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 - – cloud computing is disrupting traditional business models, increasing energy prices, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, increasing commodity prices, central banks are concerned over increasing inflation,
challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
Diverse revenue streams
– Horst Dassler is present in almost all the verticals within the industry. This has provided firm in Horst Dassler, Adidas, and the Commercialization of Sport 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.
High switching costs
– The high switching costs that Horst Dassler 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Ability to recruit top talent
– Horst Dassler is one of the leading recruiters in the industry. Managers in the Horst Dassler, Adidas, and the Commercialization of Sport 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 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 -
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.
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 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.
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.
Need for greater diversity
– Horst Dassler has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Horst Dassler, Adidas, and the Commercialization of Sport, it seems that the employees of Horst Dassler don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
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.
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 -
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.
Better consumer reach
– The expansion of the 5G network will help Horst Dassler to increase its market reach. Horst Dassler will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Horst Dassler 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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Horst Dassler 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 Horst Dassler, Adidas, and the Commercialization of Sport .
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.
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.
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.
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.
