The impact of SWOT analysis on the future growth prospects of Adidas

Adidas is one of the most famous athleisure brands, with billions of dollars in annual turnovers. This German brand is one of the giants in sporting goods and is always mentioned in the same breath as Nike and Puma. It has a very dynamic business process, leading to its exponential growth over the years. This can be best explained with a detailed Adidas SWOT analysis. By assessing the strengths, weaknesses, opportunities and threats, we can clearly see how all these factors collectively impact the growth of Adidas. Here I will briefly introduce you to the SWOT elements of Adidas and try to explain how they impact its growth. Read along –

Strengths

Powerful Brand

One of the biggest strengths of Adidas is, without a doubt, its powerful brand image. The logo of Adidas has evolved over the years. From starting as the “Dassler" brand, evolving into the iconic Trefoil logo, and presently the three stripes, every brand enthusiast will recognise their logo instantly. Adidas products are perceived as premium products with a large focus on sports fashion. Its powerful brand image helps them to attract a large section of customers looking for luxury sportswear.

Weakness

Outsourced Manufacturing

All the production units of Adidas are based out of East Asian countries like China, Thailand, and India. This strategy helps them to lower production costs to a great extent. However, this is also their Achilles’ heel. Since they outsource the manufacturing process to local third-party suppliers, they have no control over the manufacturing process. Premium brands usually undergo rigorous tests to ensure quality. With zero control over manufacturing processes, they have zero control over maintaining quality standards. This also forces them to be at the mercy of the manufacturers, as they can simply stop working if they feel dissatisfied with the compensation.

Limited Product Line

The narrow product line is another drawback of Adidas. While they are diversified across the international market and have offerings in different price ranges, they don’t have many product types. The segment they mostly focus on is footwear, with a limited focus on apparel. The sportswear industry is extremely competitive, and brands like Under Armour are decreasing Adidas' profits. A more diversified product umbrella would have helped Adidas to get less impacted by competition.

Fewer Celebrity Endorsements

On YouTube, you can find hundreds of videos of Nike, where famous athletes don Nike sportswear. However, Adidas rarely invests in securing endorsement deals from celebrities. This is where Adidas constantly needs to catch up with Nike, as they run away with all the top athletes each year.

Opportunities

Smart Material

Sports science is evolving with each passing day. The sportswear market is witnessing alternatives to traditional sportswear every month. Customers also look for sportswear that can withstand the gruel of an active life. These demands open new opportunities in front of Adidas. They are introducing breathable fabrics and smart clothing to cater for these needs. Adidas is continuously investing in manufacturing and developing new materials that feel superior that its rivals.

Booming Market

The ever-growing sportswear market is another big opportunity for Adidas. The general population is getting more encouraged to take up a healthy lifestyle. The introduction of gadgets like fitness bands has also promoted the demand for sportswear. As more people are joining gyms and playing sports, the demand for good sportswear is rising and showing no signs of slowing down. Although other brands are also benefiting because of the booming market, Adidas being the big fish is more capable of outpacing other brands.

Threats

Fake Products

The issue of counterfeit replicas is a persistent issue in the sportswear industry. The price tags of Adidas or similar brands are quite high. So, it is not a shocker that most customers want cheaper alternatives with the same logos. There are innumerable local brands that replicate their logo with identical names.   

Intense Competition

As with any other company, Adidas is also prone to intense competition from rival sports brands. Nike has always been their fiercest rival, and they always breathe down their neck. However, as already mentioned, Nike continuously advances them with celeb endorsements, so that’s where Adidas often falls behind.

Summing Up:

So, we can see from the SWOT analysis that Adidas has a strong brand image in the sportswear segment. Despite having a vast distribution channel, they are plagued by a few weaknesses, like a narrow product line, uncontrolled third-party manufacturers and minimal celebrity endorsements. However, they are one of the pioneers in introducing smart clothing in the sportswear segment. Moreover, they are backed by a booming athleisure market. So, there are abundant growth opportunities in front of Adidas. But whether they can do it or not depends if they can identify the requirements and grab them by their neck.

Author Bio:

If you are looking for a specialised Adidas case study writer, contact Mia Ryan. She is a marketing expert working for MyAssignmenthelp.com and specialises in offering excellent Adidas case study help.

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