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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Strategy / MBA Resources
Case Study SWOT Analysis Solution
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 - – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, technology disruption, increasing government debt because of Covid-19 spendings, there is backlash against globalization,
digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
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.
Training and development
– Payless Adidas has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
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.
Analytics focus
– Payless Adidas is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Michel Tuan Pham can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management
– Payless Adidas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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 brand equity
– Payless Adidas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Payless Adidas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Payless Adidas has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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 -
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Michel Tuan Pham suggests that, Payless Adidas is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
Slow decision making process
– As mentioned earlier in the report, Payless Adidas has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Payless Adidas even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
Skills based hiring
– The stress on hiring functional specialists at Payless Adidas has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
Slow to strategic competitive environment developments
– As How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict HBR case study mentions - Payless Adidas takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
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 -
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Payless Adidas in the consumer business. Now Payless Adidas can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Buying journey improvements
– Payless Adidas can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Payless Adidas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Leveraging digital technologies
– Payless Adidas can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Payless Adidas can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Payless Adidas is facing challenges because of the dominance of functional experts in the organization. How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 -
Shortening product life cycle
– it is one of the major threat that Payless Adidas is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Payless Adidas has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Payless Adidas needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict, Payless Adidas may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Payless Adidas can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict .
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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