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A case study on the partnership of Polar Heart Rate Systems and Adidas from 2005 until 2007
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Polar Adidas
Brian Smith · Jo Anne Lotfallah · James McCartneyJosh Dafoe · Nastania Mullin · Jason TaylorTrevor Dufresne
http://www.youtube.com/watch?v=196Y90fl1uA
Agenda
• Introduction• Problem Identification• Situational Analysis• Organizational Objectives• Alternatives• Recommendations• Implementation Plan• Q&A Period
Introduction
• Established in 1977, Polar is a tech driven leader in sports medical science
• Employs over 1 200 people worldwide, has 26 subsidiaries globally, and manages a distribution
network supplying over 35 000 retail outlets.
• First heart rate monitor developed in 1982
Problem Identification
• Contradicting sizes of both companies result in a strain on the relationship
• Lack of adequate resources on Polar’s end
• Very tight schedule and deadlines for releasing the finished product
Problem Identification
• Engineering is shared between the two
• Asks the question: Who owns what?
• The rights for Project Fusion in the air as a result
Situation Analysis - Strengths
• Influx of R&D capital for product diversification
• Access to market data once unobtainable
• Exposure to new markets
Situation Analysis - Strengths
• Increased cash balance of foreign currency
• Ease of movement within Europe
Situation Analysis – Weaknesses
• Size differences of companies could create difficulties and strains
• Production capabilities to match the demand
Situation Analysis - Weaknesses
• Risk of downgrading quality of current product
• Lack of resources to deal with set-backs and failures
Situation Analysis - Opportunities
• Influx of R&D capital for product diversification
• Access to a market once beyond Polar’s reach
• Exposure to new markets that will only benefit Polar
Situation Analysis - Opportunities
• Entry point into Europe
• Backdoor into foreign markets through German trade agreements
• “Top-Grade Seal of Approval”
Situation Analysis - Opportunities
• High brand equity of adidas can increase Polar’s brand equity
• Increase in exposure
• “Big Brother Effect”
Situation Analysis - Threats
• Ownership and rights to the product
• “Predators” trying to steal/sabotage Polar’s technology
Situation Analysis - Threats
• The difference in sizes of both companies
• Marketing strategy decisions: Where does Polar fit?
Organizational Objectives
• PE aims to improve the quality of life for its consumers
• Wants to establish itself with the already successful adidas brand with its heart monitors
• Increase brand loyalty and company equity
Organizational Objectives
• A means of gaining brand awareness– The technology can be used for other
applications
• Learn from adidas
• Gain assistance in development
Alternatives
• Do nothing
• Joint Venture Establish a third company
• Acquistion by adidas
Recommendations
• Take a more controlled approach to future textile alliances
• Continue to be a technological trend-setter
Recommendations
• Staff training at the retail level
• Finland expansion on Research and Development– Assembled products
Recommendations
• The Michael Porter Value Chain
Implementation Plan
• Address the issues of exclusivity
• Address the joint marketing efforts– Media, Joint Websites, Etc.
• Areas regarding management must be determined
Question Period
• Do you agree with our assessments?
• What do you think this alliance became?
• What are the market positions of these two companies today? Why?
Thank You