How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
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 - – there is backlash against globalization, increasing government debt because of Covid-19 spendings, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, increasing commodity prices,
talent flight as more people leaving formal jobs, technology disruption, 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 -
Diverse revenue streams
– Payless Adidas is present in almost all the verticals within the industry. This has provided firm in How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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.
Successful track record of launching new products
– Payless Adidas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Payless Adidas has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
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.
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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Payless Adidas digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Payless Adidas has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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 -
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict, is just above the industry average. Payless Adidas needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, 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.
Increasing silos among functional specialists
– The organizational structure of Payless Adidas is dominated by functional specialists. It is not different from other players in the Global Business segment. Payless Adidas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Payless Adidas to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Payless Adidas has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the How Much Are adidas's Three Stripes Worth? adidas v. Payless and Its $300 Million Verdict HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Payless Adidas has relatively successful track record of launching new products.
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 -
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.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Payless Adidas can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Payless Adidas can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
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.
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.
Manufacturing automation
– Payless Adidas can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
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 -
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.
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.
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.
Environmental challenges
– Payless Adidas needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Payless Adidas can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Payless Adidas will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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.
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.
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 .
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.
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.
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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