SWOT analysis

SWOT analysis

Adidas is a German multinational corporation that usually designs and manufactures sports clothing, shoes, and accessories. It tends to be one of the strongest sports brands in the world. Below is the SWOT analysis for Adidas.

Strength

The strength of Adidas Company is the diverse range of products. The company tends to have a multiple of product portfolio with a varied range of accessories and footwear under its brand name Adidas and Reebok. The diverse range of products is evident on its website that includes bags, shoes, eye wears, perfumes, shirts, and other clothing related goods. 

There is also the strength of active in sponsoring major and minor sporting teams and events that include Olympics in major international venues that adds to its goodwill and its name recognition.  The company also has the strength with its strong emphasis on research and development. It helps the company in staying at the forefront of the industry and also offers the best possible products with the innovative solutions. Adidas also has the strength from its distribution network. Through selling its products from the online stores to a company owned stored to the supermarket stores, Adidas tend to have an effective distribution system for its products available in different channels.

Weakness

A key weakness for Adidas is the 100% dependence on the manufacturing outsourcing. Adidas does not produce any of its products that it allows them to keep the operational costs low. However, most of the suppliers and manufacturers are in Asia. A major concern with the production plant being outsources to Asia is the low product quality that may occur because Adidas does not have control over the manufacturing operations. It can lead to losses in revenue due to recalls, cost overruns, and delays. There is also the weakness of the premium price range. The high price rate because of innovative technology and the production method has resulted in an increase in price making Adidas brand only affordable to limited customers. The fierce competition in the industry is a weakness, and the product popularity tends to depend on consumer loyalty that is changeable.

Opportunities

Opportunity available for Adidas is the changing lifestyle. With the saturation of the developed economies, the changing preference and taste, the education and the changing lifestyle of the developing economies tend to provide an opportunity for a rise in demand for the premium products. Another opportunity includes leveraging the ability of Adidas subsidiary companies to focus on the specific market and demographics; thus, creating a blanket strategy that will cover the different consumer sector. Entering new markets is also an opportunity for Adidas as this will enable the company success in future because the developed countries already have high competition.

Threats

Competition tends to be a key threat for Adidas. The company faces fierce competition from brands such as Nike in the premium segment. Apart from Nike, there is regular competition from market penetrators, local players, and substitutes. Another threat is the ability of newly-developed economies such as China to produce similar products at a lower price. It puts great pressure on Adidas to lower its prices so as to maintain the market share. There is also the threat of supplier dominance. Because the majority of Adidas production is outsourced, the suppliers tend to have more bargaining power than the company. Adidas also face the threat of environmental and social concerns as a result of the human right violation and employment practices.

 Reference

Adidas Group (2013). Adidas Group Annual report 

Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in research paper services if you need a similar paper you can place your order for professional research proposal writing services.