Detailed Marketing and Management Report: Adidas Australia Analysis

This report provides an in-depth analysis of Adidas Australia's market position and business strategies. It begins with an executive summary highlighting Adidas's significant market share and customer base, followed by an introduction to the company's structure and mission. The report then delves into a PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors impacting Adidas. A competitive environment analysis identifies key competitors like Nike, and the report assesses Adidas's strengths, weaknesses, opportunities, and threats through a SWOT analysis. The report concludes with recommendations for new brand extension product lines. The assessment covers the Australian market, providing insights into the footwear industry and offering a comprehensive overview of Adidas's current standing and future potential.

Management
Marketing and management
Student’s name
9/8/2019

Marketing and management 1
Executive Summary
This report mainly highlights about the Adidas Company, which is based in Australia,
therefore, this report states that adidas has huge market share and also have a huge customers
segment which helps them in gaining more success and profits. This report also highlights about
pestle analysis, the competitive environment in which it states that Nike is one of the famous and
well-known brand and the biggest competitor of Adidas Company. Other than this, strength,
weakness, opportunities and threat are also highlighted which states that they needs to adopts
more promotional tools, more marketing techniques, focus more on services aspects and lastly,
being innovative and creative wit time leads to more success and generation of profits for the
company in long run.

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Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Mission and customers groups.........................................................................................................3
Pestle analysis..................................................................................................................................4
Competitive environment................................................................................................................5
SWOT analysis................................................................................................................................6
Strength........................................................................................................................................6
Weaknesses..................................................................................................................................7
Opportunities...............................................................................................................................8
Threat...........................................................................................................................................8
New brand extension product line recommendations......................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Adidas is one of the well-known sportswear manufacturer companies. This particular
brand is not only famous worldwide but its name has become so well known in terms of sport
wear, shoes and other products in which it deals in. In terms of structure of Adidas, company
consists senior level, middle level and entry level of executives, which handles the functioning,
and operation of the company. As they follow the strict organizational hierarchical structure,
which ensures that, the responsibility and roles are properly divided and followed. Structure of
Adidas mainly comprises of CEO, CFO that includes, chief corporate communication officers,
general counsel, global heads of brands, head of public relations, members of board and global
sales. Other than this, it also includes chairperson of board, vice chairperson of board and lastly
the members of the supervisory board.
Mission and customers groups
If we talk about the vision and goal of Adidas, they think of innovation and design every
time, which helps the athletes to achieve all skills levels and the peak performance with every
product, which they bring in the market. Moreover, they are also customers centric, with the aim
of improving the quality, look, feel and comfort and to match the exceed customers expectation
and generates the higher value in the market (Jin, & Cedrola, 2018).
In terms of product history, in 1920, Adolph Dassler soccer player invented the spiked
shoes, 4 years later Adi and Rudi his brother founded the German sport shoes company known as
Gebruder Dassler and later it was known as Adidas. In 1925, the company started making leather
shoes along with the track shoes. In 1928, they started making shoes to gain world reputation.
Later in modern era, Adidas became strong and a well-known brand in an entire market till date.
With this, it is seen that Adidas is targeting the young adults as well as children who are more
passionate towards fitness and sport. Majority, they target 15 to 30 age group people who lie
under the middle class or the upper luxury class of the customers (Chiu, & Choi, 2018).

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Pestle analysis
The Pestle analysis helps in known more about the business environment. It mainly talks
about the various aspects, which tell about the valuable insight about the operation, and the
challenges in which the company will further face the challenges raised in the market.
Political aspect of Adidas mainly highlights that, Adidas faces the major political issues,
which affects the changing trade policies and political unrest in many countries. In Adidas
Australian context, adidas tackles various issues in order to sustain its global presence and
financial positions. It is seen that there are many tariffs and restriction are imposed over the
Chinese products, which is the huge concern for adidas in order to increase the product price.
Moreover, adidas also have a huge role in shipping and distribution of the products to achieve
the overall goals without improving its complex supply chain in order to meet its political as well
as international procedure. Such, aspect helps the adidas to improve its profitability, sale and its
brand awareness (KAL, & ABED ALGHANI, 2019).
Economic aspect mainly highlights about the unemployment, wage performance,
taxation, inflation and interest rate, which mainly affects the adidas performance and
profitability. In this, Nike and Adidas both deals in the sport footwear, in 2011, the both brands
ratio was 52.7%, which highlights that both the companies are controlling almost half the
industry. Moreover, it is also seen that adidas is manufacturing more than 50% of products in
china. As the rise in labor, cost of the company mainly transfers the production capacity to the
other countries. Hence, this factor mainly highlights the economic factor and helps in resolving
the issue related to import and export of goods (Schrempf-Stirling, 2018).
Social factor, highlights about the culture, region, lifestyle and the preferences, which
mainly affects the performance and the brand image and customer loyalty of Adidas. When they
are implanting any strategies, they majorly consider community and its beliefs. It is seen that
with time, people of Australia are more aware about their health for that, they need sportswear,
footwear and apparel. Moreover, in social aspect social media has majorly empowered customers
to be more active towards health and helps adidas to increase its sale and brand awareness.
Technological aspect helps adidas in embracing innovative technologies, which
generates competitive edge over its competitors. As recently it has seen that adidas has opened

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up with the fewer speed factories to gear up its production. Further, they are trying to expand its
technological aspect to other factories, which are located in Asia and other locations. Moreover,
adidas has also incorporated data collection integration technology in its product so in order to
measure the performance and customers. This aspect therefore helps in increasing the
productivity, their market share as well as helps in maintaining its brand loyalty in long run
(Prendergast, & Trencher,2018).
Legal aspect highlights about the company’s latest legal proceedings. It mainly
comprises of trade description act, sales, supply of its products, press complaints and advertising
standards authority and television commission are taken into consideration. Adidas in its legal
aspect is always aware about its export, import, sales, while selecting commercials and names of
products. Moreover, they also have design patents, which generates legal protection to the
business along with this they also follows full compliance with its national as well as local laws
(Good, 2017).
Environmental factor highlights that adidas is trying to minimize the use of banned and
restricted material in production, its products and stores. They are also working over reducing the
carbon emission and working over attaining the companies 2020 targets. Moreover, adidas is
also following the ethical business practices by ensuring supplies and following regulations for
the products in Australia (Ho, 2014).
Competitive environment
In terms of competitive environment, adidas has both direct as well as indirect
competitors in the market. In terms of direct competitors’ adidas has Nike, Fabletics, under
armor and much more. However, Nike, it is the closest competitor of Adidas. Both have a strong
market value along with the strong market position. However, adidas is very strong brand by its
strips, which are known worldwide. Other than this, Adidas also have new fashion shoes,
apparels, and a strong social media presence to influence the large customers’ base. The main
reason behind adidas over Nike is cheaper rates. As Nike is making its shoes cause $5000,
whereas adidas are making at cheaper as compared to it and tends to be affordable (Lagnese,
2017).

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Other than this, adidas also have a major indirect competition with skechers well-known
brand in sportswear. Skechers do have quality but adidas takes it to another level, where they
make things like athletic gears. Other than this, they also have Gap, Reebok, American Apparel,
converse, Puma. If we talk about the market share aspect, Nike annual revenue generation
touches to $39.1B and recent it is seen that it touches $122.3 billion adidas in comparative to it is
$7.7B, which is very less. Adidas most valuable acquisition was the reebok sportswear, which
took place in 2005 for around $3.8 billion. Moreover, Puma market share in comparative to
adidas is low it is $6.8B which is quite normal. Moreover, Adidas also adopts the digital strategy
and collaborate to create and generate a lifestyle brand and such aspects help them in
maintaining their competitive edge as compared with the other brands (Boeuf, Carrillat, &
d’Astous, 2018).
Adidas keeps in knowledge the requirement, the wants and the needs on the regular basis,
and hence, such aspects help in generating more opportunities for customers as well as company
to earn more. Lastly, adidas keeps on redesigning and aligning the supply chain with its business
strategies in order to capture customers demand for its bestselling products and along with this, it
helps in enhancing the company’s position and enhancing desirability. Hence, by keeping all this
adidas group aims to become the first fast sports company by 2020. Although by speeding up
production is beneficial, adidas ensures its faster approach along with the sustainability efforts
and brand image which highlights that adidas is in extremely beneficial position (Ahmad, et al,
2018).
SWOT analysis
SWOT analysis majorly highlights about strength, weaknesses, opportunities and threats
in order to evaluate the company’s competitive position and develops strategic planning as well
as current and future potential of the company.
Strength
Strength of adidas highlights that it is one of the powerful brand alongside, Nike and
others. Adidas is one of the premium sportswear brands that are recognized in every corner of
the globe. This is all because it manages to capture such a larger fraction of the luxury
sportswear sales. Other than this, its market presence is also higher as compared to the other

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brands. As Australian, greater china and America is performing well in the first quarter of 2017.
Growth through acquisition in recent terms is also majorly affected such as adidas has 26% till
date (Kalantari, & Johnson, 2018).
Moreover, as an strength, adidas also applies various innovative techniques and market
strategies. Such as, metropolitan cities are mainly targeted by the adidas. This strategy has been
effective and results are visible in the form of greater financial results. Other than this, adidas
keep on innovating its design and its products on the regular basis. Such as launching of boost X
a running shoes for women, fusion2.0 also provide custom fit and fit to the athlete foot for the
better running experience. Lastly, adidas uses partnerships and sponsorship for long for the
marketing purposes. Such practices tells that adidas has a strong financial positions. It generates
it sales $21.218 million in recent year (Wildfeuer, 2018).
Lastly, in strength aspect, adidas has the extensive distribution strategy, as its products
are available worldwide through the various channels such as franchise, mass targeting and
specialty stores. In addition to it, adidas has its own online retail operations and products
availability, which helps them in earning more for the online sources or the platforms (Craik,
2019).
Weaknesses
Weaknesses of adidas mainly highlights that their products are often unaffordable to
many people particularly for those who belongs to the middle class. As compared to Puma and
skechers, adidas brand has the higher rates for its products offerings.
Other than this, spur in marketing investment majorly affects the group marketing and the
operating expenses. In 2016, the point of sale and the marketing investment were at 13.9% of its
sakes. This shows that the company faces the higher operating cost and then expenses overall.
Another weaknesses, is the tough competition from Nike company as it is the second largest
company who is famous for its sport wears. As such, tough competition creates the customers
retention related pressure over company. Nike dominates the shoe market and therefore the
competitive pressure on adidas is high, switching cost is low and customers retention is a
challenging area (Lee, D et al 2016).

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Lastly, adidas is facing a narrow product line, adidas has less diversification in its product
categories and they mainly focus over its footwear aspect. It is seen that if an adidas is being
more diversified in its product offering it will be more successful brand and will have less shaken
market changes or the newer competitors. Moreover, adidas has fewer endorsements as
compared to Nike due to which Nike growth is constant and helps them in generating more brand
value than adidas.
Opportunities
Opportunities of adidas highlights that to keep with the competition the company needs
to diversify its product line likewise, they needs to generate close to 60 new foot friendly designs
each year. They need to develop its venture and along with its make, it more stylish designs and
cuts so that it helps in attracting more customers than usual. Other than this, the company should
start tieing up with the emerging sports team players internationally which helps in boosting
adidas brand presence. Additionally, adidas should also focus over its budget range, which are to
be designed especially for the college students and for the young professionals (Molinillo,
Ekinci, & Japutra, 2019).
Other than this, adidas should must start with product and design innovation, in which
continuous product and design innovation leads to the good results for sales and revenue
generation aspect. This helps in attract and targeting lot of customers and making them retain for
the longer period of time. Expanding in the emerging markets as adidas needs to target various
markets, regions and countries for the sharper growth. Lastly, adidas needs to focus over the
backward integration for the generation of the more profit and success in lesser time
(Holtbrugge, & Schuster, 2017).
Threat
Threats as adidas highlights that Nike presence leads to the market dominance as
competitive pressure from the other brands like puma are also there. Political tension and
economic uncertainty also makes the situation challenging for adidas in few of its key markets.
Other than this, economic uncertainty has a major impact over the financial performance of the
company as more currency fluctuation also leads or threatens the profits of the company.

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Moreover, over dependence is also one of the major threats, which is faced by adidas and
affects the long-term aspect and make it risky for the business. It is also seen that other brands
are offering more attractive, innovative, and stylish and varieties, which further leads to major
and tough competition among brands. Local brand are nowadays leads to more competition to
adidas. It is also seen that adidas works with almost 800 independent factories from around the
world generates serious conflicts with the suppliers and turns out to be considerable threat
(Schmid, et al, 2018).
New brand extension product line recommendations
 According to the market analysis, Adidas should adopt the diversification aspect or
strategy through improvements in its products offering as well as technological
advantages. So that it helps in increasing the market, share and helps in maintaining the
customers loyalty in a long run.
 Adidas should consider the customers taste and likes as customers are the most important
aspect for every business. They need to be more diversified product portfolio should be
implemented (O'Brien, et al, 2019).
 Adidas by diversifying should regain its strong competitive power and leadership
position. It strives to create that culture of innovation and creativity with the insights and
knowledge of sports to drive the long- term success and gain the strategic advantage (Jin,
& Cedrola, 2018).
 Other than this, company should keep focus over its newer offering along with it they
should also enhance the services to the customers and being more effective and efficient
with time and lastly, they should also consider the flexible supply chain and reduce the
dependence for the suppliers to generate more faster and successful results.
 Lastly, companies with the launching of new offering should focus over its marketing
strategies such as promotion, sales distribution, pricing strategies and their Human
resource practices in order to empower employees for the sustainable returns and success
of the organization.

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Conclusion
From the above report, we can conclude that Adidas is one of the well-known and the
well-earned and reputed company whose market share, target market and customers loyalty is at
its hike. These aspects help in understanding that what not all does the companies does to
maintain its brand image in the market in a long run. Other than this, adidas Australia is every
reputed in its sales, production aspect and financial aspects. However, there are certain an aspect
which makes them less, such as when we compare it with the other brands such as Nike, it is also
one of the famous company in same field but earn higher returns as compared to adidas. Further,
this report also highlights about the SWOT analysis of the Adidas Company and future
recommendations for the brand extension product line. In this, the company in future needs to
work over its innovative styles and methods, use more innovative and diversified techniques to
attract and retain customers and through this, they can earn more profits and reputation.
Lastly, Adidas Company should also focus over its ways for promoting its product in an
market. In addition, along with this, they should also concentrate over the services, which they
have to provide to the ultimate customers as customers gets more attracted towards the services,
which they avail for the company and this aspect, affects the customers retention or the
customers loyalty towards brand. Hence, this proves that when company before starting for
launching for its newer offering, they need to keep a check over diversification, promotional
tools, services which they will provide so that they can earn profits in long run and success
generation over years.

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References
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Brands on Customer Experiences. In International Conference on Intelligent
Technologies and Applications (pp. 205-215). Springer, Singapore.
Boeuf, B., Carrillat, F. A., & d’Astous, A. (2018). Interference effects in competitive
sponsorship clutter. Psychology & Marketing, 35(12), 968-979.
Chiu, W., & Choi, H. (2018). Consumers’ goal-directed behavior of purchasing sportswear
products online. Sport, Business and Management: An International Journal.
Craik, J. (2019). “Feeling premium”: Athleisure and the material transformation of
sportswear. Fashion and Materiality: Cultural Practices in Global Contexts, 214.
Good, M. (2017). Legal recognition of the human right to a healthy environment in Australia:
useful, redundant or dangerous, 160-174.
Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), 6478-6492.
Holtbrugge, D., & Schuster, T. (2017). The Internationalization Strategy of Adidas. The
Internationalization of Firms: Case Studies from the Nurnberg Metropolitan Region, 19.
Jin, B., & Cedrola, E. (2018). Product innovation: Core to continued success. In Product
Innovation in the Global Fashion Industry (pp. 1-33). Palgrave Pivot, New York.
KAL, O., & ABED ALGHANI, K. H. A. L. E. D. (2019). Changes and challenges promoted by
the social commerce in the sportswear industry. Evaluation of Nike and Adidas' cases.
Kalantari, H. D., & Johnson, L. (2018). Australian customer willingness to pay and wait for
mass-customised products. Asia Pacific Journal of Marketing and Logistics, 30(1), 106-
120.
Lagnese, M. (2017). How the adidas Group's Corporate Strategy Has Resulted In Growth and
Increased Profitability Within the Sportswear Industry.