SWOT analysis of Adidas (Adidas SWOT)

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SWOT analysis of Adidas (Adidas SWOT)

This detailed SWOT analysis of Adidas (Adidas SWOT) aims to examine the strengths and the weaknesses of Adidas. It also aims to examine the opportunities the company should explore and the threats it should keep an eye on. Adidas is a multinational company founded by Adi Dassler at the small town of Herzogenaurach in Germany.

Strengths of Adidas

Global presence of Adidas is noteworthy. It employs 62,000 people from over 100 countries. Its total number of own-retail stores worldwide is over 2500 (Adidas 2021). With these figures, it is clear that Adidas has gained significant level of experience since its inception in 1949.

Adidas has gained global recognition as well. It was the second most valued sports brand in the world in 2017 (Rinky, 2018). According to Tighe (2020) it is currently the 3rd most valuable sports brand in the world. It is worth mentioning that Adidas is a major supplier of team kit to many international football teams and clubs.

Adidas has an extensive distribution strategy. Its products are available worldwide through channels such as franchises, mass merchandise, and speciality stores. In addition, it has its own online retail operations and products are also available in other online platforms.

The logo of Adidas with three stripes is perhaps one of the most iconic and recognisable logos in the world. Likewise, the product portfolio is extensive as well. Adidas has come up with some excellent and innovative products over the years. The products are also very famous for high quality, and this high-quality commitment has become one of the driving forces behind Adidas’ global success.

Adidas won several awards in the past years. For example, it was listed in the ‘Global 100 Most Sustainable Corporations in the World’ and recognized as leader in its industry in 2019 (Adidas, 2021).

Weaknesses of Adidas

The issue of weakness is an import element in the SWOT analysis of Adidas (Adidas SWOT). Adidas products are often unaffordable for many people, particularly in developing countries. The company usually keeps the prices of products higher than its competitors.

Adidas has difficult stories to share as well. For instance, in February 2021, it confirmed plans to sell its famous brand ‘Reebok’ after 15 years of ownership because of its struggling performance even when the sports clothing industry was doing really well. It bought Reebok in 2006 to compete with Nike; however, it is clear that the aim has not been achieved resulting in the announcement of sale with less than the price it originally paid 15 years back (Butler, 2021).

Adidas has drawn a number of criticisms over the years. For example, it has been accused of working with suppliers that have very poor and socially unacceptable working conditions. Adidas does not have a good track record with regards to upholding trade union rights either (Oxfam Australia, 2018). For example, it fired 33 workers at the Panarub factory in Java (Indonesia) because of their strike for better pay in 2005.

Opportunities for Adidas

Adidas saw double-digit sales increases in China and North America by the end of 2017 (Thomasson, 2017). Amaro (2021) reports that its sales in China grew by 156% over the first three months of 2021. Its performance has gone up recently in Europe, the Middle East, and Africa as well. Therefore, exploring further expansion opportunities in these key markets is worth the effort. Likewise, entering into new geographical markets should help Adidas widen its span of operations and minimise challenges from competitors.

Customers’ taste and preferences are changing constantly. Therefore, introducing new products is worth the effort. Adidas is well-known for new product design and innovation, and therefore new product development is consistent with its core competences. Similarly, as the sports and fitness activities have increased in popularity, Adidas will surely see more demands for its products.

Threats to Adidas

Threat is the last element to address in the SWOT analysis of Adidas. Adidas works with around 1200 factories around the world. Therefore, any serious conflict with the suppliers, and breakdown of relationships may turn out to be a considerable threat.

Adidas faces a fierce competition from Nike and Puma. Likewise, constant competition from small and local competitors and substitute products is also a threat to Adidas.

We hope the article on the ‘SWOT analysis of Adidas (Adidas SWOT)’ has been helpful. You may also like reading Marketing mix of Adidas (4Ps of Adidas). Other relevant articles for you are:

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Last update: 31 August 2021

References:

Adidas (2021) About us, available at: https://www.adidas-group.com/en/about/profile/ (Accessed 31 August 2021)

Amaro, S. (2021) Adidas reports 150% sales hike in China despite local boycott over human rights, available at: https://www.cnbc.com/2021/05/07/adidas-earnings-q1-2021-sales-up-27percent-despite-lockdowns.html (accessed 27 August 2021)

Butler, S. (2021) Adidas confirms plans to sell Reebok, available at: https://www.theguardian.com/business/2021/feb/17/adidas-confirms-plans-sell-reebok-sportswear (accessed 31 August 2021)

Oxfam Australia (2018) adidas – So what’s the problem with adidas? Available at:  https://www.oxfam.org.au/what-we-do/ethical-trading-and-business/workers-rights-2/adidas/#workers (Accessed 14 July 2018)

Rinky, S. (2018) Top 10 Sports Brands in the World 2017, available at: http://textilefocus.com/top-10-sports-brands-world-2017/ (Accessed 10 July 2018)

Tighe, D. (2020) Most valuable sports business companies worldwide 2019, available at: https://www.statista.com/statistics/253349/brand-value-of-sports-businesses-worldwide/ (accessed 28 August 2021)

Thomasson, E. (2017) Adidas expansion in China and US boosts third-quarter profit, available at: https://www.independent.co.uk/news/business/news/adidas-china-expansion-us-q3-profit-2017-sportswear-firm-a8045271.html (Accessed 10 July 2018)

Author: Joe David

Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.