With the increase of technology and advancement in the broadcast industry, government funding channels such as Doordarshan need to be more outspoken. The Indian TV industry has grown massively, as of today, there are around 890 channels.
Like every other household has a television in their houses, the demand for more variety in channels increased which resulted in India being the third-largest market across the world, right after China and the US. However, Doordarshan was not inclined toward this race. The channel lost a large proportion of viewers, mainly because of satellite TV.
There was a time when Doordarshan reached over 90 percent of households in the country, but with such huge channel options, it is not preferred by most households.
The triggering fact is, that this isn’t limited to Doordarshan only, almost every government-based organization such as BSNL and AIR, lost audiences and customers in a very large number.
As private organizations are facing extreme difficulty in surviving in the market, competition has risen massively. Because of this, the government established a committee under Sam Pitroda to improve the marketing strategies and revenue styles in Prasar Bharati, under which Doordarshan is controlled. However, there is still a long run for Doordarshan to boost up its revenue source and face the growing competition in the market.
Since private television channels were allowed in 1991, Doordarshan has seen a sharp drop in viewership. Despite generating substantial advertising revenue from mandatory broadcasts of major national events, such as cricket matches, there has been a proposal to introduce a television ownership license fee in India to support its funding.
Now, this brings us to the main content of this article, that is, how Doordarshan was the biggest marketing channel, what went wrong, and why it failed.So, letâs get started!
History of Doordarshan
Doordarshan started as an experimental broadcaster in the year 1959, with a small transmitter along with a makeshift studio. It is the first-ever TV channel in India, also called the Free Dish as being a free entertainment platform.
Within a few years, Doordarshan became a huge success in the broadcast industry and reached over 25 million households. It covered all fields such as information & news, education, entertainment, and others.
The reason why Doordarshan was praised so much by the Indian audience was that it carried the interests of all the geographical, linguistic, and cultural groups. With time, Doordarshan grew into a large network of 36 satellite channels, which provided a free DTH service of 110 in its Bouquet.
Leading Television Channels Across India in Week 14 of 2024, by Weekly Viewership
What Led to the Downfall of Doordarshan
The Massive Decline in Doordarshanâs Ratings
With the growing demand for commercialization, Doordarshan began auctioning slots to private broadcasters. This resulted in 80 channels, 24 DD, and around 25 private with auctioning every month. However, this didn’t turn out as expected as a large portion of Doordarshan’s audience base shifted massively towards the private broadcasters. This led to a massive decline in the ratings and revenue of DD.
Disastrous Advertising Model
The advertising model of Doordarshan was a bit of a disaster for it as it stipulated that the private channels would not share their revenue with the DD platform. So, earlier, the private channels paid INR 8 crore per annum to DD Free Dish for transmission, annually which generated INR 2,500 crore in its total revenue, and became zero after its new advertising model.
This resulted in the fall of Doordarshan’s advertising revenue from INR 1,301 crore to INR 475.7 crore. And among this, around INR 318.06 crore entirely came from government ads so the final revenue that DD generated was INR 157.59 crores.
Absence of Proper Marketing Division
Another big flaw in the marketing strategy of Doordarshan is the lack of a proper and independent marketing division. And because of this, when the private channel charged INR 90,000 to INR 1.2 lakh for a 10-second slot, Doordarshan charged merely INR 65,000 for the same slot.
They didn’t have any team for strategic planning, research, advertising, internet handling, product management, branding, or any other. This played a major role in the downfall of Doordarshan and gave major advantages to private channels.
Conclusion
In conclusion, we can say that there was a time when Doordarshan used to rule the broadcast industry in India. But to stand still in the market, one needs to adapt to the advancement in technology and marketing. And Doordarshan failed in both of these. Plus, as being funded by the Government it did not make enough profit and in fact, runs in a loss.
The former Prasar Bharti chief Jawhar Sircar blamed the incompetence, poorly backed policies, and lack of ambition, for the failure of Doordarshan rather than the competition. The irony here is, that most of the famous shows preset on Doordarshan were created by private producers.
When they found better opportunities, they grasped onto them. For now, the best strategic planning of Doordarshan is to take the BBC model to enhance its marketing planings and strategies. Stay tuned for more such content!
India’s mega unicorn, Bengaluru-based Flipkart, is about to list in the US market. Sachin Bansal and Binny Bansal, the founders of Flipkart, are former IIT Delhi graduates. They quit their lucrative positions at Amazon to pursue their startup dreams. As a result, in October 2007, Flipkart started its journey to sell books online. Essentially, their concept was simple: clients placed book orders on Flipkart, and the company delivermarled them to their doorsteps.
The founders of Flipkart began their journey in a 2 BHK apartment and only shipped 20 packages in their first year. In the initial days, the two former Amazon employees often had to go deliver the packages by themselves to maintain a ‘just in time’ chain. However, soon, their efforts and ideas picked up the pace, and they were able to make their startup one of the best in India today. A more drastic change in fortune came with one of the world’s largest internet deals when the US-based Walmart acquired a 77% stake in Flipkart with $16 billion.
Once rejected by Google, co-founder Binny Bansal’s dream is to challenge Google India in a revenue war. The Walmart-backed Flipkart hit a new revenue milestone of $5.83+ billion amid the pandemic odds in FY2021. Flipkart’s Marketing has always been its strength, and its ability to come up with fresh and exciting campaigns helps it attract customers. Here, we will check how the bookselling website of the Bansals has transformed its strategy to set itself up as the big-billion behemoth that changes India’s shopping culture.
Flipkart’s Unique Marketing Strategies to Ramp-up the Domestic Sales
Risk management or loss management is the key component of every new business at the budding stage. Flipkart, the most popular Indian eCommerce platform now, began with books, a product row with high margins, minimal maintenance, and easily transportable commodities. Books are likewise non-perishable objects with no diminishing worth over time. In the early days, when shipments were low, the company didn’t have to keep inventory because books could be ordered straight from wholesalers based on customers’ number of orders.
As we know, early birds always have a survival advantage. So, it started with a need-gap analysis of the Indian market. Let’s see Flipkart’s marketing strategy from every aspect that contributed to its success:
Flipkart is one of India’s major eCommerce companies. Flipkart recorded revenue of over INR 560 billion in fiscal year 2023, reflecting a 9% rise over the previous year. This expansion is being driven by a variety of factors, including increased eCommerce usage in India, the expansion of Flipkart’s product selection, and the company’s emphasis on personalization and customer service.
Promotional Channels
Flipkart Promotional Channels
The following are the promotional channels that Flipkart uses as a part of its marketing strategy:
Social Media Marketing – Flipkart can’t ignore powerful tools like social media. Apart from sponsored pages, Flipkart has a large following and heavily emphasizes social media. Flipkart has about 10 million Facebook fans, 4.2 million Instagram followers, 2.9 million Twitter followers, and so on as of October 2023. Flipkart offers several different handles for different products or categories, such as fashion, tech, books, furniture, and now groceries. It uses social media, feedback, queries, and reviews as a valued customer system. Problem-solving skills with immediate response through social media enjoys trust. It uses emotional stories in social media. Creating engaging content on its social media handles is one of the major marketing strategies of Flipkart.
Affiliate Marketing Tactics – Affiliate marketing is a type of performance-based advertising in which a person receives a share of profit for promoting a product or service or for recommending Flipkart’s items. Flipkart’s strategy is to delegate the task of advertising its items to associates, who were paid a portion of the profit for selling the items. Affiliate program members market the products directly or indirectly through their blogs, videos, or other means. Flipkart offers 5% to 12% commission as per their cash cow products.
Innovative Marketing Campaign – Marketing campaigns with various taglines also beefed up sales. Flipkart uses campaigns like “Itne May Itnaaaa Milegaa,” “Budget Se Mukt,” “Gen E, Let’s Raise a Generation of Equals,” “India ka Fashion Capital,” and “Munna Bhai and Circuit.” It has always involved emotional, joyful, or vivid messages to cover all the sections of society.
Flipkart Marketing Campaigns
Productive and Eye-Catching Advertisements – Advertisement is a psychological game. But here also, the billion-dollar Flipkart made a balance between celebrity endorsement and using a new face to build up a down-to-earth image. So that the average person or non-user can become used to their system; apart from this, it modifies advertisements according to the culture, festivals, and flavors of diversified India. It also observed special days like Independence Day, Women’s Day, or Children’s Day, with lucrative prices cut off for that segment of customers. Creating innovative advertisements is an important element of Flipkart’s promotion strategy.
Search Engine Optimization Strategy – Flipkart, India’s largest online retailer, has invested much in optimizing its platform for search engine rankings. Every time someone searches for a product, Flipkart shows among the top two results, and this is all because Flipkart has invested much in SEO. Flipkart examines people’s top searches, then selects the top keywords and generates web page URLs for them. Flipkart’s marketing strategy to ensure its website ranks is excellent. They also receive backlinks from over 66 million distinct domains, which is simply astounding. All of these backlinks serve as a foundation for Flipkart to rank first on search engines.
Personal Touch and Commoner’s Brand Image – Since its inception, Flipkart has ensured surprise delivery by founders, making gift packs for particular customers on special days. Indians are insane about the personal touch, gifts, wishes, etc. So, the company focuses on personal approaches. India is obsessed with Bollywood, and Flipkart is taking advantage of this to raise awareness about its image and promote its platform and products. But now the company wants to get into a ‘commoner’ image to lure the OTT-addicted, ‘Game of Thrones’ lovers, the rational next-gen. Bollywood hardly makes sense to them. So, strategists uniquely use unknown faces.
Search Engine Marketing (SEM) – Customers nowadays search for things on Google, and if you’re not among the top results, you’re missing out on a huge opportunity. As a result, Google Ads are beyond question. Flipkart advertises mostly on search and shop promotions, carefully considering and focusing on the proper keyword combination. Google Ads is a way for eCommerce platforms to draw consideration towards their foundation by appearing on a list of products at various phases. SEO copyright strategy helps get top search engine rank.
Content Marketing – Flipkart creates content like buying guides, product reviews, and trend analyses on its blog and other platforms. This helps build trust with customers by offering useful information. The blog also highlights Flipkartâs reliable service, even in tough situations, and promotes popular products. Overall, this strategy improves the customer experience and strengthens Flipkart’s reputation as a dependable, customer-focused online store.
Storytelling Strategy Flipkart uses storytelling in its social media campaigns to create emotionally engaging content that connects with its audience. This approach is a key part of its overall marketing strategy.
The following are some of the customer-friendly initiatives that Flipkart uses as a part of its marketing strategy:
Customer Relationship Management –CRM is one of the major components of marketing strategy. Flipkart’s strategy of applied sales forces automation to help customers guide and decide, cloud software solutions, demographic analysis, purchasing behavior, browsing history monitoring, tracking sales leads, and converting confused customers into loyal ones. It is a 360° effort around the customers to create awareness to end up with sales goals.
COD and EMI facility – Their groundbreaking cash-on-delivery offering helped them gain trust among skeptical Indian clients who had only just discovered the benefits of online shopping. Moreover, Flipkart was among the few eCommerce companies that took COD risk on an experimental basis. As a form of protection against India’s numerous logistical challenges, this allowed customers to obtain their things before paying for them. Easy EMI options push the confused customer to a potential buyer. Flipkart convinces the customer that EMI is to increase affordability without hampering their monthly budget or putting any major cost burden on them.
Out of Cash Options (Buy Today, Pay Later) – In this world, when your best friend can deny credit during an emergency, but not the dear friend Flipkart. After the COD movement, the Flipkart builders decided to allow the ‘Pay Later’ option for more people to shop on the site. It is one of the most effective marketing tactics for attracting new customers. Pay Later allows you to make online purchases quickly and easily. Customers who have been committed or appeared loyal to Flipkart for a long time have been selected to benefit from this opportunity.
Exchange Offer or Bonus Redeem- One of the most effective marketing tactics for expanding the customer base is to offer discounts. Customers who receive a discount are more likely to become long-term customers, as everyone, rich or poor, enjoys receiving discounts. Suppose a company offers a discount in the early years; in that case, it will undoubtedly be the market leader in the future. Flipkart has followed this marketing plan to become the market leader in today’s online industry. It also offers easy exchange options in various segments, making the platform a trusted one by Indian customers.
Easy Refund and Replacement Policy – Flipkart also offers a product replacement service if a consumer receives damaged or incorrect goods, and in case of a refund, it credits the entire amount to the customer’s bank account within 2 to 3 days. This method is particularly vital if an eCommerce platform wants to sustain itself in the market for a long time and create customer confidence. The company also offers very robust customer care support to cater to the grievances of their customers.
Flipkart Assured and Quality Checked Products – In the initial period, it struggled with fake sellers, poor quality products, wrong products, and broken delivery issues. Their strategist came out with powerful initiatives like ‘Flipkart assured.’ Flipkart Assured, India’s first speed and quality assurance program, ensures that customers receive high-quality products in the shortest time possible. Their grocery part ensured 7-step quality check products. The logistics staff have worked hard and focused on minimizing product damage across the supply chain.
Work Culture and Seller Satisfaction Strategy
Flipkart Seller Satisfaction Strategy
The marketing strategy of Flipkart is driven by employees, the prime assets of organizations. A good work culture with healthy competition and less corporate politics is what ensures productivity. Professional social media giant Linkedin hailed Flipkart’s work culture and flagged it as the most preferred place of work in India. Many Flipsters and ex-employees also expressed admiration for their work culture on Quora. The company is also super popular for its employee-friendly paternity policy.
The seller or supplier is the key component of the entire logistic chain as the eCommerce giant is not the producer but creates a marketplace where buyers and sellers can meet. So, it is important to have satisfied sellers to minimize product quality issues. A good seller will guarantee good quality that makes the customers happy, and this is what the main purpose of a great marketing strategy is. Thus, Walmart’s Flipkart gives equal importance to its customers and sellers, which makes it a successful and popular platform.
Flipkart has over 80 warehouses in India where it may hold products after receiving them from retailers and quickly transfer them to customers. Flipkart also has other hubs for packing, branding, sorting, and more. The most important aim of Flipkart’s marketing is to ensure fast delivery to win the trust of customers, and this can be done by selecting a good and efficient distribution system and chain.
Flipkart’s Expansion Strategy
Merger acquisition or business buyout is not only a policy to reduce competition but also a great marketing strategy. Flipkart’s strategy has been to acquire many of its small competitors to kill competition, and sometimes, its acquisition is to boost logistics tech advantages or make a new entry. For example, it acquired ANS Commerce, eBay India, and Myntra (the king of the online fashion industry) to fight with rivals. To diversify itself, Flipkart has also made deals with the med platform SastaSundar and the ticket booking application Cleartrip. All this brings up the platform in the eyes of people and, hence, a great marketing strategy.
So, Flipkart is the big fish that eats little fish for its diversified expansion.
A balanced strategy is chosen for STP (Segmentation, Targeting, and Positioning) analysis of Flipkart segmentation, pricing, and targeting analysis. Flipkart works as a middleman and sells from books to bikinis, so their targeting is not fixed. Similarly, the pricing also rotates as per product quality brand. However, it claims many products under MRP and discount rates.
Flipkart targets anyone who uses the internet but does not have time to shop. Though its target audience is spread across numerous market sectors since consumers of all demographic backgrounds can find products that appeal to their interests, 75% of its audience falls between the ages of 16 and 55.
Flipkart uses behavioral and psychographic segmentation tactics to segment the market and adapt to customers’ shifting requirements and wants. Flipkart’s positioning has helped it to become one of the most successful eCommerce companies in India. It is a popular choice for shoppers of all ages and income groups, and it is known for its wide range of products, affordable prices, and convenient shopping experience.
Flipkart and the Covid-19 Battle
Unprecedented adversity turned into a lucrative opportunity for Flipkart. At first, the company faced problems during work-from-home culture due to the systematic shift of human and tech resources and a struggling delivery system due to the lockdown.
But every dark cloud has a silver lining. It created the Programme management team and ensured cashless delivery without any touch. The Flipkart family took care of employees, vendors, frontline workers, and consumers during the tough time of the pandemic. The company tied up with the Uber drivers for smooth delivery. The Walmart-owned company announced a 46 crore medical supply donation for India to help common people out of the internal ecosystem. Internal vaccination drive, strict COVID norms, or strong insurance for employees bring out their safety concerns.
Flipkart Big Billion Day – Flipkart Marketing Campaigns
Flipkart Big Billion Day is an annual sale event sponsored by Flipkart. It is one of India’s largest shopping festivals, with enormous discounts on a wide range of merchandise. Flipkart Big Billion Day is usually held in October and lasts several days. Flipkart offers discounts on a wide range of products during the sale, including smartphones, laptops, electronics, clothes, and home appliances. During the sale, the company also offers a variety of additional deals and promotions, such as flash sales, coupons, and cashback offers. This is the biggest promotional strategy of Flipkart.
India ka Fashion Capital – Flipkart Marketing Campaigns
India ka Fashion Capital is a prominent marketing campaign that highlights the company’s extensive fashion goods offering. The campaign, which features celebrities such as Ranbir Kapoor and Alia Bhatt, emphasizes Flipkart’s position as a one-stop shop for all the newest fashion trends.
Flipkart’s “Kidults” marketing strategy focuses on the distinct demands and desires of young adults in India. The campaign includes a series of advertisements depicting young adults conducting ordinary activities in a humorous and lively manner. The advertisements frequently use humor and exaggeration to emphasize that, despite their age, young adults are still young at heart.
The “Kidults” campaign has had great success in reaching out to young adults in India. The advertisements are accessible and humorous and speak to the unique issues and opportunities that young adults in India confront. The campaign also helped Flipkart establish itself as a brand that understands and responds to the demands of young adults.
FlipGirl Campaign
FlipGirl Campaign – Flipkart Marketing Campaigns
Flipkart’s FlipGirl campaign is a marketing effort that stars Bollywood actress Alia Bhatt as FlipGirl, a superhero. The ad attempts to promote Flipkart’s diverse product offering, quick delivery, and commitment to making buying accessible to all Indians.
The FlipGirl campaign is a series of advertisements in which FlipGirl comes to the aid of individuals in distress. FlipGirl saves a man from being hit by a car in one commercial by handing him a replacement phone just in time. In another commercial, FlipGirl saves a woman from being late for work by delivering a new pair of shoes just as she is about to leave the house.
Frequently Bought Together Campaign
Frequently Bought Together Campaign – Flipkart Marketing Campaigns
It’s a marketing strategy that recommends products that are frequently purchased together. The promotion is founded on the observation that customers are more willing to buy things that they know go well together.
The campaign includes a series of recommendations that appear on product pages and during the checkout process. For example, if a consumer is looking at a smartphone product page, Flipkart may recommend a case, headphones, or a charger. Alternatively, if a consumer is checking out with a grocery order, Flipkart may propose a dessert or snack to complement the products they have previously chosen.
The #MultiPurposePurchase campaign from Flipkart is a multi-category promotion that encourages people to buy products from multiple categories in a single order. Customers can take advantage of the campaign by receiving discounts and other advantages on their purchases.
The promotion aims to boost Flipkart’s average order value and encourage customers to buy more products from the company. Flipkart can also use the campaign to cross-sell and upsell products to its customers.
Har Need Ke Liye Best Deals
Har Need Ke Liye Best Deals – Flipkart Marketing Campaigns
The campaign includes a series of advertisements depicting people from various walks of life locating the best prices on Flipkart. In one advertisement, a young woman is depicted purchasing a new smartphone at a reduced price. In another commercial, a family is shown saving money by purchasing all of their groceries on Flipkart.
The commercial also promotes Flipkart’s diverse product offering and its dedication to making buying accessible to all Indians. The advertisements depict people of diverse income levels and backgrounds searching for the greatest discounts on Flipkart.
Flipkart’s Special Occasion Campaign
Flipkart’s Special Occasion Campaign is a year-round series of sales and promotions commemorating major holidays and festivals. Discounts on a wide range of products, including cellphones, electronics, clothes, and home appliances, are often included in the promotion. Flipkart’s Special Occasion Campaign is one of India’s most popular shopping events. It is a fantastic opportunity for customers to receive fantastic prices on what they require and desire.
Conclusion
The above-mentioned Flipkart marketing strategies, like social media marketing, catchy campaigns, advertisements, bonus redemption, out-of-cash options, etc., are responsible for making the company what it is today. It is not only proper planning but great execution that matters, too. This startup, which merely started as a bookselling platform, is now ruling the Indian eCommerce market with its effective marketing strategies. Thus, the platform has come a long way since its inception, and it also makes continuous efforts to stay in the market in its full prime.
FAQs
When was Flipkart founded?
Flipkart was founded in the year 2007 by Binny Bansal and Sachin Bansal.
What are some prominent acquisitions of Flipkart?
Some prominent acquisitions of Flipkart are:
Myntra
eBay
Letsbuy
SastaSundar
ANS Commerce
Yaantra
What is Flipkart Assured?
Flipkart Assured is a badge that can be found on certain products present on Flipkart’s platform. This means that the products are of high quality, have passed six precise quality checks, and are from its best sellers.
What is so famous about Flipkart’s marketing?
Flipkart is well-known for its collaborations. It also spends a lot of money on celebrity marketing and star power. Flipkart keeps collaborating with various famous figures from time to time.
What are the marketing strategies of Flipkart?
Flipkart indulges in both paid and organic marketing. Its main focus remains on marketing through digital channels like social media marketing, Google ads, etc.
Despite being a relatively new invention, it is hard to remember what life was like before the advent of mobile phones. These pocket-sized devices have opened up a whole new world of possibilities and revolutionized the way we live our lives today. From gaming and entertainment to socializing and shopping, thereâs now a mobile app for almost anything your heart desires â and exciting new technologies are being developed all the time. So, what are the top-rated mobile applications today? Weâve taken a closer look at some of the leading apps on the market right now!
1. TikTok
If you havenât heard of TikTok, you must have been living under a rock. This enormously successful app skyrocketed in popularity back in 2020 and has continued to dominate the social media landscape ever since. The entertainment platform uses powerful algorithms to provide users with a highly curated and personalized feed, offering an endlessly scrollable supply of content. Thanks to its addictive, enjoyable nature, the app is now one of the most widely used platforms in the world â in 2023, TikTok racked up an astonishing 1.9 billion users worldwide. The app even plays a major role in shaping global trends â whether itâs a dance routine or a hit song, the world is regularly united by the latest TikTok craze.
2. WhatsApp Messenger
For most people, mobile phones are primarily a source of connection and socialization with our loved ones. After all, thatâs what they were invented for in the first place! Whilst the world of digital communication has changed significantly in recent years, good old-fashioned messaging continues to see widespread international use. Ever since it was founded back in 2009, WhatsApp has been an industry-leading messaging app, thanks to its simple interface, seamless connectivity, and secure end-to-end encryption technology. Over 100 billion WhatsApp messages are sent every single day, and the app has been downloaded over 5 billion times, demonstrating its enduring global popularity.
3. Jackpot City Casino
Thanks to their convenient nature, there has been an astronomical rise in the popularity of mobile gaming apps in recent years. Jackpot City Casino is now one of the best casino apps in Canada and has gained a significant user base thanks to its wide selection of casino games including slots, roulette, and blackjack. The app has been praised by iGaming enthusiasts for its user-friendly interface, high-quality graphics, and seamless mobile gameplay, making it a top choice for those who like gaming on the go. The platform has also built a good reputation for enabling secure transactions and providing reliable customer support, making it a top choice for fans of mobile casino gaming.
4. Instagram
The iconic media app known as Instagram, has seen sustained popularity ever since the rise of social media in the 2010s. Those who grew up with a mobile phone are highly likely to have an Instagram profile, allowing them to share moments from their daily life through a curated feed of photos and âstoriesâ. The site has evolved over the years to keep up with trends â many people use its in-built messaging function, as well as the short-form video feature known as Instagram Reels. By adapting to consumer demands, Instagram has managed to stay relevant by offering an endless world of snappy, personalized entertainment.
5. Spotify
The Spotify app continues to dominate the world of mobile music streaming, enabling its users to access an unbelievably varied music library at the touch of a button. In fact, earlier this year, Spotify turned the largest quarterly profit in its 18-year history, showing how this household name has become the worldâs leading provider of awesome tunes, immersive audiobooks, and informative podcasts. The platform now has over 240 million paying subscribers, demonstrating how Spotify has managed to establish itself all around the world as a global leader in the music streaming sphere.
6. PayPal
E-wallets and other streamlined mobile payment platforms have completely changed our relationship with money in the modern world, with many people now mainly using their mobile phones to make purchases instead of a traditional physical wallet. PayPal has been around for decades now and has been a key driver of this trend â as one of the worldâs most widely recognized and trusted digital payment platforms, PayPal has made it incredibly easy for people to send and receive money online. Through creating a user-friendly mobile app, PayPal has become one of the top-rated digital payment platforms of all time.
7. Temu
This online shopping platform launched in Canada in February 2023 and has seen enormous success ever since. Temuâs stratospheric rise to fame can be largely attributed to its vast selection of products and highly competitive prices, meaning that in a short space of time, almost 40% of Canadians who shop online have now bought something from Temu. By offering unbelievably low prices in a turbulent economic landscape, Temu has made itself stand out at a time when finding a bargain has become more important than ever. With its user-friendly interface and eye-catching deals, itâs highly likely that users will keep returning to this shopping app in the future!
Ultimately, itâs clear that the apps with the most longstanding success are those that can adapt and evolve alongside the ever-changing tides of consumer trends. As mobile applications continue to change the way we socialize, share information, and manage our finances, the apps of the future will undoubtedly continue to change the world!
FirstCry’s parent company, BrainBees Solutions Ltd, has announced that its red herring prospectus (RHP) indicates that the IPO would begin on August 6 and conclude on August 8.
FirstCry reportedly plans to ask for a valuation between $2.9 and $3 billion when it goes public. Among the components of FirstCry’s IPO revealed in its revised DRHP was an offer for sale (OFS) of up to 54,391,592 equity shares and a new issue of equity shares totaling up to INR 1,666 crore.
Since FirstCry’s total sales were more than INR 6,500 crore in FY24, the numbers suggest that the company will seek valuation multiples of roughly 3.5x revenue. Although many were disappointed by its value, experts believe that a lower valuation would be a smart move that would appeal to institutional and retail investors alike.
Annual Financial Report (FY24)
From INR 5,633 crore in FY23 to INR 6,481 crore in FY24, FirstCry’s revenue from operations increased by 15%. In the most recent fiscal year, FirstCry mostly generated income from the sale of its items through its online store and brick-and-mortar locations. The company’s wholly-owned subsidiary, GlobalBees, was a major revenue generator, adding INR 1,209 crore.
According to the company’s DRHP, there were 1,018 brick-and-mortar outlets nationwide as of the end of the last calendar year (2023). Of these, 632 were franchise-owned, while the remaining 832 were company-owned.
Thanks to a better EBITDA margin, the Pune-based company was able to cut its losses in FY24 by 34%, to INR 321 crore.
Around the first week of August, FirstCry will join Ola Electric as the second SoftBank-backed business to conduct an initial public offering (IPO). The firm, which is headed by Bhavish Aggarwal, had scheduled the opening of the issue for August 2 and its closing for August 6.
So, Whoâs Selling in the Initial Public Offering?
SoftBank will sell 37.35 percent of the 5,43,91,592 shares that make up FirstCry’s offers for sale (OFS). A number of other investors will also be participating in the OFS, including Mahindra and Mahindra, Premji Invest, TPG Growth, and NewQuest Asia. The firm will probably finalize the price range by today.
Mahindra & Mahindra and Premji Invest are the next two largest shareholders in FirstCry, with 10.97% and 10.36% of the company’s shares, respectively. SoftBank is the largest shareholder in FirstCry, holding 25.53% of ownership. Even though the total ESOP pool accounts for 8.4% of the cap table, the creator of the company, Supam Maheshwari, holds a 6% share.
Nike is one of the most well-known names in athletic footwear, apparel, and accessories. Among the many things that have contributed to Nike’s success, the company’s well-thought-out business model stands out as the main cause for its continued success in the marketplace.
This article will explore the business model and revenue model of Nike in detail, helping readers understand how it has been important in the company’s rapid rise to the top.
About Nike
Founded in 1964 under the name Blue Ribbon Sports, the company was later renamed after the Greek goddess of success. It was founded by former University of Oregon track and field athlete Phil Knight and his coach Bill Bowerman.
Back then, all they did was distribute the shoes of the well-known Japanese company Onitsuka Tiger. Nike made around $8,000 in their first year of operation. With stores in 170 countries, the brand’s net worth is $191.79 billion now. There is little question that the net worth of the corporation will keep increasing in the future, based on trends from the past few years. Currently, the company’s main office is situated in Beaverton, Oregon, USA.
Athletes and customers throughout the world have been attracted by Nike’s innovative products and designs, marketing and branding strategy, and retail and distribution methods. Another essential component of Nike’s business model is the company’s approach to marketing and branding. The corporation has long been an investor in celebrity endorsements, teaming up with A-list athletes and actors.
Nike has a long history of partnering with legendary players, such as Serena Williams of tennis and Michael Jordan of basketball, solidifying its position as a symbol of excellence in sports. The retail and distribution channels are also crucial to Nike’s business model. To meet every requirement of its customers all around the world, the company runs both physical stores and an effective online marketplace.
Nike makes sure its products are available to people all over the globe with its strong retail presence. To further broaden its reach, Nike collaborates with a network of authorized retailers and distributors, in addition to its locations.
By controlling several revenue streams and continuously pushing the limits of innovation and design, the worldwide sportswear giant Nike has become an industry powerhouse. The foundation of Nike’s revenue streams is, without question, footwear sales. Nike has won over millions of customers all over the globe with their extensive assortment of fashionable lifestyle shoes and performance-driven sneakers.
The brand has become a preferred choice for footwear across every group due to its capacity to accommodate the diverse requirements of athletes and trendy individuals. Although shoes are Nike’s main product, the company has also found success in the apparel and equipment markets. Athletic performance and comfort are two primary goals of Nike’s extensive line of athletic apparel, which includes outerwear, accessories, and sportswear.
Additionally, Nike manufactures a wide variety of sports goods, such as soccer balls, basketballs, and training apparel. Nike has strengthened its position in the athletic goods industry and accessed new sources of income by expanding its product range. In addition to selling shoes, clothes, and equipment, Nike also makes money by sponsoring sporting events and teams and entering into licensing deals with other businesses. Through these licensing arrangements, Nike can expand its reach even further by allowing other companies to utilize its distinctive logo and brand image on their products.
Another important revenue generator for Nike has been its relationships with world-class athletes, teams, and leagues. Nike not only increases its visibility but also solidifies its reputation as a symbol of genius and achievement by linking its name with the most renowned athletes in the world. Because of this, customer confidence and loyalty are boosted, leading to more sales.
Nikeâs Revenue Worldwide From the Fiscal Years of 2013 to 2023
USP of Nike
“Just Do It” is Nike’s tagline and also its unique selling proposition. The brand has been using a powerful yet simple slogan, which conveys a message of empowerment, since 1988. Regardless of the obstacles people encounter, this USP encourages them to pursue their dreams and ambitions.
Nike SWOT Analysis
Nike SWOT Analysis
Nike Strengths
With a presence in almost every country on Earth, including the United States, the United Kingdom, Asia, and many more, Nike is unmatched as a global leader in athletic footwear and gear.
Nike has been named one of the world’s 50 most innovative corporations.
One way Nike stands out is through its unique products, which are recognized all over the world.
The firm has built its brand equity through its effective global business relationship-building.
Nike Weaknesses
The expansion of the company’s market share is hampered by the constant risk of competition.
Nike is more known as a sportswear and footwear label than a major player in the fashion industry.
Nike Opportunities
The development of new, highly profitable products, such as a sharper focus on eyewear, athletic apparel, etc.
Even in developing economies, Nike can open stores in tier 2 cities.
Open sports academies all around the globe to encourage talent and raise brand awareness.
Like its sporting division, Nike has room to grow in the fashion industry.
Nike Threats
Many different brands compete for consumers’ attention in the footwear industry.
Since it is an international brand, Nike is impacted by the ups and downs of national currencies.
A company like Nike regularly has to deal with the issue of counterfeit goods.
Other brands incorporate new approaches and innovations to directly compete with Nike.
Conclusion
If you want to see how to maximize money while still providing excellent customer service, look no further than Nike’s business strategy. Nike has been the world’s most popular sportswear brand for a long time because the company’s founders emphasized marketing and innovation from the start.
FAQs
Who are the founders of Nike?
Nike was founded by Phil Knight and Bill Bowerman in the year 1964.
What is the tagline of Nike?
The tagline of Nike is Just Do It which is also its USP.
What are the main components of the Nike Business Model?
Nike’s business model revolves around product innovation, strong brand presence, global supply chain management, direct-to-consumer sales, celebrity endorsements, and strategic marketing partnerships.
German multinational firm Puma SE, better known as Puma, creates and sells casual and sports shoes, clothes, and accessories. To increase its brand’s visibility, Puma’s marketing strategy centers on new ideas, teamwork, and the utilization of digital channels. Thanks to this strategy, Puma has become a world leader in athletic apparel through effective marketing campaigns and strategic alliances. Among the world’s sportswear manufacturers, Puma ranks third. The following article will examine Puma, a leading fashion and sportswear brand, and the business model that has allowed it to become so successful.
About Puma
Rudolf Dassler founded the renowned athletic apparel label Puma in 1948. Puma is committed to improving the sporting experience through innovation and offers products that combine elegance with performance. Puma, a sportswear brand, is known for its groundbreaking collaborations with famous sportsmen and celebrities. Puma is a global athletic apparel and footwear company with headquarters in Herzogenaurach, Germany. The company has a presence in more than 90 countries and employs about 14,000 people. Its global presence and partnership with Modern Trade Retailers help boost brand awareness and revenue.
The sale of Puma items through a global network of retail outlets is critical to the company’s business strategy. The typical profit margin for a retail company is between two and twenty percent, with a more realistic range of two to ten percent. The profit margin is slightly smaller for well-known brands like Puma because of the increased competition and the necessity to maintain competitive prices. Another important aspect of the brand’s business strategy is its powerful franchising model, which allows it to run its stores all over the world. Puma has successfully increased its brand’s exposure and attractiveness by teaming up with prominent personalities and athletes such as Usain Bolt and Rihanna.
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Puma generates revenue through a variety of sources. The main revenue streams of Puma are as below:
Main Product Categories: Sportswear, footwear, and accessories are the main sources of income for the brand.
Brand Licensing and Collaborations: Puma also earns money through brand licensing and cooperation with other companies.
Performance-Oriented Apparel: Selling performance-oriented apparel for sports such as basketball and soccer brings in more money.
Lifestyle Collections: Another aspect that contributes to its revenue is the sale of lifestyle collections aimed at fashion-conscious people.
Retail Operations: To provide customers with a more traditional shopping experience, Puma runs retail stores and outlets all around the world.
Ecommerce Platform: The brand’s eCommerce platform provides an effortless and accessible way for people to shop online.
Endorsements and Sponsorships: The company’s marketing efforts, which include endorsing athletes and sporting events, boost brand awareness.
Community Engagement: Puma uses sponsorships, social media, and in-person events to build community involvement and devotion to the brand.
Global Consolidated Sales of Puma From 2013 to 2023
USP of Puma
In addition to its heritage, innovation, design, sustainability initiatives, and strategic collaborations, Puma’s unique selling propositions (USPs) are all factors that contribute to the company’s powerful brand presence in the international sportswear industry.
Puma SWOT Analysis
SWOT Analysis of PUMA
Puma Strengths
In both Formula One and NASCAR, Puma is the primary manufacturer of racing suits and driving shoes.
It partners with notable brands such as Ferrari and BMW.
The company’s management and marketing are top-notch, and they’ve done an outstanding job of promoting their items all over the globe.
Puma’s association with popular sporting events such as the FIFA World Cup, the Olympics, cricket, motorsports, rugby, and many more helps the company build its reputation around the world.
The brand’s social media and eCommerce accounts are highly engaged, contributing to its strong online presence.
Puma Weaknesses
In comparison to Nike and Adidas, Puma faces stiff competition and has a small portion of the market.
Consumers may exhibit a preference for specific brands. Finding investors is a challenge for Puma, and the company may look to its rivals for financial backing.
There are numerous wage disputes within this organization. This often leads to strikes and production difficulties.
Puma Opportunities
With an increasing number of major international athletic events, the corporation has additional opportunities to secure sponsorship.
To attract new consumers, more branding and promotional activities can be conducted.
There is still room for Puma to grow in the growing market.
Puma Threats
Because of its worldwide recognition, Puma feels the pinch of economic fluctuations and recessions.
Both established businesses and up-and-coming startups are competing for market share.
Particularly in developing and modest markets, the imitation of low-quality and counterfeit items poses a danger to the company.
Company operations may be impacted by rules and regulations imposed by the government.
Thanks to its innovative advertising campaigns, Puma has become a household name. The brand concentrates on particular socioeconomic factors in specific regions. The fact that their resale items, which are used, fetch over three times the original selling price is the most amusing part. “Limited supply, high demand” is the underlying principle that drives everything. From its logo and product designs to its market reach, Puma’s business approach is highly fascinating.
FAQs
When was Puma founded?
Puma was founded in the year 1948 by Rudolf Dassler.
What was the revenue of Puma in 2023?
The revenue of Puma in the year 2023 was 8.6 billion euros.
Who is the brand ambassador of Puma India?
Ibrahim Ali Khan Pataudi is the new brand ambassador of Puma India.
Every person on this planet is fond of online marketplaces these days. Thereâs no one left who has never ordered something online, and there is no address that has not seen a delivery from an eCommerce shop. You might wonder how it all began and which were the initial companies of such a grand market that has conquered every city or town, of a country, and even union territory.
With Boston Computer Exchange formed in 1982, the â90s became an era during which most of the biggest eCommerce websites came into existence. Alibaba is one of them. The Chinese multinational company Alibaba Group specializes in eCommerce, retail, internet, and technology sectors.
With being the biggest venture capital firm, Alibaba has also been recognized as the fifth largest artificial intelligence company in 2020. Speaking of its eCommerce capabilities, the second largest financial service group via its fintech arm called Ant Group hosts a plethora of marketplaces. These marketplaces include Alibaba.com which is a B2B marketplace, then Taobao a C2C platform, and Tmall which is a B2C marketplace.
You might recognize Alibaba entering the media and entertainment industry as well, through which the world’s largest retailer has earned revenues rising triple percentage year after year.
Forbes has even named the Alibaba group as the 31st largest public company in the world in its Forbes Global 2000 list of 2020.
The Chinese B2B marketplace was founded on 28 June 1999. It was founded by Jack Ma and his 17 friends and students in his apartment situated in Hangzhou. The largest B2C company in the world has its headquarters in Yuhang District, Hangzhou, China. The Chinese multinational conglomerate holding company serves its global audience with eCommerce, cloud computing, AI, and other assistance. Alibaba’s target market is the global market of international exporters and importers.
Key Products and Services of Alibaba
With specializing in the business-to-business sector, Alibaba has made its place among the leading brands and companies in cloud computing, artificial intelligence, entertainment, mobile commerce, retail, mobile media, and films as well as in the TV shows sector.
The global eCommerce market chain serves as a middleman between buyers and sellers through its platform. While playing this role, the Chinese company, Alibaba facilitates the sales of goods. The merchants of its platform are usually small merchants.
Targeting customers who want to shop from the comfort of their homes, the online supermarket sells several products such as food, groceries, tools, beverages, and more via its chain Hemma.
In its value proposition, this retail eCommerce middleman gives its merchants a platform to portray their brand on a global scale and capture a huge market. This grabs the attention of its merchant clients as they can increase the demand for their product and also their profit margin.
Whereas its shoppers can order an extensive amount of products from any part of the world. Alibaba provides a range of products from any niche, through its channels.
In the initial days, the Chinese B2B platform was working via its website but with the technological advancements Alibaba is now available on mobile phones as well.
You can enjoy the treasures of products available on Alibabaâs website through its apps for Android and iOS platforms.
The production house that has become a giant in the entertainment industry is a group with a massive holding over its subsidiaries. It has gained profits from multiple sectors and for providing services in the long run.
Its eCommerce arm alone generates 90% of its revenue, while the group has more than enough means to generate money.
When looking at its full-year earnings of 2024, Alibaba is projected to rise by 19% year over year to USD 9.09 per share. Its full-year revenue is expected to rise by 9.5% year over year with USD 133.12 billion.
The aforementioned projected full-year profit growth is the reflection of the optimism that the recovering Chinese economy is portraying.
Speaking more about its earning sources, Alibaba has a commission granted for each of its transactions. This is applied when you make a transaction on its website Alibaba.com. A similar commission transaction is applied on Taobao.com.
Although it might sound just like the commission that eBay charges on its website, Alibaba only charges the merchants for advertising.
Tmall.com on the other hand is known to generate money through the annual subscription fees. This fee is paid by the users and is subject to change which depends on several pre-agreed terms and conditions. These terms are fixed between the user and Alibaba group arm Tmall and focus on the volume of transactions made.
Alibaba Group has other means to earn money as well. Some of these include the advertising sector, membership, delivery services, sales, and more. The company’s income revolves around its marketplace offerings that connect its many users from around the world to enjoy its services and products that vary in many categories.
Revenue Distribution of Alibaba in 1st Quarter of 2024, by Segment
USP of Alibaba
There are several things that Alibaba does that are unique. It is a marketplace for the B2B segment and also the only company that covers the AI and cloud computing sector while also being a leading firm in the entertainment industry. But the Unique Selling Point of Alibaba is its image of being the world’s largest retailer.
Similarly, the firm is also the biggest venture capital firm along with an investment corporation that leads among such organizations in the world.
FAQs
What is Alibaba?
Alibaba is a leading Chinese e-commerce conglomerate connecting small merchants with global customers through platforms like Alibaba.com, Taobao, and Tmall.
When was Alibaba founded?
Alibaba was founded on 28 June 1999. It was founded by Jack Ma and his 17 friends and students in his apartment situated in Hangzhou.
What are the revenue streams through which Alibaba earns money?
Alibaba earns money through transaction fees, commissions, advertising, and subscription services.
Toys R Us created magic for children. In the 80s and 90s, they made children’s wishes come true. It was nothing short of an ultimate childhood dream. Such great memories! But today, the ‘then’ beloved brand is nothing but a faded picture of its prime, glued to the wall. Their glory is long forgotten! The news shared the rise and fall of the retail giant. The industry was a close witness to the struggles of Toys R Us over the industry. After facing quite some trying situations, the store finally decided on global closure in 2021.
No matter how they shaped the childhoods of millions of kids, nostalgia was not enough for its survival. The changing landscape of the industry and customer preference made things difficult for the once-celebrated retailer. Toys R Us had a public downfall from closing stores to operation liquidation.
Not every success story lives forever. Some enjoy the rise, bask in its glory, and hit rock bottom after quite a run. Toys R Us had the same fortune.
Charles Lazarus was an American entrepreneur. In 1948, he established this retail business which became one of the top players in no time. The industry glorified the company and considered it a âcategory killer.â No one else lived up to the standards Toys R Us set for its customers. Children loved the toys that this retailer sold.
However, in 2018, almost seven decades later the company fell prey to a string of unfortunate events. It filed for bankruptcy. And finally, the day came when it had to close business worldwide. But how did a retailer mammoth, a category killer, burn to ashes after such a magnificent run?
The Demise of an International Retailer: When Did Things Take a Turn?
Most bankruptcies are the result of years of debt, fast-slipping sales, and poor management. So what went wrong with Toys R Us? Well, everything. A company that once reigned over the toy industry fell prey to bad sales and mounting debt.
Everything needs to adjust to changing times. However, Toys R Us could not grapple with the changing industry market space. Moreover, there are platforms like Amazon and retailers like Target and However, that added to its suffering. But the companyâs management also needs to shoulder the blame.
They could not read changes in consumer behaviour. Consequently, they failed to adjust their business model and use new technology wisely.
However, a $7.5 billion buyout stalled the inevitable downfall of Toys R Us. In 2005, a few investors delayed the global demise of the retailer. However, the already piled-up debt was too much to handle.
Unfortunately, the retailer had to announce 180 shutdowns out of its 800 US stores. It also closed all its stores in the UK, moments before liquidating its operations.
Three Reasons for the Downfall of Toys R Us
Toys R Us New York Square Flagship Store
1. The Infamous Deal With Amazon
The company entered a decade-long partnership with Amazon in 2000. The deal set Toys R Us as an exclusive Amazon toy seller. The contract promised the company $50 million per annum from Amazon along with a commission from the sales.
Seeing the successful venture, Amazon decided to expand its toy category. They included direct competitors of Toys R Us. This brought trouble for the company. So they sued Amazon, won the lawsuit, and terminated their deal.
However, the loss incurred due to their co-existence with competitors on Amazonâs e-commerce platform was huge. And the amount they won after suing Amazon did not cover their losses.
Even after the setback, they tried to create their online presence independently. But unfortunately, it was too late. The site had technical errors which frustrated the customers.
2. From Being the âCategory Killerâ to âBecoming Cluelessâ
In 2001, Toys R Us had its New York Square flagship store. It was undeniably a great attraction for all children. Kids enjoyed the different theme zones that Toys R Us had. It won hearts with amusement arcades, animatronic T-Rex, other Jurassic Park attractions, Barbie dream houses, Wonka, legos, and so on. Sounds like a total childhood dream palace, right?
However, the store shut down in 2015. They wanted to cut down on expenses. The big mistake? They compromised on management costs. The company cut down on staff. They let experienced employees go. This was a blunder. In no time, they drowned in their surplus inventory.
The company unknowingly chased away potential customers. Retail needs better store management and customer interaction. Without proper management, they failed to deliver the basic service needs.
3. Did Their Business Model Aggravate Their Downfall?
None can escape the wrath of time. Either you give it your all and adapt to the changing times, or you quickly become irrelevant. Whether it be, on an individual level or industrial level, we all need to adjust. Toys R Us failed to do what time demanded of them. They could not innovate and adjust to the changing landscape.
The world is moving online. But so many big companies stayed the same when this change began. Similarly, Toys R Us failed to see what lay ahead, failing to fathom that e-commerce is the future.
They could not use technology to their advantage. And when they finally did, it was already too late. The retailer could not engage with the changing consumer behaviour. The inability to predict customer preferences threw them off the wagon. This slowed down their business which was a great disadvantage.
Businesses always need to stay ahead of time to survive. Only constant innovation can make them sustainable.
Toys R Us Net Sales Revenue in Billion US Dollars from 2012 to 2016
Toys R Us is not just a retail company in the toy industry. For so many people, this is a sweet childhood memory.
Although it did close its stores in 2021 after filing for bankruptcy, the story is not over yet.
It intends to rebrand itself. The retailer announced the development of businesses under a new parent company. Today, Toys R Us is a part of Tru Kids.
It enjoyed successful launches in both the US and UK.
Optimistic about 2024, the company plans on expanding into Australia as well.
In 2019, Tru Kids rebranded Toys R Us and relaunched its previously failed website.
This venture came in partnership with a major competitor, Target. This competitor retailer acted as a fulfilment partner.
However, the deal did not settle well. It ended before any fruitful accomplishment.
Eventually, Tru Kids made a deal with Amazon.
Although Toys R Us saw its fair share of rise and fall, it is trying to emerge from the ashes again. The question, however, remains: Will it be successful with the efforts of a new parent company?
Revival of the Brand by WHP Global
Toys R Us Official Website
Almost three years after filing for bankruptcy, Toys R Us was revived by WHP Global. WHP Global acquired a controlling stake in Tru Kids in 2021 giving it enough power to open stores.
As a plan, WHP Global is working on expanding the reach of Toys R Us across the globe. Currently, the brand has around 1400 stores and an e-commerce site with access to around 31 countries. With all this change, we can assume the brand has revived in 2023 against all the odds.
Conclusion
The last decade was a major turning point for all retailers. People shifted to e-commerce platforms rather than visiting stores. Then why did Toys R Us leadership not see the flaw in their business model? The reason for their demise is not on Amazon or changing consumer attitudes. However, the story is about the companyâs failure to make concrete financial decisions with better foresight.
One can have vision. But the resources to execute the same are important. From debts to poor management decisions, Toys R Us gives all businesses great examples of what not to do. The company flourished, it was a big player until it wasnât. If businesses do not play the way time demands, you know what the consequences will be!
FAQs
Who was Toys R Us’s biggest competitor?
Some of the biggest Toys R Us competitors were Carter, Walmart, Staples, Amazon, etc.
What year did Toys R Us open?
Toys R Us was opened in 1948 by Charles Lazarus.
Is Toys R Us a dead brand?
No, Toys R Us has been revived by WHP Global which made it come back to the market with its e-commerce site and 1400 stores across multiple locations covering 31 countries.
Germans are the best in every sense be it making the cars or be it leading the front of a sports apparel brand. A globally acclaimed company, especially when it comes to football shoes people tend to choose Adidas. The company is the second-largest sportswear brand in the world and the only largest brand in all of Europe.
Known for its eye catchy designs, and the three stripes, this German brand has made its place in the hearts of people all around the world. Not just the ones who belong to the sports industry, but also the ones who want a brand logo on their apparel.
From spiked running shoes, and gym wear to college bags, Adidas has covered a huge market. Over the years, Adidas has maintained its image as amongst the greatest sports brands in history and the impetus behind that success is its business model.
The company is known to evolve production-wise as well as has adopted a great business strategy. Its business model has changed with time, adjusting to the needs of consumers. This effort has helped the sports brand stand strong throughout the ages and gain the trust of more and more customers.
To get a definite idea of how the business model and revenue model of Adidas works, here is a breakdown study of it.
The German brand was originally founded by Adolf “Adi” Dassler, once he returned from his duties in World War I. Dassler began making sports shoes in his mother’s laundry room in Herzogenaurach, Germany. In 1924, he was joined by his older brother Rudolf, after which both of them named their business “Dassler Brothers Shoe Factory.”
But in 1947 the brothers split up due to personal feuds, and Adolf formed his own company. He registered it as Adidas, deriving from his name, Adi Dassler, in 1949. Similarly, his brother, Rudolf registered his own company Ruda, which was later rebranded as Puma.
Headquarters and Area Served
The company is currently headquartered in Herzogenaurach, Germany. Speaking of the areas where it serves, they are although worldwide, yet there are a few nations where the company does not exist. These countries would be North Korea, Russia, Turkmenistan, Afghanistan, South Sudan, Chad and Palestine.
Adidas – Target Audience
As it’s a sports brand, it typically aims at a global market and targets sports enthusiasts, amateur athletes as well as the ones playing any sports professionally, and also fitness fanatics. Its secondary audience would be brand loyalists, teenagers, as well as those who admire fashionable trends.
Adidas – Key Products
Being the sports shoemaker in its initial days, Adidas still promotes itself as one of the leading footwear brands in the world. Similarly, sportswear, swimwear as well as fashion-oriented apparel are some of its products.
The next segment is its sports and gym accessories which are appreciated a lot, and with that, the bags, caps, and other products are also the ones that generate revenue for Adidas.
As of 2023, the German sports apparel company generated 57% of its revenue through footwear. Then 36% of its revenue was generated through sportswear and fashion apparel. The other 7% came from the sale of bags, caps, and similar small accessories.
Net Sales Share of Adidas Worldwide in 2023, by Product Category
Adidas Business Model
Hereâs a breakdown of the business model of Adidas which also are the strategic pillars of the company and have helped it sustain itself throughout the years.
Strategic Pillar
Description
Value Proposition
– Designs high-quality, innovative products – Caters to sports and fashion industry – Focuses on sustainability by using recycled materials in manufacturing
Key Areas Focused by Adidas
– Emphasis on designing and developing new products – Ensures strong and reliable sources of material – Selective in choosing manufacturing and production partners – Aims to build and maintain strong relationships with key partners
Key Resources
– Skilled employees in design, marketing and supply chain management – Robust distribution and logistics network – Financial resources for investment and acquisitions – Strong brand reputaion and customer loyalty
Partners
– Chain of partners for raw materials (leather, cotton, etc) – Manufacturing partners chosen with precision and satisfaction – Retail partners, both physical and online, to promote sales and broaden market reach
Value Proposition
The German sports brand aims to design high-quality products along with a touch of innovation, this has maintained the brand to stand out from its competitors. It caters to the sports and fashion industry and offers a diverse range of products.
Recently the company has also adopted the sustainable aspect through its business model, where it aims to use recycled material in its manufacturing process.
Key Areas Focused by Adidas
Adidas is mainly focused on designing and developing new products, while also aiming for a strong and reliable source of material. It wisely chooses its partners when it comes to manufacturing and production.
Adidas aims to build new relations and maintain those relationships well enough with its key partners.
Key Resources
When it comes to maintaining the departments, such as design, marketing, and supply chain management, Adidas depends solely on its skilled employees. Similarly, its key resources also include its distribution and logistics network and financial resources for investment and acquisitions.
It also aims at maintaining a strong brand reputation and customer loyalty.
Partners
Adidas has maintained a chain of partners to become a rigid body in the sports niche. From the ones supplying the company with raw materials such as leather, cotton, and more to the manufacturing partners, the company has chosen everyone precisely and has kept them satisfied over the years.
The retail partners including both physical and online sports stores are the ones who promote its sales and also help the company broaden its market reach.
Focusing on the trendy culture, Adidas aims at everyone who has a passion for sports and fitness. They promote their clothing and sports accessories worldwide and have always followed their propositions which are innovation, customization, comfort, and brand/status.
How Does Adidas Make Money?
As of 2023, Adidas has reported an increase in its revenue in the third quarter. It was reported that the company has generated USD 23.47 billion in 2023.
The prime source of its revenue is through sales of its products. Adidas also saves a lot in its spending as it outsources its manufacturers for the production of its apparel and sports materials. This approach has helped Adidas maximize its profits in the global market.
Then again, when it comes to branding it has made its status so grand that people want to be seen wearing the products of this German manufacturer, which is making its sales boost even more.
The Adidas Groupâs Net Sales Worldwide From 2013 to 2023
Conclusion
Adidas is not just a brand that produces sportswear and similar accessories, it has become a brand that targets innovation and progress. The latest products try to make playing a sport comfortable for the customer, all thanks to the constant research done by Adidas.
The business model depicts how Adidas has evolved since its inception and at the same time discovered new ways to make money. It seems that Adidas has taken its tagline too strictly: Impossible is Nothing.
FAQs
Who is the founder of Adidas?
Adolf Dassler founded Adidas in1949.
How does Adidas earn money?
The prime source of Adidas’s revenue is through sales of its products. Adidas also saves a lot in its spending as it outsources its manufacturers for the production of its apparel and sports materials. This approach has helped Adidas maximize its profits in the global market.
Today we have so many browsers to navigate the internet. But back in the day, there was one dominating force, America Online (AOL). In 1985, Marc Sheriff with his business associates introduced the first internet giant.
From online chat rooms to email, AOL gave internet connectivity a whole new meaning. The success reached such a milestone that it once collected revenue of more than $200 billion.
However, after reaching a peak, AOL faded into the background. It could not keep up with Google and other contemporaries took the upper hand. How did a success story turn into a disastrous nightmare? Time to find out!
Years ago, before the digital era arrived, America Online was the main character. It was the very first company to offer internet connectivity to the common masses. From an initial dial-up service to a giant media company, AOL evolved like none.
America Online revolutionized everyone’s entertainment and media consumption. The success first gained momentum in the early 1980s. Initially, it operated under the name Control Video Corporation (CVC). However, it failed to get a hold of the market space. Eventually, after a touch of rebranding as AOL, the company finally found its footing.
AOLâs Secret to Success
At first, America Online (AOL) had a few basic functions. It only had features like chat rooms and email. However, it was not long before AOL realized the importance of expansion.
It went on to give services like news, online games, search databases, etc. A decade later, AOL dominated the digital world with a million users like the world had never seen before.
The entire 1990s witnessed the success of America Online. It expanded all of its media properties. And had a good run! What else made AOL a success of its time?
Simple and Easy-to-Use Interface
America Online made it easy for all its users to navigate the online world. Unlike the other services in the 80s and 90s, AOL had a simple interface. Even people with no technical experience could use it easily. Its accessibility was what attracted users in the nascent stages of the internet.
Excellent marketing Strategy
AOL had quite an aggressive advertising style. With effective commercials and slogans, the company knew how to build its brand. Not only did it attract new users but also retained loyal customers.
Focus on Community
Community inclination was another key player in AOL’s success. Their chat rooms were great meeting opportunities. Such gatherings create a sense of community among users. AOL connected people and pushed it to its peak position.
End of an Era: Beginning of AOLâs Downfall
US-Based AOL Subscribers in Millions for Each Fiscal Year (Q1) From 2002 – 2006
AOL gained a revenue of $200 billion at the highest position in the market space. However, then in 200, the company entered a merger with Time Warner. But why did the deal end in a disaster?
In 2000, AOL’s deal with Time Warner was quite historic with a valuation of $160 billion.
The businesses went through the merger. However, the 21st century saw an impending disaster.
From workplace culture shock to failure to anticipate media space and future interest, the company lacked diligence.
The business merger seemed logical since AOL and Time Warner were leading companies. But the execution could have been better. AOL acquired 55% of the shares whereas Time Warner got 45%.
Unfortunately, just a year into the deal, there was a loss of $99 billion. And by December 2002, both companies saw a decrease of 90% in their stock prices.
The merger was supposed to create ripples in the media business. However, the combination of both companies did not go as expected.
The plan was to make the most of AOL’s online expertise and Time Warner’s assets. But there were challenges and unexpected obstacles.
Then there was an unexpected dot com bust soon after the merger.
The merger which was supposed to be the best deal of the century became a disaster. AOL’s share values started sinking and their stock prices took a bad hit.
Beginning of a Digital Era: AOL Could Not Manage Market Trends
Market trends change. The media space is a dynamic setting. If businesses do not grapple with these changing times, they are not sustainable in the long run. With market trends, customer preferences also change.
Failure to evolve was also a primary contributor to AOL’s downfall. The world moved on to broadband, but AOL hung up on dial-up internet.
But it did try to change. However, their attempt was not successful. Their consumers shifted to broadband connections. Users wanted reliable connectivity. Hence, slowly America Online’s subscriber base began declining over the years.
Evolution of New Competitors
Innovation is not enough. You need to be quick to get ahead of your contemporaries. You need to innovate but fast! Today, consumers need high connectivity and internet speed. People rely so heavily on the Internet for education, communication, entertainment, and work.
However, America Online (AOL) did not predict the needs of companies and individuals soon. Their competitors realized that change was necessary. So, in the early 2000s, they shifted to broadband to provide better connectivity.
Users lost interest in their service. AOL could not meet their users’ need for high-speed internet connection. They did not feel satisfied with dial-up internet.
America Online began to lose its relevance in the changing digital landscape. AOL had so many popular services which no longer fit user preferences. From AOL Mail to AOL Instant Messenger, the company could not beat other new players.
The company lost user engagement due to its outdated services and business model. When the company saw that it started losing its relevance, it acted by amending its strategies. AOL made a change in December 1996. It made a shift from hourly fee to monthly recharge. The company made a turn from a temporary to a permanent connection.
The company made a point with their change. Users signed up in heavy numbers. However, the idea did not stick around for long. The servers collapsed. Subscribers struggled to use the internet because the server reached its saturation limit. Eventually, it completely stopped working.
America Onlineâs Final Retirement
The merger started a sequence of disastrous events. When America Online merged with Time Warner in 2000, executives thought it was a great beginning.
The market space changed but AOL could not adapt. The company could not move on with broadband from a dial-up internet connection.
Given their situation, AOL executives fell behind their competitors. Once a top online dominating force, it became a struggling company. In 2006, AOL let go of their old name ‘America Online.’
After the downfall, AOL became a subdivision of Time Warner. Their services which were once celebrated among users, the company let go of them for free.
America Online: Present Scenario
AOL Present Site
In 2009, Tim Armstrong joined the AOL as a Chairman. It was again spun off as an independent company in 2009 in order to focus on digital media and advertising business independently.
In 2010, Time Warner cut its ties with AOL. With the change in CEO, the company began to rise again forming its own brand and growth.
In 2015, Verizon acquired AOL with all its sets of brands.
In 2021, Verizon announced that sell 90% of its Verizon media division to a private equity firm named Apollo Global Management.
Apollo Global Management also acquired Yahoo in order to merge both media platforms into one.
One of the first internet service providers and web portals of the 80s and 90s, AOL had a glorious run. However, once the world moved on to a better digital era, AOL could not adapt to the sudden change.
The internet boom cut short America Online’s digital success. The emergence of broadband was not a good sign for AOL’s online presence. The dent in their business was too deep for repair.
FAQs
Is AOL a search engine?
AOL was not started as a search engine instead with time it included the search engine as an additional service of its online web portal.
Who owns AOL today?
AOL is owned by a private equity firm named Apollo Global Management which after the purchase rebranded AOL and Yahoo into a single brand “Yahoo”.
Is AOL like Yahoo?
Yes, AOL and Yahoo both offer multiple similar services such as email services, news and media content, etc. Moreover, both web portals are owned by a single firm named Apollo Global Management.
Kinnary Nensee
