Adidas SWOT Analysis 2021

Adidas SWOT Analysis 2021

Adidas SWOT Analysis: Adidas is among the top renowned sportswear brand around the globe. It is the most renowned athletic sportswear brand and is well-known by the majority of the populace. The brand is linked to fashion and sportswear brands.

The market for sports shoes of Adidas has grown tremendously as it is competitive in comparison to Nike, Under Armour has the top position in the market. 

If you compare the style of Adidas with Nike it has outperformed its rival Nike brand.

The worldwide market for sports shoes is expected to grow at an impressive rate in the coming years.

The brand is a true sports brand. The founders of the brand were an athlete whose the main goal was to develop equipment for athletes more effective. 

The brand is constantly seeking growth in all aspects of its business, starting with the products to the technologies that assist athletes in their performance.

This SWOT analysis performed by Adidas distinguishes its strengths, weaknesses as well as threats, and opportunities that could help the business to grow. Check out this article to understand the place Adidas is today.

SWOT Analysis Of Adidas 

Background of Adidas

Adidas The German footwear, sports shoes, and sporting goods manufacturer, was established in the year 1896 by Adolf “Adi” Dassler. 

It was the most popular sportswear manufacturer in Europe at the beginning of the 21st century and was the second-largest in the world.

In the past, Adidas merchandise is labeled with a three-stripe design that is still used in the present “trefoil” and “mountain” logos for the company. 

The brand name Adidas can be a short form for the name of the founder Adolf Dassler (“Adi”).

Company Adidas Group
Industry Sports Apparel, Footwear
CEO Kasper Bo Rorsted
Founded 1924
Location Bavaria, Germany
Revenue US$ 62.12B (February 2020)

SWOT Analysis Of Adidas 

Strengths

Adidas SWOT Analysis

  • Proven track record of creating new products and products that are innovative in their design.
  • Excellent performance in new Markets Excellent Performance in New Markets Adidas has developed expertise in expanding into new markets and making a success of these markets. The expansion has allowed the company to develop new revenue streams and diversify economic risks in the markets that it operates in.
  • A strong dealer community has developed a culture among dealers and distributors where dealers don’t just market their company’s products but also train the sales staff to inform the customer how to get the most value from the product.
  • Experienced track record of successfully merging and integrating companies through mergers and acquisitions. It has successfully integrated a number of tech companies over the last few years to improve its efficiency and build a stable supply chain.
  • Highly skilled workforce thanks to successful programs of learning and education. adidas is investing massive resources in the training and development of its employees, resulting in employees who are not only skilled but also motivated to strive for more.
  • Solid Free Cash flow Adidas has strong cash flows that allow funds Adidas to grow into new ventures.
  • Good Returns on Capital Investment Good Returns on Capital Expenditure Adidas is fairly successful in the implementation of new projects. It has also produced a good return on capital investment by creating additional revenue streams.
  • With a solid distribution network over the years, Adidas has established a stable distribution network that is able to reach most of its market.

Adidas Weaknesses 

Adidas SWOT Analysis

  • Supply Chain Shortage Adidas is outsourcing the bulk of its merchandise to third-party or independent producers, mostly from China, Cambodia, and Vietnam. This puts Adidas in danger of becoming too dependent on suppliers worldwide.
  • Prices for Expensive Products: Adidas sells its products at a premium, or high price, which is a disadvantage to people with low incomes.
  • Small-Product Lines: Adidas Group is the only company in its portfolio that includes the Adidas brand as well as the Reebok brand that has restricted the company’s offerings in sportswear, sports apparel, and accessories.
  • The growing operating costs: Adidas’s operating expenses have also been growing due to rising raw materials as well as labor expenses. Adidas revenues have been increasing, but with it, operational expenses also have risen.

Adidas Potentialities   

Adidas SWOT Analysis

  • Changes in lifestyle: With the increasing demand for goods and services in developed countries with changing tastes and preferences, changing education, and the lifestyles of emerging economies There is a dramatic increase in demand for high-end products and services.
  • market growth: Entering into new markets is one of the best ways to be successful in the future since developed economies already have intense competition.
  • Expanding its product range: Expanding its product line opens up a new range of possibilities, and simultaneously, it is able to stand out its business from other competitors through this method.
  • growing the demand for premium goods: If we only take into account the Indian market, then we can see an increase of 33% in the demand for premium goods. This is a sign of that the future of business potential and growing the market of emerging economies.
  • Integration backwards: It’s an intelligent method when implemented by Adidas since it will allow Adidas to protect their patent rights and integrate their R&D with their operational team so that they can work in an open system.

Adidas Threats

Adidas SWOT Analysis

  • Competitors: The main threat for Adidas is the increase in competition because of technological advancements and globalization that have allowed the entry and expansion of medium and small-sized companies. This means that Adidas will have to be competitive with major rivals like Nike, Under Armour, Puma as well as fending off new competitors and penetrators.
  • Accelerating Expansion, and Rapid Adoption of Ecommerce Companies are adopting rapidly growing online shopping at a rapid rate and could be a danger to Adidas when its major competitors like Nike and Puma are not able to adopt e-commerce prior to they do.
  • Supplier Dominance: the fact Adidas outsources the majority of the production of its products means that its suppliers have greater bargaining ability than the firm. The unbalanced power balance puts Adidas at the risk of being held hostage by its largest suppliers.
  • Loss of Trademark In the year 2019 Adidas was unable to win the trademark case involving the three-strip trademark in the General Court of the European Union This exposes Adidas to the risk of infringement.
  • technological advancements: The threat posed by rivals increases when they become technologically advanced. This means that a rival like Nike is more of a risk if they become more technologically more advanced in comparison to Adidas.
  • China-US Trade Tensions: Adidas operates worldwide and this means that it is susceptible to the reckless imposition of tariffs on other nations. A trade war is especially risky for Adidas due to the fact that the US is its second-largest market, but the vast majority of its merchandise is produced in China as well as the other Asian countries. According to Rorsted, CEO of Adidas, currency war and tariffs represent a serious risk to Adidas.
  • exchange rates: The fluctuation of the major currencies like those of the Euro or the US Dollar can negatively affect Adidas’s profit since it competes within the global market.
  • global economic slowdown The consequences caused by recessions in the economy like reduced sales, adversely impact Adidas the same way as other businesses.
  • Fake Products Based on the Chief Executive Officer Rorsted, 10% of Adidas products sold in Asia may be counterfeit. The amount and quality of counterfeit products for top shoe brands have risen significantly in recent years, and pose an issue for shoe manufacturing companies.

FAQ

What are Adidas weaknesses?

Adidas has outsourced the manufacturing for its goods through Far Eastern manufacturers. Although this method allows Adidas to reduce costs, it’s also one of the biggest weaknesses. Through outsourcing manufacturing processes to third-party suppliers operating overseas, Adidas loses some control in the way its products are produced.

What is the strength of Adidas?

It’s in the third spot with an estimated market value of $6.8 trillion according to Forbes. An Iconic Brand with a Reputable Legacy: Throughout its lengthy, rich background, Adidas has nurtured a powerful and distinguished legacy and tradition by influencing and shaping many aspects of society around the world.

What is unique about Adidas?

It is Adidas’ mission to become the top sporting brand around the globe. So all they do is based on sports. Adidas’ brand name According to Adidas, “Is the sharp edge of our spear that is visible on our innovative products and with the top athlete’s teams, teams, and sporting events

What is Adidas most successful product?

  1. Adidas Ultraboost 20 Sneakers, $180. Credit: Adidas.
  2. Adidas MD R1 Sneakers, $140. Credit: Adidas.
  3. Adidas Tiro 19 Training Pants, $45. Credit: Adidas.
  4. Adidas Stan Smith Sneakers, $80. Credit: Adidas.
  5. Adidas Adilette Comfort Slides, $35. Credit: Adidas.

Who is Adidas biggest competitor?

The top Adidas competitors are Reebok, New Balance, ASICS, Skechers, VF Corporation, PUMA, Under Armour, Nike, and HanesBrands. Adidas is a leading global sports goods manufacturer that produces accessories, apparel, and footwear for professional athletes.

Is Adidas high quality?

Is Adidas high quality? Adidas is not just a retailer of top-quality footwear for the customers of its but also products that are durable and comfortable. They are renowned because they make products with their customers in their minds. They’ve even separated items according to the demands of their customers as well as the sport that the customers follow with their minds.

Why is Adidas so successful?

Due to the top quality of its manufacturing, the innovative materials, and the brand’s successful identity featuring the iconic three stripes The company quickly reached the top of the market. While Adidas introduces new models of shoes every year, the timeless classics are still in the Adidas product line.

What do the 3 stripes of Adidas mean?

Prior to when Adidas acquired the logo trefoil at Karhu Sports, they added three bars to all their merchandise, and called themselves”the “three stripe company.” The three stripes were intended to represent the international and diverse appeal of the company by symbolizing the three landmasses of the world that

Adidas SWOT Analysis Conclusion 

Despite turning 100 years old, Adidas has never lost its inventiveness, which helps to position itself as the second-largest manufacturers of sports gear and apparel. 

Adidas dominates the market in Germany and also has a prominent presence in the other Western European countries, as also within the Asia Pacific region. 

Adidas offers promising opportunities to grow its business through its mobile platform and is focusing specifically on the North American market. 

Adidas has a long-standing history and has a competitive advantage in the world’s most-watched game of football.

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