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SWOT analysis



Traded as


1924 as Gebrder


(registered on 18
August 1949)[1]



Area served

Adolf Dassler
Igor Landau

Key people


Herbert Hainer


sportswear, sports




Total assets

Total equity

Number of

14.49 billion
1.202 billion
787 million
11.59 billion
5.489 billion

53,731 (2014)[2]

Reebok, Runtastic





Adidas AG (German pronunciation: [adidas]) is a German multinational corporation that designs

and manufactures sports shoes, clothing and accessories. The company is based in Herzogenaurach,
Bavaria, Germany. It is the holding company for the Adidas Group, which consists of the Reebok
sportswear company, Taylor Made-Adidas golf company (including Ashworth), Rockport, 9.1% of
FC Bayern Munich and Runtastic a former-Austrian fitness company. Besides sports footwear,
Adidas also produces other products such as bags, shirts, watches, eyewear and other sports and
clothing-related goods. Adidas is the largest sportswear manufacturer in Europe and the second
biggest in the world, after Nike.

Adidas was founded on 18 August 1949 by Adolf Dassler, following a family feud at the Gebrder
Dassler Schuhfabrik Company between him and his older brother Rudolf. Rudolf had earlier
established Puma, which quickly became the business rival of Adidas. Both the Adidas and Puma
companies still remain based in Herzogenaurach, Germany to this day.

The company's clothing and shoe designs typically feature three parallel bars, and the same motif is
incorporated into Adidas's current official logo. The company revenue for 2012 was listed at 14.88


Christoph Von Wilhelm Dassler was a worker in a shoe factory, while his wife Pauline ran a small
laundry in the Bavarian town of Herzogenaurach, 20 km (12.4 mi) from the city of Nuremberg.
After leaving school, their son, Rudolf "Rudi" Dassler, joined his father at the shoe factory. When
he returned from fighting in World War I, Rudolf received a management position at a porcelain
factory, and later in a leather wholesale business in Nuremberg.

Adolf "Adi" Dassler started to produce his own sports shoes in his mother's wash kitchen in
Herzogenaurach, Bavaria after his return from World War I. In July 1924, his brother Rudolf
returned to Herzogenaurach to join his younger brother's business, which became Gebrder Dassler
Schuhfabrik (Dassler Brothers Shoe Factory) and prospered. The pair started the venture in their
mother's laundry, but, at the time, electricity supplies in the town were unreliable, and the brothers
sometimes had to use pedal power from a stationary bicycle to run their equipment.

By the 1936 Summer Olympics, Adi Dassler drove from Bavaria on one of the world's first
motorways to the Olympic village with a suitcase full of spikes and persuaded U.S. sprinter Jesse
Owens to use them, the first sponsorship for an African American. Following Owens' haul of four
gold medals, his success cemented the good reputation of Dassler shoes among the world's most
famous sportsmen. Letters from around the world landed on the brothers' desks, and the trainers of
other national teams were all interested in their shoes. Business boomed and the Dasslers were
selling 200,000 pairs of shoes each year before World War II.


The adidas group are intent in sticking to founder Adi Dasslers spirit make athletes perform
better. This is the technique they have been using for years to reach out to the consumer by being
up to date, and almost in the future compared to the performance technology of competitors. The
campaign, ongoing today reflects this. The Impossible is Nothing campaign has a long speech
about reaching or achieving the impossible, selling the IDEA of this to the consumer.

Sponsorships and endorsements are where Adidas spreads, the biggest celebrity endorsements being
David Beckham and Lionel Messi of Football fame. Rap Group Run-DMC released a song about
Adidas called My Adidas, which expressed the groups love of their clothing (trainers and hoodies
mostly). This sparked an idea in the owners, who struck a 1.6 million dollar endorsement
partnership. They went on to design shoes and tracksuits for the company, becoming more and more
linked to the brand, and helping expand the brand into rap fashion, building on its already booming
sports industry.


1. Adidas under fire for unveiling new trainer with orange 'shackles' like those worn by black slaves

Critics have compared the JS Roundhouse Mids, to be released in August, to the chains worn
by black slaves in the 19th century.
The firm unveiled the trainers on its Facebook page. They feature plastic orange shackles
attached to the ankles by chains in the same colour.
The shoes have sparked an angry debate online. More than 2,000 Facebook users have
commented, with many calling the design offensive and ignorant, saying the firm has sunk
to new lows with its slavewear product.

2. Adidas has seen the largest percentage increase of negative sentiment of all the brands
associated with the ongoing FIFA scandal, according to social data.

3. Adidas suffered a big backlash after refusing to soften its position, prompting some
retailers to reduce the price themselves, eating into their profit margins.

Adidas SWOT analysis SWOT analysis of Adidas

Adidas is one of the strongest sports brand in the world. Known most prominently for its range of Shoes, the brand is
also a manufacturer for clothing and accessories. Here is the SWOT analysis of Adidas.

Strengths in the SWOT analysis of Adidas

1. Legacy & heritage: With decades of heritage & legacy, Adidas has travelled a long way to establish
itself as a youthful brand. The brand was started in 1949 and has travelled a long way since then.
2. Diversified portfolio: Company has multiple product portfolios with varied range of footwear &
accessories under brand name Adidas (premium segment) & Reebok (mid range).
3. Strong financial position: With its 2400 store globally accounting $4.3billions, the company is in
strong financial position.
4. Distribution network: By selling it from online stores to company owned stores to supermarket stores,
Adidas has an effective distribution system for their products available through different channels.
5. Branding by creating touch points with the community: Celebrity endorsements & sponsoring major
sports organizations such as FIFA, UEFA, NBA & Olympics has increased the awareness of Adidas in
the market & hence it has increased the highly targeted customer base as well.
6. Collaborations & memberships: Strong relationship within the sustainability area with organizations
such as International Labour organization, International Finance Corporation has given the company
an edge over competitors so that they can have a sustainable business.

Weakness in the SWOT analysis of Adidas

1. Premium price range: High price range due to innovative technology & Production methods have
made the brand affordable to limited customers only, especially in developing countries.
2. Outsourced manufacturing: Adidas has 93% of production outsourced to 3 rd party manufacturers
(largely to Asia) to avail of low labour cost & easy availability of resources. They are running a risk of
over dependency on outsourcing especially in Asian markets. Also, the overall quality of products
perceived by the consumers of developed economies is a major concern as far as brand is
3. Limited product line: Adidas along with the recently acquired Reebok brands, has got only 2 brands
under their group although they have got deep assortments within these brands. Thus, there is more
scope for product line expansion.

Opportunities in the SWOT analysis of Adidas

1. Changing Lifestyle: With the saturation of developed economies, changing taste & preferences,
education & changing lifestyle of developing economies, there is a steep rise in the demand of
premium goods & services.
2. Market development: Entering into new markets will be the only way to succeed in the future
because developed economies are already having high competition.
3. Expansion in product line: Expanding its product line will open a new set of opportunities while at the
same time it can differentiate itself from the competitors by following this strategy.
4. Increasing demand of premium products: If we only consider the Indian market then there is a growth
rate of 33% in demand of premium products. This tells us the future business opportunity &
expanding market size of developing economies.
5. Backward integration: This will be smart strategy if followed by Adidas as it will help Adidas to secure
their patent rights & also integrate their R&D with the operational team in order to work in open
Threats in the SWOT analysis of Adidas
1. Competition: Although Adidas is a global brand but it is facing fierce competition from other brands
like Nike which is No.1 brand and Adidas being in 2 nd Position in this premium segment. Besides this,
there is regular competition from local players, substitutes and market penetrators.
2. Supplier Dominancy: Due to majority of its production being outsourced; Suppliers have more
bargaining power then the company.
3. Government Regulations: With its 35% products manufactured in China & 93% of production
happening in Asia, Import regulations, duty& tariffs plays a critical role in the pricing and success of
the company.

Based on the all the data I collected, I can conclude that in overall customers are quite satisfy with Adidas product
and services. Customers has no doubt in the durability of material that used in produced Adidas product, however
in term of price and design, Adidas might need to put in more effort and come out with a newest design that can
attract more customers. Adidas can also launch a promotion or give a special offer of price in a certain period of
times to increase the sales volume and attract more customers.
Moreover, Adidas might also need to come out with a better idea on advertisement to promote and differentiate its
product from its competitive. Because in overall, Adidas advertisement has less influence in consumers mind and
therefore become one of its marketing weaknesses. I suggest that Adidas can invite famous athletes or artists as a
brand spokesperson to make it a more memorable brand name in consumer mindset.
In term of services, customers also were quite satisfied with Adidas services they provided and I believe Adidas still
able to improve their service to serve their customer even more sufficient to truly maximize their sales and make
their customer satisfy and happy each time they enter and leave Adidas store.