Adidas Case Study

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Adidas Introduction

In the year 1924, Adi and Rudolph have opened a new shoe factory and they have started a business of hand making shoes. As per the case study of Adidas, the company consist of quality brand value such as honesty, commitment along with inspiration. Young adults and children are the target market of this apparel brand. It has been observed that Adidas has become premium sportswear brand worldwide. In the year 2018, the revenue of the company has increased up to 22 billion and this store has 460 stores globally. As per the case study of Adidas, it has adopted a premium pricing policy compared to Nike and other competitors.

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Company Name

Adidas

Type of industry

Apparel, Accessories

Headquarters

Herzogenaurach, germany

Sales/Revenue

21.915 Billion

Area served

Worldwide

Number of stores

460 stores

Competition

Nike, Puma, Armour, Fila

USP

World renowned company for sports materials, clothes and accessories

Target Group

Young adults and children who love sports

Products

Boots, gloves, jerseys, shoes

Website

www.adidasgroup.com

Adidas Swot Analysis

Strengths

  • Strong position in market
  • Huge distribution network
  • Quality brand

Weaknesses

  • High price
  • Product lines are limited
  • Poor customer service

Opportunities

  • Comfortable lifestyle
  • Increasing demand of products
  • Product line expansion

Threats

  • High competition
  • Fluctuation in government policies
  • High competition from foreign markets

Adidas Analysis

In the contemporary world, Adidas has established a strong position worldwide due to its quality products and services. As per the case study of Adidas, it is one of the youthful brands of current generation and it was known for its legacy and heritage. This brand has high financial status which has helped the company to earn huge revenue every year. It has been analysed that Adidas has a diverse network for distribution and it has started to sell its product through online mode. This brand has created a huge relationship with international market in order to earn huge profit. As per the case study of Adidas, this brad has established a strong relationship with the international labour companies (adidas.de, 2019).

With the increasing strengths there are some weaknesses of Adidas, the lifestyle of people has been changed with the changing preferences and demand of people. Technological trends have improved the customer services and helped the market to raise its growth. It has been observed in the case study of Adidas that, expansion of new product lines has opened doors for new opportunities and it will help to raise the revenue. As per the case study of Adidas, there is an increased demand for premium products and services which leads to raise the market size on a large scale (adidas.de, 2019).

New innovations have increased the price of products such as shoes and clothes; and it has raised the demand of these products in developing countries. This brand has 94% of outsourced products, which has increased the risks of cost as well as labour availability. As per the case study of Adidas, it has been observed that customer services are poor. The product lines of the company have decreased the product line of the company (adidas.de, 2019).

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As per the case study of Adidas, it has been observed that there is an increase in competition between apparel brands such as Nike; as Nike is the first quality brand of world. It has been observed that there is an increased competition within the local companies of the country. It has been analysed that the bargaining power of the suppliers are much stronger than that of the company; this practice has raised the supplier’s dominance on a large scale. There ia an increasing competition from the international market and it might decrease the revenue and net income of the company (Nunes, 2019).

Adidas Pestle Analysis

Political factors

  • Labour laws
  • International supply chains
  • Decreasing manufacturing costs

Economic factors

  • Inflation rate has been decreased up to 2.1%
  • The estimated GDP growth of the country is 1.8% (tradingeconomics.com, 2019)
  • The calculated interest rate is 0.75% (tradingeconomics.com, 2019)
  • Increasing counterfeit products damper the sales of Adidas brand
  • High competition between sports and gaming companies

Social factors

  • Products are available for every gender and age group
  • Follows health trends
  • Supports Olympics

Technological factors

  • Smart opportunities for new sportswear
  • Increasing sales
  • Technology helps to combat the future risks

Legal factors

  • Build ownership with IP systems
  • Maintain celebrity ownerships
  • Follows national and local policies and regulations

Environmental factors

  • Minimize the pollution
  • Follows ethical practices
  • Manufacture product with natural products

Adidas Analysis

Political factors such as taxation policies and other international supply chains affect the quality of products and services on a scale. As per the case study of Adidas, it has been observed that the company use various political forces in order to enhance the productivity and economic growth of the country. As this brand sells its products worldwide, it is the responsibility of this brand to provide quality products to the customers. It has decreased the cost of manufacturing products and services on a global scale (Sicoli et al. 2018).

As per the case study of Adidas, it has been observed that the competition of local and international companies has increased the risks for Adidas brand. There is an increasing competition between the sports and other gaming industries of the country. Inflation rate has decreased up to 2.1%, the estimated GDP growth of the country is 1.8% and the calculated interest rate is 0.75% (tradingeconomics.com, 2019).

In the modern world, Adidas brand supports the Olympics practices and regulates the health trends in order to maintain health and wellbeing of children and adults. As per the case study of Adidas, there is an availability of goods and products for every age group and gender (adidas.de, 2019).

Increasing innovation and modern technology has helped the company to combat the future risks. There is an increasing opportunity for new products of sports. It has increased the sales and productivity of the individual on a global scale. It has been observed that new technology has opened the door for huge number of opportunities (Schmid el. 2018).

As per the case study of Adidas it has been examined that the company has built a relationship with international brands. It follows the regulations and laws effectively. It has been observed that Adidas has maintained a relationship with the celebrity in order to raise their productivity.

In contemporary world there is an increase in the pollution rate due to huge number of manufacturing industries. It has been observed that, this company has minimized the rate of carbon dioxide by using natural products and services. As per the case study of Adidas, it has been examined that the rate of pollution has decreased with the help of natural products (adidas.de, 2019).

References

adidas.de (2019). Adidas. Available at: https://www.adidas.de/ [Accessed on: 12 August 2019]

Nunes, V.H.S., (2018). Adidas acquires Under Armour: a new era in Sporting Goods (Doctoral dissertation).

Schmid, S., Dauth, T., Kotulla, T. and Leding, P., (2018). Adidas and Reebok: Is Acquiring Easier than Integrating?. In Internationalization of Business (pp. 27-61).

Sicoli, G., Bronzetti, G. and Baldini, M., (2019). The Importance of Sustainability in the Fashion Sector: ADIDAS Case Study. International Business Research, 12(6), pp.41-51.

tradingeconomics.com, (2019). Germany GDP Growth Rate. Available at: https://tradingeconomics.com/germany/gdp-growth [Accessed on: 13 August 2019]

tradingeconomics.com, (2019). Germany Interest Rate. Available at: https://tradingeconomics.com/germany/interest-rate [Accessed on: 12 August 2019]

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