How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict
During its 50-year history, adidas had spent heavily to establish its three-stripe logo as a symbol for athletic achievement. When value-priced shoe retailer Payless ShoeSource started selling athletic shoes with two or four vertical stripes, adidas brought an action against Payless. adidas claimed Payless' lower-cost athletic shoes could dilute its famous logo in the minds of consumers and tarnish its brand by association with a lower-quality product. In 2008, the jury found in favor of adidas, awarding $305 million, believed to be the largest verdict in a trademark case. In this case students examine the histories and brand status of adidas and Payless as well as both companies' legal arguments before discussing consumer psychology, branding, and whether the jury made the right decision.
Swot Analysis of "How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict" written by Michel Tuan Pham includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Payless Adidas facing as an external strategic factors. Some of the topics covered in How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict case study are - Strategic Management Strategies, Ethics, Market research and Global Business.
Some of the macro environment factors that can be used to understand the How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict casestudy better are - – geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Payless Adidas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Payless Adidas operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict can be done for the following purposes –
1. Strategic planning using facts provided in How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict case study
2. Improving business portfolio management of Payless Adidas
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Payless Adidas
Strengths How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Payless Adidas in How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict Harvard Business Review case study are -
Effective Research and Development (R&D)
– Payless Adidas has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Global Business field
– Payless Adidas is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Payless Adidas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Payless Adidas are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Payless Adidas in the sector have low bargaining power. How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Payless Adidas to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Payless Adidas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Payless Adidas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Payless Adidas has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Payless Adidas in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Payless Adidas is one of the leading recruiters in the industry. Managers in the How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Payless Adidas is one of the most innovative firm in sector. Manager in How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Global Business industry
– How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict firm has clearly differentiated products in the market place. This has enabled Payless Adidas to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Payless Adidas to invest into research and development (R&D) and innovation.
Learning organization
- Payless Adidas is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Payless Adidas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict, in the dynamic environment Payless Adidas has struggled to respond to the nimble upstart competition. Payless Adidas has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict, it seems that the employees of Payless Adidas don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Payless Adidas needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Payless Adidas products
– To increase the profitability and margins on the products, Payless Adidas needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Payless Adidas supply chain. Even after few cautionary changes mentioned in the HBR case study - How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Payless Adidas vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Payless Adidas, firm in the HBR case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict can leverage the sales team experience to cultivate customer relationships as Payless Adidas is planning to shift buying processes online.
Products dominated business model
– Even though Payless Adidas has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Payless Adidas is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Payless Adidas has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Payless Adidas has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict are -
Loyalty marketing
– Payless Adidas has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Better consumer reach
– The expansion of the 5G network will help Payless Adidas to increase its market reach. Payless Adidas will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Payless Adidas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Payless Adidas to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Building a culture of innovation
– managers at Payless Adidas can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Payless Adidas can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Payless Adidas to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Payless Adidas to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Payless Adidas can use these opportunities to build new business models that can help the communities that Payless Adidas operates in. Secondly it can use opportunities from government spending in Global Business sector.
Using analytics as competitive advantage
– Payless Adidas has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Payless Adidas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Payless Adidas in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Payless Adidas can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Payless Adidas has opened avenues for new revenue streams for the organization in the industry. This can help Payless Adidas to build a more holistic ecosystem as suggested in the How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict case study. Payless Adidas can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Payless Adidas to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict are -
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Payless Adidas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Payless Adidas.
Stagnating economy with rate increase
– Payless Adidas can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Payless Adidas needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Consumer confidence and its impact on Payless Adidas demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Payless Adidas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Payless Adidas business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Payless Adidas in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Payless Adidas in the Global Business sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Payless Adidas high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Payless Adidas
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Payless Adidas.
Weighted SWOT Analysis of How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Payless Adidas needs to make to build a sustainable competitive advantage.
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