STRENGHT WEAKNESS

Brand Value 1. Supply Chain Shortage:

New Products Innovation:
Diversified Portfolio:
Young Customers prefer Adidas
Effective Supply Chain Management:
Strong Financial Position
Strong & Diversified Distribution Network:
Effective Marketing Strategy:
Branding through international sponsorships:
Celebrity Endorsements:
2. Expensive Products:
3. Limited Product Line:
4. Growing Operating Expenditure
5. Overdependence on External Supplies
6. Adidas Endorsement Deals
7. Adidas Product Turn Around is Very Slow
8. Absence of Brand Loyalty:

THREATS T1;W3
1. Competition: developing flexible product line (future change in product design,
2. Rapid Expansion and including new products and derivatives of existing product)
Adoption of Ecommerce: Increase the product line and creating new
3. Supplier Dominancy: T1:W4,
4. Loss of Trademark: High/Quality product equal to competitors can be manufactured
5. US-China Trade Tensions:
6. Exchange Rates: T9;W7
7. Global Economic Slowdown: Using upgraded technologies will help the production of adidas to
8. Fake Products be productive to cope up with the trend in the markets.
9. Technological
Advancements T8;w2
Reducing the price will help to lessen the distribution of fake
products….

T1;,w8
Creating loyalty cards for customers to patronize more the
brands’ product
w3
Increase partnership strategies and marketing intermediaries
Or better buy their rivals
 WEAKNESSES
1. 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. It has exposed Adidas to the
risk of overdependence on foreign suppliers.
2. Expensive Products: Adidas charges a premium or high prices for its
products, which has alienated low-income consumers. Only upper- and
middle-income group customers can afford over a $100 shoe.
3. Limited Product Line: Adidas Group has only Adidas brand and
Reebok brand under its portfolio, which has restricted the company
within sports footwear, sports apparel, and accessories. Therefore, a
decline in demand for sports-related products can be disastrous to
Adidas.
4. Growing Operating Expenditure: With growing prices of raw
material and labor, the operating expenses of Adidas have also kept
growing. The revenue of Adidas has increased but so have its operating
expenses. The company has grown its investment in marketing and it
reflected in the form of higher other operating expenses. Other
operating expenses of the brand grew past €9 billion in 2018 and were
more than €350 million higher than the previous year. Growing
operating expenses can shrink profit margins and affect net income
adversely.
5. Overdependence on External Supplies: Adidas depends entirely on
external partners for the production of the products it sells. It has
outsourced nearly all of its production to external suppliers located in
Asia and other parts of the world. On the one hand, while it allows
Adidas to focus on other aspects of business, on the other it adds to
operating costs. Adidas could bring costs down through backward
integration.
6. Adidas Endorsement Deals: Nike endorsements with athletes are very
high in number than Adidas, Under Armour or any other brand. In
1980, Adidas was passed on a potential endorsement with American
basketball player Michael Jordan. But Nike was able to snag Jordan
endorsement deal and even today the brand is generating billions of
dollars revenue for one of the leading brand Nike.
7. Adidas Product Turn Around is Very Slow: Adidas turnaround time
is about 18 months from design to store which is an alarming weakness
of Adidas. This turnaround is very slow and the company is unable to
capitalize on emerging trends in the market
8. Absence of Brand Loyalty: Unlike its competitors like Nike and
Underarmour, Adidas has failed to create loyalty among its customers.
Launching the Yeezie brand was a good attempt by Adidas to create
THREATS
1. Competition: The main threat facing Adidas is increased competition
due to globalization and technological advancements, which has
enabled entry and penetration of small and medium companies.
2. Rapid Expansion and Adoption of Ecommerce: Companies are
adopting the rapidly expanding e-commerce at an alarming rate, which
can pose a threat to Adidas if its main competitors such as Nike and
Puma adopt e-commerce before them.
3. Supplier Dominancy: The fact that Adidas outsources most of the
manufacturing of its products implies that the suppliers have more
bargaining power than the company. The skewed balance of power
exposes Adidas to the possibility of being held hostage by its biggest
suppliers.
4. Loss of Trademark: In 2019, Adidas lost the three-strip logo
trademark case in the General Court of the European Union, which
exposes the brand to the threat of imitation.
5. Technological Advancements: The threat posed by competitor
increases as they become more technologically advanced.
6. US-China Trade Tensions: Adidas operates globally, which implies
that the company is susceptible to the reckless tit-for-tat imposition of
tariffs between countries
7. 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.
8. Global Economic Slowdown: The effects of economic slowdowns,
such as lower sales, negatively affect Adidas, just like any other
company.
9. Fake Products: According to CEO Rorsted, 10% of Adidas products in
Asia could be fake. The number and quality of fake products for
premium shoe brands have increased significantly in the recent past,
which poses a threat to shoe-manufacturing companies.
10. Regulatory Pressures:
brand loyalty but it still has miles to go to reach where Nike is.