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Adidas SWOT Analysis From Financial Report

Adidas has strong financial position and globally recognized sports brands as strengths. However, it outsources most production which can cause supply chain issues, and high prices limit its customer base. Opportunities include growing interest in sports and premium products. Threats include strong competitors introducing cheaper yet innovative products, exchange rate fluctuations, and potential COVID-19 impacts on production.

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Olivia Sandy
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45 views

Adidas SWOT Analysis From Financial Report

Adidas has strong financial position and globally recognized sports brands as strengths. However, it outsources most production which can cause supply chain issues, and high prices limit its customer base. Opportunities include growing interest in sports and premium products. Threats include strong competitors introducing cheaper yet innovative products, exchange rate fluctuations, and potential COVID-19 impacts on production.

Uploaded by

Olivia Sandy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Strategic Management Assignment

Olivia Sandy / 3303018011

Adidas SWOT analysis from Financial Report


1. Strengths
- Adidas have strong financial position: financial capability is critical in
protecting market share and long term profitability and sustainability.
Adidas increase sales rate on 2019 is 6% equal £23.640
- Globally known sports brands (many famous athletes endorse their product)
According to Forbes, it is ranked at #3 position brand value
- Second largest sportswear manufacturer in the world. So they have effective
global supply chain around the world.

2. Weaknesses
- Supply Chain Shortage: Adidas outsources the production of most of its
products to 3rd party or independent manufacturing suppliers, mainly in
China, Cambodia, and Vietnam
- According to Reuters, Adidas suppliers are unable to keep up with the
growing demand for mid-priced apparel in the North American market,
resulting in a reduction in sales growth by 1-2% in 2019.
- Expensive price, only some of middle to upper class customer can afford
Adidas product

3. Opportunities
- Growing Sportswear Industry: Sports and fitness have grown in popularity
with no sign of slowing down soon
- Effective marketing strategy, by innovating each year and have the newest
shoes design help them increase their sales. Example the Yeezy and Ultra
Boost shoes trend, they market their product using e-commerce and many
famous celebrities and athletes endorse their product.
- Increasing Demand for Premium Sports Products: Improved economic
situation in developing countries has increased purchasing power and
demand for premium products. Adidas can capitalize on this by expanding
into countries such as India, where discretionary income is expected to
increase by 45% by 2025.

4. Threats
- Competitor like Nike, Puma, Fila etc is increasing due of globalization and
technology advancement they can design more cool shoes rather than Adidas
with cheaper price
- Exchange Rates: Fluctuations of major currencies such as the Euro and the
US Dollar can negatively affect Adidas’s profits since it operates in the global
marketplace. Especially these day’s with COVID-19 pandemic.
- Because of COVID-19 Pandemic Adidas have to think how to keep increasing
their sales or keep the % number of their sales. Or they should have backup
plan if they cannot produce their product due of social distancing rules on the
factory.

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