Strengths
Adidas
has enjoyed decades of legacy and heritage. The company effort in establishing
a well mature brand from its youthful stages is evident. The brand
establishment was in 1949 and has since then been traveling a very long way
(Aaker, and Biel 201).
Adidas also has a strong financial position.
The company account is $4.3 billion from its 2400 stores globally.
Adidas also has a diversified portfolio with
multiple portfolios of its products ranging from accessoriness with the Addidas
brand name, clothing, and footwear including the Reebok brand.
Addidas has a strong
distribution network. It uses online store forming a strong and effective
distribution system for its supermarket stores.
The
company enjoys a strong relationship with members and collaborators especially
on areas of sustainability such as the International Finance Corporation, the
international labor organization. The strong relationship has given the company
a higher edge against competitors with sustainable businesses.
The branding of the company is also strength.
The company’s branding forms the community’s touch point. It sponsors the big
sports organizations such as NBA, UEFA, Olympics, and FiFa and also uses
celebrity endorsements to increases the awareness of the company in the market.
Thus, these approaches have enabled the company to increase its targeted
consumer base.
Weaknesses
The
price range is at a premium level. Due to the Production methods and innovation
technology the prices have gone up and are only affordable to a few customers.
Adidas has a limited product line. It has only
two brands under its group and has recently acquired the Reebok brand. Thus,
much has to be done to increase the base of its product line.
93% of Adidas production is outsourced to
other third parties manufactures mainly in Asia. It is due to the easy
availability of raw materials and resources as well as the cheap cost of labor.
The outsourcing means that the company is at risk of depending so much on
outsourcing from the Asian markets. Additionally, the consumers in developed
economies put to question the quality of products and its brands.
Opportunities
Adidas has made several sponsorship agreements
to various sports events around the world. It has made sponsorship agreements
with the Australian Olympic Committee and the Japan Football Association.
Others are with FIFA World Cup, UEFA, and NBA. It has more opportunities of
expanding its sponsorship on several major sports events that will help the
company enhance its brand strength and profitability.
Lifestyle changes mean that there is
saturation of developed economies, education, and lifestyle, changing
preferences and tastes in the developing economies. It means a stepping rise of
demand for the company’s premium services and goods.
An increase in demand for Adidas products from
the Indian market has a growth rate of
33% for premium product thus the business
expanding market size and opportunity in the future can be realized among the
developing economies (Stony Brook University, 1).
The
strategy of backward integration will enable Adidas to secure its patent right
as well as integrate its R&D of its operational team to enable the open
system of working.
Adidas has an opportunity to enter new markets
as means of succeeding in the future. It is because the high competition in
various developing countries.
It has an opportunity of generating revenues
from women segment. Till now Adidas concentrates on generating revenues only
from segment yet in the recent years the number of women engaging in sports has
increased. Thus, investing in women attire and shoes also has great potential
for Adidas. Addidas has to focus on this segment by designing women shoes and creating
new products for women.
Threats
Adidas
is currently facing stiff competition globally for its brand. Nike is the
leading sports company and main competitor for Adidas. Addidas is the second
leading sports company in the world after Nike. Apart from Nike, there are also
other regular local players competing for market penetrations and providing
substitute product (Tomic, 1).
Government regulations also pose a threat to
Adidas Company. With its 93% production taking place in China and 35% of its product
manufacturing in China, Addidas is exposed to duties, tariffs and import
regulations that are critical to the success and pricing of the company.
Addidas also faces the threat of supplier
dominancy. The fact that majority of the company’s production on outsourcing,
the suppliers have a higher power of bargaining than the company.
Work Cited
Aaker, David and Biel
Alexander. Brand Equity &
Advertising: Advertising's Role in Building Strong Brands. Psychology Press
2013
Stony Brook University (2016)
Adidas
History.
. AUGUST
2013.
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