Business and Business Environment: Adidas Analysis Report

This report provides a comprehensive analysis of Adidas, a prominent player in the global sports industry. It begins with an introduction to the company and its position in the market. The core of the report delves into various analytical frameworks, including the 5 Forces model to assess competitive pressures, and a PESTEL analysis to examine the political, economic, social, technological, environmental, and legal factors influencing Adidas. The report further explores Adidas's core values, vision, and mission, providing insights into the company's guiding principles and strategic direction. It also examines the organizational structure, human resources, brand equity, financial factors, market resources, and technological advancements. The analysis extends to Adidas's marketing campaigns and concludes with SWOT and TOWS analyses, comparing Adidas to Nike and identifying strategic recommendations. The report offers a detailed understanding of Adidas's internal and external environment, enabling a comprehensive assessment of its strengths, weaknesses, opportunities, and threats.

ASSIGNMENT 2 FRONT SHEET
Qualification BTEC Level 4 HND Diploma in Business
Unit number and title Unit 1: Business and Business Environment
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Re-submission Date Date Received 2nd submission
Student Name Le Hoang Long Student ID GBD 1837
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2.2

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Table of Contents
Introduce:................................................................................................................................................................ 1
Body: ...................................................................................................................................................................... 1
I. 5 force model of Adidas:....................................................................................................................................... 1
II. PESTEL analysis of Adidas: ................................................................................................................................... 3
III. Core value of Adidas: .......................................................................................................................................... 4
IV. Mission or Vision of Adidas: ............................................................................................................................... 5
V. Organizational structure of Adidas: ..................................................................................................................... 6
VI. Human resource:................................................................................................................................................ 7
VII. Brand name and brand equity of Adidas: ........................................................................................................... 7
VIII. Financial factors and physical assets: ................................................................................................................ 8
IX. Market resource: ................................................................................................................................................ 8
X. Technology base of Adidas: ................................................................................................................................. 9
XI. Adidas immortal campaign ................................................................................................................................. 9
XII. SWOT and TOWS of Adidas: ............................................................................................................................ 10
Compare SWOT of Adidas and Nike ..................................................................................................................... 10
TOWS of Adidas: ................................................................................................................................................. 11
Conclusion: ........................................................................................................................................................... 12
Bibliography .......................................................................................................................................................... 13

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Introduce:
In today's growing sports industry, Adidas needs to identify the strengths and weaknesses of external
macro factors and from there find out solutions to handle those problems and grow Adidas’s business.
In this assignment, we will analyze the impact of external factors on Adidas because Adidas is a well-
known sports company in the world and has many competitors, so Adidas needs to pay attention and focus
on addressing external factors to attract more investors.
Body:
I. 5 force model of Adidas:
The Five Competitive Forces model is a model that identifies and analyzes five competitive forces across
all industries and helps identify industry weaknesses and strengths. As a result, businesses can assess the
status and competitiveness of the company in the market.
(Jurevicius, 2013)
1. Pressure comes from direct competitors:
In the sports market in the world today, Adidas is under a lot of pressure from many competitors in the
sports shoes segment such as Puma, Nike, and McQueen. But Adidas' most powerful competitor and
direct competitor is Nike. They compete with each other in each market share and in different segments.
They compete with each other from design market share, brand reps, designers and more. Therefore,

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Adidas' mission is to find information, analyze and assess the future purpose, evaluate the potential and
current strategies of current competitors, especially Nike to have a basis assess Adidas competitiveness in
the market to build a competitive strategy appropriate to the general environment. (Quang, 2017)
2. Pressure comes from customers:
The pressure from customers is quite large pressure on Adidas. Because businesses must meet the needs,
wants and preferences of customers. Adidas customers are mostly young customers under 45 years old,
customers playing sports, people with average and high average income in society. Because Adidas' target
customers are young customers who love sports and fashion, the product requirements are also very high.
These customers want beautiful, fashionable, quality, affordable products that are suitable for the age,
suitable for youthful and dynamic styles and can be used in a variety of environments and situations.
Particularly for young customers and fashion lovers also want to have a variety of products, sizes and
suitable for many types of subjects. In addition, customers also want to apply new technologies to Adidas
products to develop products and better meet customer needs. And if meeting the requirements of these
customers, the business will have great loyalty and support from customers. (Quang, 2017)
3. Pressure comes from alternative products and services:
Regarding the pressure of competition from alternative products, Adidas has also relatively prepared to
solve this problem. Because today's sandals are easily replaced by customers to serve their own purposes.
But for the footwear industry today it is very difficult to create such a product. Therefore, businesses
should have solutions to create products that have many features and are suitable in many different cases
to attract customers. (Quang, 2017)
4. Pressure comes from potential competitors:
The competitive pressure of potential competitors is an issue that makes businesses also have to find
solutions to compete with these competitors. For Adidas, the problem of competing with this new
potential competitor is not so important because at present, the capital to open a business is very high so
almost no one can afford to start a new business. Another factor is that this sports environment is almost
saturated and it is very difficult for new businesses to have exclusive products to compete with today's big
brands, typically Adidas. (Quang, 2017)
5. Pressure comes from the supplier:
Supplier pressure is also quite important for businesses in general and for Adidas in particular. Suppliers
can be seen as a threatening pressure on Adidas because suppliers have the ability to increase input prices
or reduce the quality of products and services they provide, do not meet requirements the quantity and
timing of the business directly affects Adidas' operations. Today, PouChen is Adidas' largest supplier of
goods. Most of the materials of Adidas are imported from PouChen and Adidas depends heavily on this
business. PouChen can put quite a lot of pressure on Adidas, which can cause adversity and obstacles for

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Adidas. Therefore, analyzing and getting to know other suppliers is an important and necessary issue for
Adidas to be able to reduce the pressure on the business and be able to operate better. (Quang, 2017)
II. PESTEL analysis of Adidas:
1. POLITICAL FACTORS:
Adidas supplies, ships, and distributes their products worldwide. This requires them to extend
international supply chains and follow political procedures when selling products online. The company
also uses political forces as a method of intervention of counterfeit products. Each country abides by their
own taxation system and Adidas is required to abide by these rules for each sale and each product
distributed overseas. The company tends to outsource the development of their product to third world
countries because it reduces manufacturing costs. But communities do not condone this type of business.
Additionally, Adidas must follow these laws:
- International trade agreements
- Product safety laws
- Labor laws
- Consumer safety product regulations (Frue, 2017)
2. ECONOMIC FACTORS:
The sports good industry is concentrated. The 50 largest companies contribute to roughly 70% of the
industry’s revenue. Adidas is one of these organizations. The global economy fluctuates so manufacturers
shift to accommodate this. Adidas must research where to sell and distribute products. This ensures
company growth and opportunities. (Frue, 2017)
Adidas manufactures products in China because the cost to pay its employees is relatively low. Especially
compared to North American countries, Adidas has to make smart choices with the price of materials. But
they always face constant challenges when importing / exporting goods and the rise of counterfeit
products reduces Adidas sales. (Frue, 2017)
3. SOCIAL FACTORS:
Adidas changes designs of their products. Designs match the interest of consumers. Products are often
available for any age, gender or lifestyle but their core focus groups are health-conscious buyers with a
love for sports. They must keep up with health trends and preferences to cater to their customer. Adidas
also offer corporate volunteer programs and support communities and foster the health of their customer.
Adidas also supports the Olympics, which allows them to leverage marketing opportunities and catch the
eye of new audiences around the world. (Frue, 2017)

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4. TECHNOLOGICAL FACTORS:
Adidas tests their products under varying conditions because they cater to athletes. Adidas trying to
optimize performance for coaches and professionals in the sports industry. For durable solutions to athletic
problems, they use natural material replacements.
They support online sales through their website and with social media. Now, they’re studying the smart
sportswear industry is quite popular in social. Adidas can use these technological advancements to dive
into new industries and develop an edge over the competition. (Frue, 2017)
5. ENVIRONMENTAL FACTORS:
Adidas wants to reduce to the environmental impact. So Adidas duty to monitor hazardous substances and
eliminate them. This may be why Adidas offer natural materials in their products.
They follow ethical business practices by committing to ensure supplies are following regulations in every
country their products are manufactured in. (Frue, 2017)
6. LEGAL FACTORS:
Adidas has intellectual property rights and IP system. They also have design patents, protecting their
rights against infringement by other businesses. The patents also serve as legal protections to stop fake
businesses and as a large company, they have their own manufacturing brands.
Because if connected to the sports world, Adidas advocates sponsoring celebrities as a form of marketing.
And fully comply with national and local laws. (Frue, 2017)
III. Core value of Adidas:
Adidas’s core values comprise “performance, passion, integrity, and diversity.” These have been a part of
their approach for decades, and the German-based company continues to use them as a point of reference
for their most important and long-term decisions.
Since Adidas is focused on innovation, they do want to have the best apparel and gear for performance.
That’s why the company hires some of the best engineers and clothing professionals to continually boost
results and competitiveness for all their sportswear and accessories.
The company is also hiring people that are deeply passionate about sports and can see that in all the results
that the company is providing all the time. They are also maintaining a sense of integrity and reliability,
and they are highly focused on diversity too. They believe everyone has the right to wear fabulous clothes,

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and it can become something staggering and powerful all the time. Adidas has always maintained these
core values, and it continues to expand on them all the time. (Sorbello, 2019)
IV. Mission or Vision of Adidas:
Vision:
- Adidas' vision statement is a design leader focused on making the best of athletes with guaranteed
performance products in the global sports market.
- The business seems to concentrate heavily on development and is inspired at the same time by the idea
of bringing something new, innovative, but at the same time engaging and rewarding.
- The business itself also seems to be fully focused on professional athletes and those who are continually
breaking the boundaries to produce resounding results and the best experience you can find there.
- Nonetheless, because of their comfort and longevity, one of the main reasons Adidas items are ranked
top. Adidas goods are so common among the main reasons because of their comfort and durability.
- These products are made to last, and the company has a vision to deliver durable, professional
sportswear to everyone. They do not discriminate; instead, they provide a set of high quality solutions that
are suitable for everyone out there. (Sorbello, 2019)
Mission:
- The mission statement of Adidas is that the Adidas Group strives to become the world leader in the field
of sports goods with brands built on a passion for sports and sports lifestyle. Adidas committed to
continuously strengthening our brands and products to improve our competitive position.
- Throughout the years, Adidas’s mission statement has evolved to reflect the changes that happened in the
industry.
- The company wants to show people that having a sporty lifestyle is exceptional, and they want
to encourage people to work out and express themselves. Their products are very innovative, and they
work hard to improve performance at the highest possible level.
- One of the main targets for Adidas Mission Statement is improving sports. They have a sports-focused
culture, and they target both men and women here. They are also engaged in various sponsorship
programs designed to support the young talent and bring them the right quality and value that they would
find on the market.
- Also, another core focus for Adidas Mission Statement is the idea of surpassing expectations. The
company has invested a lot of time and money to design an infrastructure-focused solely on value,

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professionalism, and quality. They also have a sustainable roadmap that that’s about protecting the
environment while also pursuing innovation at the highest possible level.
- Adidas is also a highly creative and innovative company. They always strive to push the boundaries.
Their goal is to provide their customers with the best solutions on the market regardless of the case. The
real focus for them is to understand the needs of customers so that they can solve and surpass their clients’
expectations as much as possible effectively. It’s an incredible opportunity and something that pays off a
lot more than you might imagine. Adidas is also known for the fact that it continually listens to customers.
They created numerous innovative sportswear products, and they have a stellar research team. Research
and creativity are at the core of the company’s mission.
- Adidas has created charitable activities for poor children, doing social activities, creating better products
for customers. Adidas products are durable, beautiful, reasonably priced, and very convenient to combine
travel, sports or other activities. (Sorbello, 2019)
V. Organizational structure of Adidas:

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Source: (Eva, 2017)
Adidas divisions and departments are organized in a very logical and coherent manner, there is always a
close link between the parts to get the best done. At the top is the CEO of the company, under the CEO
there are divisions such as the vice president of finance that specializes in money and calculating expenses
for the company, the vice president of marketing specializing in advertising marketing and sales, vice
president HR. There are also product-specific departments such as project vice president specializing in
product projects sold in the future, career vice president, production vice president specializing in
researching products to attractive customer. Under the vice presidents, there will be smaller human
resources managers to be in charge and ensure the work progress in the best direction. This is a rather
detailed, coherent and interconnected mechanism. However, there are still some problems that the
company's apparatus needs to be overcome: this apparatus is quite a lot of employees, so it is sometimes a
bit detrimental for the company to pay. However, this is still a very good working machine of Adidas.
VI. Human resource:
Adidas is a major company in the world of sports. Therefore, human resources for this company must also
be plentiful and professional in order to complete the work in the best way. Adidas has more than 57,000
employees, of which 51% are male employees and 49% are female employees, with an average age of
about 31 years old and about 33% of Adidas female employees as managers in the company. Adidas is
also very concerned about employee development, and Adidas employees are regularly trained and trained
to help them develop their skills. In addition, Adidas also has policies to increase salaries and bonuses for
employees when they work well and have high efficiency.
VII. Brand name and brand equity of Adidas:
The name Adidas is an abbreviation of the name of founder Adolf (“Adi”) Dassler.
In 2015, the brand equity of sportswear manufacturer Adidas increased by 30 percent to 5.1 billion euros.
This is according to a study by “The Brand Ticker” and “Spirit for Brands”, conducted for the industry
magazine Horizon.
Following weak results in 2014, during which Adidas, and the CEO Herbet Hainer especially, were
heavily criticized, the company has bounced back.
Sales record in China:
“One of the reasons for this turnaround is the breakthrough into the Chinese market, where Adidas has
played a big role”, Walter Brecht, the Managing Director of “Spirit for Brands”, explains to Horizon. In
2015, Adidas set a sales record of over two billion euros in the People’s Republic. (Business, 2016)

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VIII. Financial factors and physical assets:
Source: (Investing, 2019)
Adidas is a large company in the world with a large scale. The number of Adidas assets is very large, the
total assets of Adidas in September 2018 is more than 210000€ billion. Total debt repayment is about
13000€ billion and equity is over 7000€ billion. The number of employees at Adidas is also very large,
about 57,000 employees and the salary to pay employees is also very high. Besides, Adidas' stock price is
not growing fast but it is quite stable. This is a good investment research opportunity for investors who
want to learn and invest in the company for long-term business. For investors who want long-term and
stable business, Adidas is an ideal company for entrepreneurs and investors. In particular, this company is
always trying to develop, accompanied by increasing value and especially the value of stocks also
increased very quickly. The scope of Adidas operation is worldwide, so the operation of Adidas is quite
convenient and easy to develop well. So if you want to invest in business, Adidas is a good choice.
IX. Market resource:
Adidas' target market falls in the age group of 20 to 29 years of age, including athletes, including those at
the highest level of the sport, as well as non-athletes be inspired or really love sports. And the company is
focusing on its goal and reinforcing its brand with the next generation of athletes in the age group of 14 to

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19 years old because Adidas believes that this target group is the most influential consumer group in the
world. (heartofcodes, 2019)
X. Technology base of Adidas:
When mentioning Adidas, it cannot mention the company's "Boost" technology, just like Nike's Air
technology, "Boost" has been associated with Adidas in recent years. With 2,500 "Energy" compression
beads in each sole, the design style and color are fashionable and attract customers so Adidas soon
received positive customer feedback. This "Boost" technology helps the users be able to return the energy
well, the advantages of "Boost" are soft, light, and comfortable to be able to exercise all day without ever
seeing foot pain. It didn't take too long for "Boost" to prove its strength. Up to now, Adidas has applied
"Boost" technology to almost all the hottest products and models such as Ultra Boost 4.0 and Yeezy
350v2. (HYSTORE, 2018)
Based on the above analysis, we can see the strengths and weaknesses of the company such as:
Strength:
- Products are diverse in design, color and trendy
- Suitable for many ages and customers' purposes
- Apply modern technology to the product
- Having abundant and quality human resources
- There is a large capital and market
Weakness:
- Product price is still a bit high
- In recent years, there are not many new products
XI. Adidas immortal campaign
Material innovation is a way for Adidas and its main rival Nike to reach customers in a more sustainable
way thanks to the buzz programs. But in the last two years, Adidas has been able to prevail because of the
solutions to increase the use of recycled plastic for its high-end products.
"Humans use 200 million tons of plastic every year, and 10% of which will stay on the ocean floor after
the end of their short lives. So one of the long-term goals of we are creating an endless cycle of materials,
to make every part of Adidas immortal. That's the sustainability we look forward to, "Carnes said.