Professional Documents
Culture Documents
1.0 INTRODUCTION
Adidas is a Sports Clothing and a footwear company which was initially
established in 1920 by the shoe maker Adi Dassler who resided in the
village of Herzogenaurach in Germany after manufacturing the very first
Adidas shoe.
Dassler was not only a shoe maker, He was also an athlete which helped
him more to produce high performance products for athletes by making
use of his experience. Dasslers endeavor has merited him with 700
patents and more industrial property rights.
Ever since Adidas provided products for the very first athletes at the
Olympic Games in Amsterdam in 1928, Athletes who were utilized with
Adidas footwear and apparel have achieved more than 800 world
records and medals at Olympic Games.
The Formation of the company has been fast with an increasingly quality
background throughout the past 40 years. It was and is still the most
outstanding organization for fulfilling the requirements of athletes by
making use of their experiences to produce the products.
Adidas includes three core brands which are namely Adidas, Reebok and
Taylor Made. Focusing not only in products but also in their marketing
strategies that have taken this cooperation to the next level by presenting
award winning advertising and public campaigns.
This report consists of the SWOT and PEST analysis of Adidas, the E-
Marketing strategies that are currently being used and the future
methods and also about the legal and ethical Issues that Adidas has to be
concerned about.
1. High Price Range The price of the products are too high due to the
latest technologies that are used to develop the footwear and
apparels. The products might only be available to a certain level of
people. Another reason for the increase in cost is due to the raw
material cost where some of them have to be shipped to European
warehouses from Asia for manufacturing due to the scarcity of some
materials.
2. High Outsourced Production Almost 93% of the products of Adidas
is being manufactured in Asia due to the low labor cost and high
availability of the necessary materials. This factor can give them a
high risk of sudden failure of the production because of a separate
outsourcer.
3. Insufficient customer service The customer service of Adidas is
very poor since there is no guaranteed instant two way
communication establishes for the users especially in the E-
commerce market.
4. Low investment on advertisements Advertising of Adidas is very
low as you must have not seen a lot of offline advertising of adidas
products. It is more likely to see Adidas shoes on sporting events and
not as random television ads.
OPPORTUNITIES
4. New brands The latest brands such as GAP, CAT and New balance
has a good and increased performance in their advertising where
Adidas is less effective in their advertising.
5. Global Economic Crisis There is a global economic crisis or a
recession in the word today. This is a period where people have many
financial issues that limit them to buying certain things and are less
likely to spend their money on things especially like branded shoes.
Political factors include all rules that are both formal and informal and
also the government and legal issues that must be considered when
operating the business. The current political state for Adidas is stable
since the UK has a democratic government, they are less likely to
introduce controversial policies because otherwise they will be voted out
in the next election. Another Political Factor includes monitoring of any
hazardous substances that may affect the health and the environment of
employees such as materials like PVC. Adidas is a Multinational
Company therefore it must be aware of policies around the world where
their outlets are being run. Taxations of governments of the countries
that operates Adidas must be considered since majority of products are
being supplied from the Asian countries therefore the import tax are
being applied accordingly.
Another main factor that affects the sales growth is that when there is a
main sports event such as the Olympics, there will be a high increase in
sales but when there is no major event as such it might be a less
progressive year for Adidas.
Adidas has increased their sales by producing quality products using low
cost materials which were available to them from Asia. But because of
the Adidas strikes mentioned above in China, sales of that region has
decreased because they had to pay the employees a higher amount.
SOCIAL FACTORS
Adidas introduced the worlds first smart shoe with a microchip inside it.
Adidas uses there best technologies to manufacture footwear with
cushions to make the consumers comfortable and supports their health.
Now, the internet is available for the customers to buy the Adidas
products digitally with more convenience. Adidas has introduced a
wireless mp3 player and a hot melt system that is safe for the
environment. For packaging purposes, Adidas uses friendly, recyclable
packaging systems. The technologies owned by Adidas are highly used
for research and development to invent new products especially footwear
which will give them a better chance on competing with their Rivalry
Nike. One of the recent innovations of Adidas are boost running shoe
that allows the runner to bounce.
The latest headline of Adidas is Creating the New to grow their market
fast for their next four years as their marketing business plan. Adidas
targets the needs and desires of the target consumers. Adidas has three
main Marketing strategies and they are Speed, Cities and Open Source.
When it comes to speed, Adidas focuses getting fast customer
satisfaction and internal decision making. Next is Cities where they want
to increase their market sales in six main developed cities including
China and Americas. Final element is Open source that signifies the
partnership of athletes to be a part of their company.
Customers who wants to get updated on their latest trendy styles and
new innovations can sign up to receive the E-Newsletter of Adidas. This
will send the user a newsletter through their Email notifying the users on
their products.
Apart from the main online strategies of marketing, Adidas uses offline
methods such as sponsoring of sports events and billboard advertising in
popular and main cities of the world. This method itself has gained
Adidas more profits than what they earn every year. For instance, in
2016 one of the main sponsoring events they did were the sponsoring of
the England cricket team in the T20 world cup. Why this can be an
effective method in advertising is because the fans of the England team
will look forward in buying branded products in Adidas.
Although this can lead in an increase in the profit margin, it will be not
be able to target online customers who are not fans of cricket therefore
online methods must be used to promote the offline methods. Live
streaming of the match via Internet is an online method. Today, we can
use tags to videos therefore tagging the Adidas website will attract
Adidas fans to the site.
Stable Financial state is one of the main advantages Adidas is having and
according to my point of view this is because Adidas recruits the best
people for all their processes including their marketing sector leading
Adidas to a long-term success.
1. Legal Issues
The top most topic on your priority list when you run a business should
be regarding the dangers of litigation. One of the main legal issues faced
by a company is privacy policy. Adidas gathers information of customers,
processes and stores them in a database for later use. They must ensure
that the customer information arent sold or distributed to any other
person but only be accessed by the user after an authentication process.
2.Ethical Issues
Ethical issues are problems that arise due to the wrong societal decision
making. One of the most important ethical issue to consider when E-
Marketing in a website is the content. The content of the website must
not be copied from elsewhere. It should be an honest and genuine
writing that treats fairly to all people.
5.0 CONCLUSION
Last but most importantly, Adidas must ensure in complying with the
local and international standards and rules when doing the business.
Since Adidas is a global company, it tends to face many difficulties as
there are many competitors awaiting for space in the Sports market.
Therefore, they must not violate any rules especially Employees
standards that has resulted in many complaints of companies. However,
considering everything mentioned in this strategic evaluation, Adidas is
having a strong company background that can result in a growing profit
margin for a long time period.
6.0 REFERENCE