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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
increasing energy prices, supply chains are disrupted by pandemic , 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 -
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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Horst Dassler, Adidas, and the Commercialization of Sport firm has clearly differentiated products in the market place. This has enabled Horst Dassler to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Horst Dassler to invest into research and development (R&D) and innovation.
Organizational Resilience of Horst Dassler
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Horst Dassler does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Analytics focus
– Horst Dassler 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 Geoffrey G. Jones, Michael Norris, Sophi Kim 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.
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.
Innovation driven organization
– Horst Dassler is one of the most innovative firm in sector. Manager in Horst Dassler, Adidas, and the Commercialization of Sport Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Horst Dassler digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Horst Dassler 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 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.
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.
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.
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.
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 -
Low market penetration in new markets
– Outside its home market of Horst Dassler, firm in the HBR case study Horst Dassler, Adidas, and the Commercialization of Sport needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Horst Dassler, Adidas, and the Commercialization of Sport, is just above the industry average. Horst Dassler 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.
Interest costs
– Compare to the competition, Horst Dassler 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.
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.
Lack of clear differentiation of Horst Dassler products
– To increase the profitability and margins on the products, Horst Dassler needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Horst Dassler 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.
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 Horst Dassler supply chain. Even after few cautionary changes mentioned in the HBR case study - Horst Dassler, Adidas, and the Commercialization of Sport, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Horst Dassler vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Horst Dassler, Adidas, and the Commercialization of Sport 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 Horst Dassler, Adidas, and the Commercialization of Sport can leverage the sales team experience to cultivate customer relationships as Horst Dassler is planning to shift buying processes online.
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.
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.
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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Horst Dassler 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, Horst Dassler, Adidas, and the Commercialization of Sport, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Horst Dassler can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
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 Horst Dassler in the consumer business. Now Horst Dassler can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Horst Dassler 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.
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.
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.
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.
Buying journey improvements
– Horst Dassler can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Horst Dassler, Adidas, and the Commercialization of Sport 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.
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 -
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 Horst Dassler business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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 .
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.
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.
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.
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 Horst Dassler.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Horst Dassler in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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
– Horst Dassler has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Horst Dassler needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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.
