Adidas Case Study Analysis

Overview of Adidas Case Study

The paper will provide a brief discussion of Adidas, specifically focusing on relevant information, SWOT, and pestle. It is a German multinational corporation which is founded and Herzogenaurach, Germany for designing and manufacturing shoes, clothing, and accessories. The headquarter is also present in Germany for manufacturing shoes, clothing, and accessories. Considering the fame of Adidas, it is highlighted as one of the major sportswear manufacturers.

It is considered one of the largest global manufacturing brand in Europe which provide an extensive supply of sports equipment, shoes, and accessories, and it is the second-largest in the world, after Nike.  Nike is till now the highest manufacturing brand around the globe which manufactures a range of products for bringing revenue. The frequent revenue is not only bringing the customers from athlete backgrounds rather many businessmen and celebrities are the loyal consumer of this brand.   

It is the holding company for the Adidas Group, which encompasses the Reebok Sportswear Company.   Considering the current statistics, 8.33% of the German football club Bayern München, and Runtastic, an Austrian fitness technology company are under the Adidas company.   In the current list of businesses in 2018, Adidas' revenue is approximately €21.915 billion. The three stripes are Adidas' identity mark, having been used on the company's clothing and shoe designs as a marketing aid. It is highlighted as one of the major brands that create revenue.  Adidas bought the brand in 1952 from Finnish sports company Karhu Sports for the equivalent of 1,600 euros and two bottles of whiskey. buy assignments for college students and order now!

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Discussion and Background:

This one of the most common and largest companies which was founded by Adolf reflects in the first initial of the company such as "Adi". The second founder of the company is Dassler who designed sports shoes in his mother's scullery room in Herzogenaurach of  Germany after he came from one of the greatest wars in the world such as World War I.  Taking a deep insight into the history, it was suggested that in first July 1924, Rudolf, his elder sibling merged the business and they give the name such as "Dassler Brothers Shoe Factory".

However, the electricity supply in the scullery room was untrustworthy and hence, the brothers used unique interventions like power from a stationary bicycle to run their equipment to develop various brands around the globe.  For marketing, Adidas separated the brand into three chief groups with each a separate focus. For example, the first segment is Adidas Performance which was intended to uphold their dedication to the athlete to enhance the revenue in the sports industry.

The second segment is Adidas Originals which was intended to uphold the brand's earlier designs that remained a prevalent lifestyle icon as well as Style Fundamentals. India has been a very speculative market for Adidas. Despite this Dave Thomas, managing director of Adidas in India is ambitious about the country's potential. The company hopes to double its revenue from Rs. 805 crores by 2020. In 2015, the company had signed Ranvier Singh a prominent Bollywood actor as a brand ambassador for the company's products. Hence, it took many years to establish the revenue and main idea of the research and products.

Adidas segmentation for the target group Young men, women, and children who have a passion for fitness and sports.  The target group is urban upper-middle as well as upper class and Adidas Positioning. The following paragraphs will discussion on the   Adidas SWOT analysis and pestle.  Lastly, the paper will provide an insight into the overall company details in the conclusion parts.  Case studies require SWOT and PESTLE analysis and justified solutions.  The SWOT and PESTLE analysis for the organization is as below-

Adidas strength:

1. It is highlighted as long heritage as well as high brand value from the years of 1924.
2. Adidas is one of the sponsors in the major sporting events including the Olympics as well as major sportsmen in the teams.
3. Adidas has established its presence around the globe and hence it is internationally recognized as one of the top brands with a heritage with employees of 45,000 employees.
4. It also has a huge diversity in terms of various  product portfolios such as sports shoes, equipment to clothing and accessories, perfume, female shoes, and other
5. Strong as well as innovative marketing exhibited by the company since 1924 when it has created strong brand retention in the consumers.
6. Exceptionally well advertising of Adidas products through TVCs, online ads, print media, and celebrities are the major strength of the program
7. The brand is associated with several sports stars as their brand ambassadors

Adidas Weaknesses

• It is highly expensive with charges a premium or high prices for its products. Hence,  it exhibits low retention in low-income consumers. Only upper, as well as middle-income group customers, can buy a 100-dollar show shoe.
• Shortage of Supply Chain is a major issue for Adidas as it outsources the production via any third party and hence, manufacturing suppliers, mainly in China, Cambodia, and Vietnam.  Hence, it increases the dependence on the supplier.
• Low product line because the Group has only Adidas brand along with Reebok brand, unlike other well-known brands.

Opportunities:

• The development of eCommerce is important. The underlying reason is that several consumers use e-commerce sites for gaining insight into the products. Hence, Adidas incorporated Instagram’s checkout feature into its distribution which resulted in a 40% increase in online sales and other platforms such as Facebook and Snapchat.
• Increases in technology or smart devices.  The underlying reason is that technological advancements have allowed the expansion of new artificial resources that are improved as well as more beneficial than traditional materials.

Adidas Threats:

• Competition is one of the major threats to the company.  Nike, Under Armour, and Puma are major company competitors.  Globalization enabled the entry and penetration of small and medium companies.
• Adidas outsources all the products manufactured which suggested the third party has higher power than the company.

Pestle of the company:

Political factors:

Many political factors enhance the revenue of the company. Adidas supplies, ships as well as distributes its manufactured materials around the globe.  Therefore, Adidas requires to develop rapport with the international supply chains as well as follow political procedures during supply. The company also uses political forces as a method of intervention against counterfeit products. Product safety laws must be followed in such cases. Adidas is required to abide by these rules for each sale as well as each product. The company tends to outsource the expansion of its invention to third-world nations.

Economic factors:

Sales are often driven by sports buyer trends as well as preferences. Around the globe, the sports material industry is expanding. approximately 50 largest companies around the sphere subsidize approximately 70% of the industry’s income. Adidas is one of these organizations.

Social Factors:

 Adidas altered the designs of their products to comply with the interest of clients. Products are frequently accessible for gender or lifestyle.  However, the major core focus groups are health-conscious buyers with an intense love for sports and expensive classy products. They must keep up with health tendencies as well as preferences to provide to their audience. They also offer business helper programs. Similarly, the company often supports societies as well as fosters the health of individuals. Adidas also supplies the materials for the Olympics.

Technological factors:

They offer actions to enhance the presentation for trainers as well as professionals in the sports industry. For durable solutions to fitness issues, they use natural material substitutes. Hence,  the company uses these technical progressions to dump into new industries.

Legal factors:

Adidas has possession of intelligent properties as well as IP systems. They also have projected various patents for their copyrights and infringement. The patents also serve as a lawful defense to end fake businesses around the globe. As a large business, they have trademark production.  To develop its connection to the sports world, Adidas sanctions celebrity sponsorships as a form of advertising for enhancing revenue. And follow full compliance with national and local laws.

Environmental factors

Adidas aims to reduce ecological influence for enhancing revenue and reducing climate change. They must screen for dangerous substances as well as remove them for reducing climate change. This may be why they offer natural resources in their crops. They follow ethical business practices by committing to ensure supplies are following regulations in every country their products are manufactured.

Conclusion:

On a concluding note, it can be said that Adidas is one of the largest organizations for enhancing revenue. Adidas faces disagreement for approving low wages in third-world republics. However, such disagreement reduces the cost of materials but does not reduce the revenue and aims for reductions in ecological influence. They also face subjects with industries trying to copy and sell Adidas’ products as their own. They follow ethical business practices and Adidas also supplies the materials for the Olympics. Luckily Adidas has design patents that will prevent exact copies from being sold. Sales are often driven by sports buyer trends as well as preferences.

References:

Mahdi, H.A.A., Abbas, M., Mazar, T.I. and George, S., 2015. A Comparative Analysis of Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the context of a Dynamic and Competitive Environment. International Journal of Business Management and Economic Research, 6(3), pp.167-177.

Wilson, H.D., 2012. Comparison of the Individual Characteristics in the Outsoles of Thirty-Nine Pairs of Adidas Supernova Classic Shoes. Journal of Forensic Identification, 62(3).

Lombo, V.E.P. and Tielung, M.V., 2014. The impact of celebrity endorsement on youth consumer purchase decision on Adidas apparel product. Jurnal EMBA: Jurnal Riset Ekonomi, Manajemen, Bisnis dan Akuntansi, 2(3).

Dickson, M.J. and Fuss, F.K., 2011. Effect of acceleration on optimization of Adidas Bounce shoes. Procedia Engineering, 13, pp.107-112.

Farisi, S., 2018. Pengaruh Citra Merek dan Kualitas Produk terhadap Keputusan Pembelian Sepatu Adidas pada Mahasiswa Universitas Muhammadiyah Sumatera Utara. The National Conference on Management and Business (NCMAB) 2018.

Crasto, S.G., Kee, D.M.H., Xin, C.W., Juin, H.X., Man, L.K. and Pandey, D., 2020. Product innovation by Adidas Group through sustainability. Journal of the Community Development in Asia (JCDA), 3(1), pp.1-7.

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