Adidas Entering Esports@@@

Adidas Entering Esports: Past, Present, Future Unveiling Strategic Moves in the Esports Industry • Name • Date

Vision: Adidas envisions a world where sports transcend boundaries, uniting people in the pursuit of excellence and individuality. Striving for innovation and sustainability, our vision is to inspire and empower athletes globally, fostering a culture that celebrates diversity, creativity, and the transformative power of sport.

Factor Description Political Adidas's strategic partnerships with influencers and esports organizations align with the trend of non-endemic brands entering the esports landscape, indicating a shift in political acceptance and the mainstreaming of esports. Economic Economic stability and favorable exchange rates have enabled Adidas to invest in esports partnerships and products, aligning with the overall industry growth trend and capitalizing on a positive economic environment for such ventures. Sociocultural Adidas's commitment to supporting the global gaming community reflects an understanding of the rising sociocultural trend of esports popularity and the company's proactive approach to cater to the preferences of the 2.3 billion gamers worldwide. Technological Adidas's incorporation of AEROREADY technology in esports apparel aligns with the technological trend of advancing features in esports products. This underscores the company's readiness to adapt to evolving technological trends within the esports industry. PEST Analysis

Forces Threat Level Factors New Entrants Moderate - High • Adidas faces a moderate to high threat from new entrants. While the existing brand recognition provides an advantage, the Esports industry may witness emerging brands. Additionally, entering Esports demands significant technological investments, posing a potential challenge. Buyers High • The threat from buyers is high, influenced by the extensive array of Esports options available. Consumer power is substantial, and the low switching costs allow users to easily shift between different Esports brands. Existing Firms Moderate • Competitive rivalry within the Esports industry is moderate, with both established and emerging brands vying for market share. The industry's high growth rate continues to attract more firms, contributing to the moderate threat from existing players. Substitute Industries Moderate • Adidas faces a moderate threat from substitute industries, particularly traditional sports. The competition arises not only from Esports brands but also from the enduring popularity of traditional sports. Suppliers Low - Moderate • The threat from suppliers is relatively low to moderate. Adidas can negotiate with various technology providers, but there is a potential dependence on specialized Esports technology, which may impact the bargaining power of suppliers. Porter's 5 Forces Analysis Navigating Competitive Dynamics in the Esports Arena

VRIO Analysis for the Esports Resources and Capabilities Valuable Rare Inimitable Organized Competitive Advantage (Strength/Weakness) • Globally Recognized Brand Yes No Yes No • Strength: Unmatched brand recognition worldwide, instilling trust and loyalty within the Esports community. • Cutting-edge Esports Technology Yes No Yes No • Strength: Pioneering Esports-specific technology, setting Adidas apart with unique and innovative solutions. • Global Distribution Network Yes No No Yes • Strength: Streamlined distribution for Esports merchandise, maximizing market reach and ensuring product availability. • Exclusive Esports Technology Yes Yes Yes No • Strength: Proprietary technology tailored for Esports, providing Adidas with a distinct competitive edge. • Brand Prestige Yes Yes Yes No • Strength: Unrivaled brand strength, creating a formidable position in the competitive Esports landscape. • Efficient Supply Chain No No No Yes • Strength: Organized supply chain ensuring timely delivery, bolstering logistical efficiency for Esports products. • Experienced Design and Innovation Teams No No No Yes • Strength: Skilled teams driving creative and strategic product development, offering a competitive advantage in Esports. • Strategic Partnerships No No No Yes • Strength: Collaborative advantage through key industry partnerships, fortifying Adidas's position in the Esports ecosystem. • Limited Esports Expertise No No No No • Weakness: Limited expertise in Esports may hinder strategic decision-making and understanding of market dynamics. • Dependency on Proprietary Technology No No No No • Weakness: Overreliance on exclusive technology poses a risk; diversification is needed to minimize potential vulnerabilities. • Potential Overreliance on Brand Image No No No No • Weakness: Overreliance on existing brand perception may limit adaptability; diversifying brand image is essential for sustained growth.

SUPPORT ACTIVITIES PRIMARY ACTIVITIES Margin Marketing & Sales Service Inbound Logistics: Streamlining the procurement process for Esports-related materials is vital to ensure the efficient and timely production of merchandise. Operations: Adidas focuses on employing cutting-edge technology and skilled teams in manufacturing Esports-specific products, placing a strong emphasis on quality and innovation. Outbound Logistics: The company leverages a global distribution network to guarantee prompt delivery and maintain the availability of Esports merchandise in key markets. Marketing and Sales: Adidas utilizes its globally recognized brand and Esports-specific technology to create targeted marketing campaigns, ultimately driving sales in strategic markets. Service: Post-purchase support and active engagement with Esports communities are integral aspects of Adidas's strategy, aiming to enhance brand loyalty and customer satisfaction. Firm Infrastructure: Establishing a robust organizational structure is crucial, with dedicated teams focused on design, innovation, and forming strategic partnerships to support the Esports venture effectively. Human Resource Management: Adidas actively develops expertise in Esports, fosters innovation, and ensures a skilled workforce, aligning with the company's commitment to driving Esports initiatives forward. Technology Development: Continuous investment in Esports technology and staying at the forefront of innovation are key priorities, providing Adidas with a competitive edge in the dynamic Esports landscape. Porter’s Value Chain

Industry Matrix - KPI Ratings PIs Weighting (%) Esports Technology Innovation Rating (1-5) Brand Recognition in Esports Rating (1-5) Distribution Network Efficiency Rating (1-5) Strategic Partnerships in Esports Rating (1-5) KPI Esports Technology: 25 4 3 4 3 KPI Brand Recognition 30 3 4 3 2 KPI Distribution Network 20 4 2 4 3 KPI Strategic Partnerships 25 5 3 4 2

Industry Strategic Group Map:Esports Industry Strategic Landscape Streaming Platform Owner Small range Large moderate Electronic Arts Google Activision Blizzard Amazon Tencent Adidas Innovation Leaders Content Giants Global Conglomerate

Marketing Decision Strategic Decision Product Positioning • Broad Differentiation strategy is adopted by Adidas, positioning its Esports products as cutting-edge, innovative, and distinctly unique within the gaming market. Pricing Strategy • Implementing a Premium Pricing strategy, Adidas strategically prices its Esports product range between $50 and $300, reflecting the premium quality and advanced technology embedded in the offerings. Promotional Activities • Focused on Esports-specific Marketing Campaigns, Adidas engages with the gaming community through tailored promotions, creating a strong brand presence in the dynamic Esports landscape. Distribution Channels • Leveraging a Global Distribution Network Efficiency strategy, Adidas ensures widespread availability and timely delivery of its Esports merchandise, providing a competitive advantage. Sponsorship and Partnerships • Engaging in Strategic Collaborations within the Esports Ecosystem, Adidas strategically forms partnerships and sponsorships, enhancing its influence and positioning in the evolving Esports industry.

Corporate Strategy and Conclusion - Esports Industry Corporate Strategy: • Broad Differentiation: Positioning products as cutting-edge and uniquely innovative. • Premium Pricing: Reflecting quality and advanced features. • Esports-specific Marketing Campaigns: Deep engagement with the gaming community. • Global Distribution Network Efficiency: Ensuring widespread product availability. • Strategic Collaborations: Reinforcing influence in the Esports Ecosystem. Conclusion: • Adidas as an Esports Leader: Offering premium, innovative products. • Catering to Diverse Needs: Meeting the preferences of Esports enthusiasts. • Strategic Positioning: A leader in the dynamic and evolving Esports landscape.