Adidas Business Analysis: SWOT, PESTLE, and Stakeholder Analysis

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Final Project - Research & Analysis Paper – Part II
ADIDAS

SUMMARY
Adidas is one of the most popular sports brands of the world and is now facing tough
competition in the markets because of the similar products by other brands so there is a need to
amend some changes in the organization and make the best possible results. The report
mentioned below completely based on the case of Adidas which initially described the strengths
and weaknesses of the company to determine their core values and their current position in the
markets while with these, the solutions that can be taken in order to remove the weaknesses has
been shown. Afterward, the environmental constraints of the Adidas are determined in which it
has been found that most of the factors support the business but there are few that hinders or are
shortcomings of the business that has to be dealt with at present and in future.
Afterward, the assignment report has described the stakeholders of the business and focused on
one particular group which is vital for any business. Moreover, the report has focused on the
organizational structure and the motivation theories that can be utilized in order to make the
employees more dedicated and passionate towards their work and hence make the company at
the top again. At last, some recommendations have been provided that can be utilized by Adidas
for the future.
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Contents
SUMMARY.....................................................................................................................................1
S.W.O.T...........................................................................................................................................3
STRENGTHS..............................................................................................................................3
WEAKNESSES...........................................................................................................................3
OPPORTUNITIES......................................................................................................................3
THREATS...................................................................................................................................4
ENVIRONMENTAL CONSTRAINTS..........................................................................................4
PESTLE ANALYSIS..................................................................................................................4
STAKEHOLDERS..........................................................................................................................5
ORGANISATIONAL STRUCTURE AND DESIGN....................................................................6
MOTIVATING EMPLOYEES.......................................................................................................6
RECOMMENDATIONS.................................................................................................................7
REFERENCES................................................................................................................................9
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S.W.O.T.
STRENGTHS
 Second largest sports manufacturer working since 1995
 A popular brand image with several volunteering activities by the organization
 Over 150 subsidiaries working globally with Adidas (Adidas Group, 2019)
 A very fast supply chain
These strengths can be utilized in making the brand more popular again and gain top value for
Adidas and even for Rebook. The company can also use its subsidiaries to enhance their
production systems and serve accordingly. At last, its effective supply chain mechanism can help
them in gaining a better position among the customers in the markets.
WEAKNESSES
 Unable to manage the acquisition of Rebook which reduced the value of both brands
significantly
 Financially unstable
 Still using its manpower to produce high-quality products which can be easily made
through technological resources
These aforementioned weaknesses of the company can be reduced with the help of effective
leadership and management qualities, plan some strategic options for marketing, sales and
facilitate best in class customer services. In addition to this, providing discounts can attract
customers rather than by degrading the quality in most of the countries like USA, UK, India, etc.
OPPORTUNITIES
 By using its frequent introduced technologies like MiCoach (for training) (Porta, et al.,
2012)
 Develop some additional sports gadgets that can help in maintaining health
 Opportunities in intensifying its exchange activities (Adidas Group, 2019)
Adidas has the potential to serve people more effectively and reach the top position in markets
with its wide variety of products. In addition to this, the company can use their newly designed
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sports gadgets for attracting a new range of customers and attain better results with business
sustainability.
THREATS
 High competition in markets from companies like Nike, Puma, Asics
 Low-quality products which reduced the value of the brand
These threats of Adidas can be resolved by implying some strategic options like developing
better strategies at first place, rather than taking instant decisions without getting a detailed
report about the consequences that might happen
ENVIRONMENTAL CONSTRAINTS
PESTLE ANALYSIS
Political – the companies like Adidas basically does not get affected by political scenario but just
the legal regulations that have to be compiled by the companies
Economical – financial stabilities of the countries as well as of the people directly affect the sales
and profits of the companies (Adidas & Product differentiation, 2018)
Social – no impacts from the social aspect of the business
Technological – Adidas somehow lacks in using the best possible and latest technology and
hence this is a major constraint for Adidas (Piller, et al., 2012)
Legal – factors like import and export laws basically affects them since they increase and
decreases their costing of the products
Environmental – there are no concerns related to the environment because of effective waste
management practices, CSR activities, etc.
So, it can be said that the technology and economic situations majorly affects the business of
Adidas as the company has faced financial issues in 2007-2008 and after acquisition of Rebook,
while in terms of bad effects from technology, the advent of new products by companies like
Nike, Asics, Under Armour has made it tough for Adidas to keep it up with the sales rate (Adidas
& Product differentiation, 2018). These challenges are now focused on the management tasks
and hence they are trying to get rid of them as soon as possible. At the same time, environmental
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constraints create some opportunities for dynamic firms like Adidas in order to enhance their
strengths and work on their shortcomings. They have a leadership vision, effective management,
resources and brand name in markets that can help them in making the best possible results in the
future for the welfare of the business.
STAKEHOLDERS
Adidas, like all general organizations, have the stakeholders like their staff members, society,
government, investors, management, customers, etc. Each of these stakeholders has a vital
position and role in the growth and success of companies like Adidas. In terms of staff members
or employees of the organization, they are important as they are the one who works on the
decisions of the management in order to achieve the targets and goals. They are also important as
they are the support system for any company (Piller, et al., 2012). While in terms of government
and society, they have an upper value for every firm because their support can make a company
most powerful in markets and hence companies can do whatever it takes to make them satisfied.
Talking about the customers, they are one of the key aspects of a business unit who uses the
offerings of the company and hence their feedback will decide their satisfaction level and actual
competencies and potential of the company.
So, from my perspective, it can be said that customers are an important area (stakeholders) of the
business of Adidas since from past few years company is facing high attrition rate of its loyal
customers who are going towards new brands. So, the company should manage them in
accordance to achieve their business desires and earn some better profits that can help in creating
motivation among the management and employees (Mahdi, et al., 2015).
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ORGANISATIONAL STRUCTURE AND DESIGN
Above mentioned are the organizational chart of Adidas where the head of the flow is executive
board under CEO and supervisory board while the next level is of the Finance, Marketing and
HR departments in which the normal employees work according to the needs and promoted
positions given to them. The information flow is one from top to bottom with fluent
communication methods. Since the dynamics are changing and there is a need to amend the best
possible changes for the high satisfaction level of the customers, they can even modify their
organizational structure to easier horizontal one as this makes the things clear to everyone at one
stance and time can also be saved (Mahdi, et al., 2015). In addition to this, the relationships
within the business will also get enhanced through this.
MOTIVATING EMPLOYEES
There are several motivation theories that can be utilized in order to make the best results from
the employees and motivate them. Some of the best motivational theories that can be utilized by
Adidas in order to motivate their employees are:
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Marlow’s hierarchy of needs – this theory deals with the different requirements of life of a
normal person which involves the aspects like physiological, safety and security, belongings,
esteem, and self-actualization, etc. the theory is very helpful in motivating people according to
their requirements in these mentioned aspects in theory. A person gets happy when he/she gets
the result for what they work on and hence this can also be helpful in Adidas's to enhance the
motivation level of employees.
McClelland’s theory – humans acquire, learn and get motivators on their own that can be used
for the achievements or success in life. The theory suggests the three motivators as achievement,
affiliation, and power which combinedly creates a positive mindset for the person and hence
enhances motivation and dedication among them.
These both theories can be applied with the help and support of the leaders and managers within
their workplaces in order to gain some additional benefits. These theories can be involved to
motivate employees through using them in training of people, practical tasks, etc. so that they
can be kept motivated until the achievement of a plan (Dobre, 2013).
RECOMMENDATIONS
Companies like Adidas have a variety of strengths and opportunities in their operating markets
but with the challenges found above like increased competition level in markets, issues with
technological and financial aspects for the company, etc. Some of the best possible solutions or
the recommendations to Adidas can be:
 They can impose better leadership and management techniques that can resolve the
concerns from within internally by applying appropriate leadership and management
techniques (Filizöz & Fişne, 2011)
 Adidas also have the opportunity to enhance its product portfolio in cost-effective range
for the people like India where they want high quality at low rates and attract the large
group of members
 They can also involve some effective technological platforms for faster production of the
products that can also help in overcoming from their challenges (Dickson & Fuss, 2011).
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 Based on the paper, it can be said that the company must use its strengths of having a
long experience, they can create some unique value and selling points for the customers
that can help them in enhancing their profits and success rate
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REFERENCES
Adidas & Product differentiation, (2018), online available at
http://allaboutadidas101.blogspot.com/2017/10/adidas-product-differentiation.html last accessed
on 5th April 2019.
Adidas Group, (2019). STRATEGY, online available at
https://www.adidas-group.com/en/group/strategy-overview/ last accessed on 5th April 2019.
Dickson, M. J., & Fuss, F. K. (2011). Effect of acceleration on optimization of Adidas Bounce
shoes. Procedia Engineering, 13, 107-112.
Dobre, O. I. (2013). Employee motivation and organizational performance. Review of applied
socio-economic research, 5(1).
Filizöz, B., & Fişne, M. (2011). Corporate social responsibility: a study of striking corporate
social responsibility practices in sport management. Procedia-Social and Behavioral Sciences,
24, 1405-1417.
Mahdi, A., Abbas, M., Mazar, T. I., & George, S. A. (2015). A Comparative Analysis of
Strategies and Business Models of Nike, Inc. and Adidas Group with special reference to
Competitive Advantage in the context of a Dynamic and Competitive Environment. International
Journal of Business Management and Economic Research, 6(3), 167-177.
Piller, F. T., Lindgens, E., & Steiner, F. (2012). Mass customization at Adidas: Three strategic
capabilities to implement mass customization. Available at SSRN 1994981.
Porta, J. P., Acosta, D. J., Lehker, A. N., Miller, S. T., Tomaka, J., & King, G. A. (2012).
Validating the adidas miCoach for estimating pace, distance, and energy expenditure during
outdoor over-ground exercise accelerometer. In International Journal of Exercise Science:
Conference Proceedings (Vol. 2, No. 4, p. 23).
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