense, and they cannot afford not to employ the use of game theory concepts in attempts to gain a competitive advantage in the market. An essential aspect of the business is pricing strategy, meaning the customers must perceive a given business’s price as fair, if not lower than that of the competitor (Besharat, 2010). However, some factors, such as quality and advertising strategy, play an essential role in the survival of a firm in a competitive market. Nike competes with Adidas in all aspects of the business environment. In this case, Adidas has two options: it can either choose to use the same methodology as Nike or try to differentiate its products and services, with each of the choices having distinctive consequences. As a result, the application of the game theory can help the company to make a weighted decision and choose an appropriate strategy.
Industrial Organization Theory Model
In recent years, business management has become a more significant element in strategic decision-making due to the changes in the global economy and environment. The competition in most markets continually increases, and the Industrial Organization Theory thoroughly examines how market structure affects businesses and their pricing strategies (Raible, 2013). The competitive strategy that is the central feature of the IO model encompasses five primary principles – cost, quality, delivery, flexibility, and innovation (Krause, Pagell & Curkovic, 2001). Hence, Industrial Organization (IO) theory focuses on how these underlying factors affect companies’ decision-making protocols (Raible, 2013). This approach allows identifying patterns and trends in most industries, which might be helpful in the analysis of Nike and Adidas.
IO Theory Application for Nike
Nike Inc. is a dominant force in the international market for sports shoes, gear, and equipment; hence, it is possible to use the Five Forces Analysis to examine the factors that affect Nike’s strategy. To comprehend how outside forces affect enterprises, Michael Porter created the Five Forces Analysis paradigm (Rowland, 2017). According to these five indicators, competition is one of the most important external factors for Nike. Since its foundation in 1964, the business has maintained its top spot in the global industry landscape (Rowland, 2017). However, Nike Inc. must continue to consider the five forces and related external factors to maintain its competitive position in the market.
Various external sources determine the strength and intensity of forces affecting Nike Inc. Based on the current analysis, the following are the elements that are currently having the most significant impact on Nike’s performance and business climate in the market for athletic footwear, gear, and apparel (Rowland, 2017):
- Rivalry and conflict between competitors (Strong Force)
- Purchasing and bargaining consumer power (Moderate Force)
- Suppliers’ negotiating power (Weak Force)
- Threats of substitution (Moderate Force)
- Threat of admission of new parties (Weak Force)
IO Theory Application for Adidas and Porter’s Forces Explanation
Adidas is another example of a prominent company in the sportswear industry that utilizes Michael E. Porter’s approach to competitive factors. Porter’s five forces model is a tool that is used to analyze an industry and understand the underlying forces that shape competition within it (Pádraig, 2017). The model takes into account five different forces, each of which will be described in the current chapter in relation to how Adidas utilizes them to achieve a competitive advantage.
The first factor is the threat of new entrants, which examines the challenges for new companies to enter the market and compete with existing firms. The second force is the bargaining power of buyers – it analyzes how much consumers can purchase in the market based on their finances and the necessity to buy products (Pádraig, 2017). The bargaining power of suppliers is the third factor determining the suppliers’ leverage to negotiate prices and terms with buyers (Pádraig, 2017). Consequently, the threat of actual substitution refers to how easy it is for customers to find similar products and services in the market. Lastly, the rivalry intensity determines the level of competition in the market.
The mentioned factors clearly designate the challenges for companies to stay relevant in the market. Moreover, it demonstrates which of the factors organizations should focus on to create a competitive advantage – a value that is greater than the value of the competitors (Pádraig, 2017). Companies can achieve it through product differentiation, intelligent pricing strategies, innovative services, focus on customer experience, and other multiple business strategies.
In this context, Adidas carefully considers all five forces of Porter’s framework and acts accordingly. For instance, the recent “Own the Game” campaign transparently emphasizes customer experience as the organization’s primary objective, and it might help Adidas obtain a competitive advantage (“About history,” n.d.). Moreover, Adidas has a highly notable brand, a positive public image, and a large number of loyal customers due to the rich history of the company. This advantage enables Adidas to attempt innovative approaches and mitigate some of Porter’s forces. Lastly, Adidas has a very efficient supply chain and manufacturing process, allowing it to produce high-quality products at a lower cost than its competitors. In summary, these factors have allowed Adidas to be successful in the sports apparel industry.
Economic Theory Model Application
An economic model is a theoretical framework that performs data analysis on the sales and profits of the chosen company over some time to find any trends or links that may exist between the two companies. Businesses generally utilize this economic model theory to decide how to allocate resources to maximize profits effectively. It is a broad concept that implies a variety of strategic instruments and techniques to choose the most appropriate course of business development.
Businesses may utilize this notion to improve their pricing and production plans. The economic model theory may also be used to evaluate how economic changes affect a company’s operations (“11 types of economic theories,” 2022). In their respective firms, Nike and Adidas have both used the economic model theory. Nike has used this approach to enhance its pricing and manufacturing plans (“Nike, Inc.,” n.d.). Moreover, Nike has utilized the idea to evaluate how economic changes may affect its company. Adidas has also used the notion to enhance its pricing and manufacturing plans (“Adidas Group AG,” n.d.). These facts clearly demonstrate that the implementation of economic theories in practice is a highly effective instrument for business development.
In other words, the economic model theory is a combination of multiple tools and instruments that both Nike and Adidas use to decide what things to sell and how much to charge for those products. They determine their pricing strategies according to this model to avoid losing clients to other companies. Moreover, the implementation of economic theories allows them to maintain a proper balance between profitability and ensuring that all customers’ needs are satisfied.
Business Models
Consequently, it is crucial to examine the impact of various business models on the performance of Nike and Adidas. For instance, the research work by Amit and Zott (2001) demonstrates that a thorough business model analysis is necessary for strategic management research because it influences firms’ conceivable outcomes for value creation. Ultimately, the current chapter examines the theoretical business models used by Nike and Adidas.
Theoretical Business Models
Competitive advantage is the crucial concept in this discussion because most business models aim to differentiate the company’s products and services to improve its position in the market. Hence, successful businesses must develop a competitive advantage and mitigate potential barriers in the industry (Mansfield & Fourie, 2004; Teece, 2010). For instance, the research by Mahdi, Abbas, Mazar, and George (2015) shows that the business models of Nike and Adidas have many similar elements but different development directions. Nike primarily focuses on innovation and research & development (RD) areas to achieve product differentiation in the sportswear market (Mahdi, Abbas, Mazar, & George, 2015). On the other hand, Adidas emphasizes customer experience, expansion in emerging markets via mergers, and a culture of diversity (Mahdi, Abbas, Mazar, & George, 2015). Hence, a thorough analysis of business models can help understand the causes of these companies’ outstanding performance.
Moreover, the concept of business models in economics is highly detailed and can provide insights into other areas of the companies’ development. Namely, it can be discussed from multiple perspectives, such as e-business, information systems, strategy, and management (Osterwalder & Pigneur, 2005; Zott & Amit, 2007). A complete business model description can reveal the company’s value creation strategy and assist managers in establishing a business direction for the organization (Osterwalder & Pigneur, 2005). In turn, it helps the company to expand its scope of influence, obtain new partners, and generate profitable relationship capital by boosting the business network.
Culture Assessment of Nike and Adidas
To begin with, it is imperative to note that Nike and Adidas are both sportswear giants that have shaped the industry for decades. Both companies have their unique culture and assessment processes that help ensure their employees are a good fit for the company (Arora & Stoner, 2009). Moreover, it helps companies measure their culture and identify areas that need improvement. Hence, understanding the culture of the companies is critical to evaluate the causes of their high performance.
The cultural assessment covers four primary areas: values, leadership, engagement, and organizational health. Ensuring the highest quality of these parameters helps organizations create a more positive and productive work environment (Mahdi, Abbas, Mazar, & George, 2015). Additionally, it can be used to evaluate employees’ satisfaction with organizational culture. This assessment examines whether employees are content with the business direction, the company’s values, and whether they experience a sense of belonging in the workplace (Mahdi, Abbas, Mazar, & George, 2015). Experts commonly utilize a set of questions for employees to analyze their perception of the companies and their organizational culture.
Considering Nike and Adidas, both companies have unique cultural identities and are generally considered some of the best employers in the global market. For instance, Forbes has been ranking Nike and Adidas as top-100 best companies to work at, and this statistic transparently shows that employees are content with organizational culture (Parker, 2022). This achievement reflects how critical it is for companies to ensure competitive advantages by adhering to employees’ needs (Mahdi, Abbas, Mazar, & George, 2015). In their cultural assessments, both companies focus on team building, collaboration, and their rich history to make employees motivated (Mahdi, Abbas, Mazar, & George, 2015). Adidas calls this approach “One Team” and tries to unite employees through positive values, such as passion, integrity, and diversity (Mahdi, Abbas, Mazar, & George, 2015). On the other hand, Nike focuses more on innovation and development to create a sense of curiosity and enthusiasm among workers to motivate them (Mahdi, Abbas, Mazar, & George, 2015). Ultimately, both companies benefit from highly unique cultures, and it helps them to maintain a competitive advantage in the sportswear industry.
SWOT Analysis of Nike and Adidas
Nike and Adidas are known for producing high-quality athletic wear that is widely worn worldwide. Nike is a significantly larger firm than Adidas, offering a significantly more varied selection of products. However, Nike’s most significant flaw is that it is overly dependent on the market in the United States (Kissinger, 2022). Adidas’ strength lies in its widespread brand awareness, high product quality, and robust financial position. The company is gradually expanding its reach in the United States (Kissinger, 2022). Moreover, both brands are known for their quality products and innovative marketing campaigns. The overview below thoroughly examines the strengths and weaknesses of Nike Adidas.
SWOT Nike Analysis
Nike’s SWOT analysis demonstrates why it is the most well-known sportswear brand globally. The company has unique and notable strengths, such as the most advanced product innovation, global distribution networks, and a highly favorable reputation (Kissinger, 2022). As a result, Nike is an evident leader in the athletic apparel industry, and the revenue of $46 billion in 2022 clearly reflected Nike’s advantageous position in the market (Tighe, 2022a). However, it has several weaknesses, primarily concerning its focus on the market in the United States and a lack of retail shops owned directly by the company (Kissinger, 2022). In other words, Nike distributes its products through a large variety of intermediary locations, and it creates additional problems for supply chains and logistics.
Consequently, Nike has multiple opportunities in the sportswear market due to its favorable reputation and extensive resources. Most people globally can recognize the Nike brand immediately, and this popularity increases the company’s scope of influence. Another remarkable opportunity is that Nike can focus on sustainable business practices and adhere to the principles of the organizational behavior theory (Kissinger, 2022). Emphasis on employees’ working conditions and customers’ experience can significantly boost Nike’s popularity. The major threat to Nike is an intense rivalry with Adidas and other relevant sportswear companies that continually compete for the top position in the industry (Kissinger, 2022). In other words, Nike must address all emerging issues, including product differentiation from other companies, the development of innovative approaches, and pricing strategies. Lastly, the most notable brand in the world has several associated disadvantages. For instance, multiple companies fabricate Nike’s products and sell them, benefitting from Nike’s reputation (Kissinger, 2022). It is a relevant problem for Nike since such goods are usually low-quality and might create additional legal problems.
SWOT Adidas Analysis
Adidas is generally considered one of the top three sportswear brands globally and has a positive reputation similar to Nike. One of its notable strengths is its rich history dating back to 1924 and its solid connection to football’s history (Gupta, 2022). As mentioned in the previous chapters, Adidas was the first relevant brand to become the official partner of the football World Cup tournaments and introduce associated products (“About history,” n.d.). Even today, Adidas’ legacy creates to attract football fans worldwide, enhancing the company’s reputation. Another strength is Adidas’ intelligent geographic distribution and marketing strategy that connects various parts of the world (Gupta, 2022). Some of the weaknesses include the organization’s dependence on Asian suppliers, relatively high prices, and little relevance in the United States. The problem emerges because more than 70% of all Adidas products are manufactured in China, Cambodia, and Vietnam, creating “a risk of over-dependence” on foreign suppliers (Gupta, 2022). Moreover, it negatively affects supply chains, which can explain the low relevance of the company in the United States.
However, there are multiple opportunities for Adidas to mitigate its weaknesses. For instance, an emphasis on e-commerce can address supply chain issues and help the company become more relevant in distant markets, such as the American sportswear industry (Gupta, 2022). Additionally, Adidas could focus on research and development to create innovative product lines and gain a competitive advantage. Similar to Nike, the primary threat is intense rivalry among the top sportswear brands (Gupta, 2022). While it is a relevant danger for the companies, it also stimulates them to plan new marketing strategies and product lines. The second critical risk is that over-dependence on suppliers might cause a financial crisis for the company if these suppliers achieve more bargaining power than Adidas itself (Gupta, 2022). Hence, Adidas should address these issues before losing authority in negotiations with suppliers.
Conclusion
The current paper has examined different theoretical models that can be applied to Nike and Adidas, focusing on the game theory, industrial organization theory, economic model, SWOT analysis, and organizational behavior theory. All models are relevant and effective instruments of business analysis that have provided valuable insights into the operations of Nike and Adidas. The findings presented below are the most significant conclusions about the performance of the two companies:
- Game Theory: According to this model, Nike and Adidas are dominant forces in the market, and their position creates a competitive advantage. They have extensive resources and utilize innovative approaches to stay relevant in the sportswear industry. Moreover, the game theory assumes that both companies should make their business decisions to maintain an advantageous position in the market (Daly, 2011). Hence, the decision-making process of both companies should focus on the market share.
- Industrial Organization Theory: According to this theory, Nike and Adidas must be responsive to the needs of their industry. It requires additional attention to the trends in the sportswear and retail industries because these business areas are changing rapidly (Gomez-Mejia, Balkin, & Cardy, 2010). For instance, it is critical for Nike and Adidas to consider new methods of employee engagement and creative approaches to customer satisfaction to meet the social needs of the industry. In summary, Nike and Adidas should carefully consider the trends of the industry and adapt accordingly based on the IO theory.
- Economic Theory: The economic model implies that organizations must use their resources efficiently. This framework is a broad concept that directly relates to Porter’s Five Forces and other prominent economic theories (Porter, 1985). In other words, companies should carefully evaluate their resources to mitigate emerging challenges in the industry, such as Porter’s five factors and multiple external threats. Following these guidelines, Nike and Adidas have been highly successful and maintain an advantageous position in the market.
- SWOT Analysis: The SWOT model is one of the most well-known instruments of analysis that carefully examine the strengths, weaknesses, opportunities, and threats of companies (Vlados, 2019). According to this framework, Nike and Adidas have unique strengths and opportunities, such as different geographic relevance and product lines. Hence, the companies should benefit from their distinctive advantages to mitigate their weaknesses and potential risks.
- Theory of Organizational Behavior: This theory emphasizes social resources, such as companies’ leaders, employees, and customers. According to this model, it is imperative to motivate all associated stakeholders and improve their experience (Robbins, Judge, & Sanghi, 2001). This approach is particularly significant for Nike and Adidas because both companies have many employees and are generally considered some of the best employers globally. As a result, if they fail to address employees’ needs, the reputation of the two companies might drastically worsen, and they will lose their competitive advantage in the sportswear market.
Recommendations
Nike and Adidas could apply a few different theoretical models to their businesses to improve their overall performance. The first model is the resource-based view of the firm, which suggests that a company’s competitive advantage lies in its ability to utilize its resources and capabilities more efficiently than its competitors. It means that Nike and Adidas need to focus on developing their core competencies and capabilities and using them to create unique products and services that other firms cannot easily replicate. Another theoretical model that could be useful for Nike and Adidas is Porter’s Five Forces model, which helps companies analyze the competitive environment they are operating in and identify the primary sources of competitive pressure. This model can help Nike and Adidas to understand the competitive landscape they are operating in and develop strategies to stay ahead of their competitors.
Finally, the stakeholder theory suggests that a company’s success depends on its ability to create value for all of its stakeholders, not just shareholders. It implies that Nike and Adidas need to focus on creating value for all of their stakeholders, including employees, customers, suppliers, and the communities they operate in. By creating value for all their stakeholders, Nike and Adidas can create a sustainable competitive advantage that will help them stay ahead of their competitors in the long run.
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