Horst Dassler, Adidas, and the Commercialization of Sport SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Horst Dassler, Adidas, and the Commercialization of Sport
The case focuses on the career of Horst Dassler, the son of the founder of the German-based sports shoe manufacturer Adidas. The origins of the firm were in the interwar years, and it rose to public prominence after it provided spikes for the famous African-American sprinter in the 1936 Berlin Olympics. From the 1950s Horst cultivated relationships with athletes and national associations to expand his sports apparel business and develop sports sponsorship, competing fiercely against competitors such as Puma and Nike. During the 1970s he played a key role in commercializing the international soccer federation FIFA, including creating a television market for soccer, and he subsequently became a key force behind arranging sponsorships and broadcasting rights for the Olympics. The case explores the drivers of success of this major consumer brand, and provdes the opportunity to discuss the positives and negatives of the globalization and commercialization of sport.
Authors :: Geoffrey G. Jones, Michael Norris, Sophi Kim
Swot Analysis of "Horst Dassler, Adidas, and the Commercialization of Sport" written by Geoffrey G. Jones, Michael Norris, Sophi Kim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Horst Dassler facing as an external strategic factors. Some of the topics covered in Horst Dassler, Adidas, and the Commercialization of Sport case study are - Strategic Management Strategies, Business law, Entrepreneurship, Ethics, Globalization, Marketing, Strategy and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Horst Dassler, Adidas, and the Commercialization of Sport casestudy better are - – increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs,
increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, etc
Introduction to SWOT Analysis of Horst Dassler, Adidas, and the Commercialization of Sport
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Horst Dassler, Adidas, and the Commercialization of Sport case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Horst Dassler, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Horst Dassler 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 Horst Dassler, Adidas, and the Commercialization of Sport can be done for the following purposes –
1. Strategic planning using facts provided in Horst Dassler, Adidas, and the Commercialization of Sport case study
2. Improving business portfolio management of Horst Dassler
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Horst Dassler
Strengths Horst Dassler, Adidas, and the Commercialization of Sport | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Horst Dassler in Horst Dassler, Adidas, and the Commercialization of Sport Harvard Business Review case study are -
Effective Research and Development (R&D)
– Horst Dassler 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 Horst Dassler, Adidas, and the Commercialization of Sport - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Horst Dassler has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Horst Dassler 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 Horst Dassler in the sector have low bargaining power. Horst Dassler, Adidas, and the Commercialization of Sport has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Horst Dassler to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Innovation & Entrepreneurship field
– Horst Dassler 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 Horst Dassler in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Horst Dassler has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Horst Dassler, Adidas, and the Commercialization of Sport 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.
Operational resilience
– The operational resilience strategy in the Horst Dassler, Adidas, and the Commercialization of Sport 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.
Learning organization
- Horst Dassler 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 Horst Dassler is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Horst Dassler, Adidas, and the Commercialization of Sport Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Horst Dassler 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 Horst Dassler, Adidas, and the Commercialization of Sport HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Horst Dassler in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Horst Dassler is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Horst Dassler 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.
High brand equity
– Horst Dassler has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Horst Dassler to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Horst Dassler, Adidas, and the Commercialization of Sport | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Horst Dassler, Adidas, and the Commercialization of Sport are -
Workers concerns about automation
– As automation is fast increasing in the segment, Horst Dassler 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Geoffrey G. Jones, Michael Norris, Sophi Kim suggests that, Horst Dassler 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.
Slow decision making process
– As mentioned earlier in the report, Horst Dassler 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. Horst Dassler 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 Horst Dassler, Adidas, and the Commercialization of Sport 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 Horst Dassler has relatively successful track record of launching new products.
Products dominated business model
– Even though Horst Dassler 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 - Horst Dassler, Adidas, and the Commercialization of Sport should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Horst Dassler 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Horst Dassler, Adidas, and the Commercialization of Sport, in the dynamic environment Horst Dassler has struggled to respond to the nimble upstart competition. Horst Dassler has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Horst Dassler is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Horst Dassler, Adidas, and the Commercialization of Sport can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Horst Dassler is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Horst Dassler needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Horst Dassler to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Horst Dassler 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Horst Dassler, Adidas, and the Commercialization of Sport has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Horst Dassler 's lucrative customers.
Opportunities Horst Dassler, Adidas, and the Commercialization of Sport | 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 Horst Dassler, Adidas, and the Commercialization of Sport are -
Manufacturing automation
– Horst Dassler can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Creating value in data economy
– The success of analytics program of Horst Dassler has opened avenues for new revenue streams for the organization in the industry. This can help Horst Dassler to build a more holistic ecosystem as suggested in the Horst Dassler, Adidas, and the Commercialization of Sport case study. Horst Dassler can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Horst Dassler 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 Innovation & Entrepreneurship segment.
Loyalty marketing
– Horst Dassler 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.
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 Horst Dassler 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Horst Dassler is facing challenges because of the dominance of functional experts in the organization. Horst Dassler, Adidas, and the Commercialization of Sport 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.
Leveraging digital technologies
– Horst Dassler 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Horst Dassler can use these opportunities to build new business models that can help the communities that Horst Dassler operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Horst Dassler 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 Horst Dassler to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Horst Dassler 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. Horst Dassler 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.
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. Horst Dassler can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Horst Dassler can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Horst Dassler in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Threats Horst Dassler, Adidas, and the Commercialization of Sport External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Horst Dassler, Adidas, and the Commercialization of Sport are -
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. Horst Dassler 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.
Regulatory challenges
– Horst Dassler needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Innovation & Entrepreneurship industry regulations.
High dependence on third party suppliers
– Horst Dassler 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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Horst Dassler can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Horst Dassler
– 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 Horst Dassler.
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.
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.
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 Horst Dassler in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Consumer confidence and its impact on Horst Dassler 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.
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. Horst Dassler needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Environmental challenges
– Horst Dassler 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. Horst Dassler can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Horst Dassler, Adidas, and the Commercialization of Sport, Horst Dassler may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Stagnating economy with rate increase
– Horst Dassler 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.
Weighted SWOT Analysis of Horst Dassler, Adidas, and the Commercialization of Sport 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 Horst Dassler, Adidas, and the Commercialization of Sport 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 Horst Dassler, Adidas, and the Commercialization of Sport 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 Horst Dassler, Adidas, and the Commercialization of Sport 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 Horst Dassler, Adidas, and the Commercialization of Sport 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 Horst Dassler needs to make to build a sustainable competitive advantage.