Industry Analysis of Adidas Australia: Marketing Report

This report provides a comprehensive industry analysis of Adidas Australia's footwear market. It begins with an executive summary outlining the report's objectives, which include assessing the organizational background, including goals, vision, product history, and core customer groups. The report then delves into a PESTEL analysis of the Australian footwear industry, examining political, economic, social, technological, environmental, and legal factors. It identifies direct and indirect competitors, analyzes their market share, and evaluates the overall state of the market. A SWOT analysis is conducted to pinpoint the strengths, weaknesses, opportunities, and threats relevant to the industry. Finally, the report offers recommendations for a new product line, leveraging the industry analysis to capitalize on opportunities and mitigate potential threats. The report also includes a detailed exploration of Adidas's mission, key goals, core values, and product history, as well as a discussion on the core customer groups for existing products. The competitive landscape is examined, with a focus on Adidas's primary competitors and their market shares. The analysis also incorporates the application of PESTEL to the industry, and offers recommendations for a new product line based on the industry analysis to exploit opportunities or address threats.

Running head: MARKETING
Swot & Pestle Analysis
Name of the Student:
Name of the University:
Author Note:

1: MARKETING
Executive Summary:
The aim of the report is to provide an overview of the footwear industry of Australia in
regard to Adidas. The report begins with identifying the organizational background by focusing
on the goals, vision, product history and the core group of customers. There is discussion about
the PESTEL analysis of the footwear industry. Further, the report also helps in the identification
of the direct and the indirect competitors along with determining the market share of competitors
and state of market place. The report also mentions a SWOT analysis of the footwear industry
thereby identifying the weakness that a new product line should overcome before entering the
market. There are also recommendations put forward for the new product line based on the
industry analysis so that the new product is able to exploit an opportunity or address a threat.

2: MARKETING
Table of Contents
Introduction:....................................................................................................................................3
a. Mission, Key Goals and Core Customer Group:.........................................................................3
Background of the Organization in Highlighting Core Business Structure, Mission and Product
History:.........................................................................................................................................3
b. PESTEL Analysis of the Australian Footwear Industry..............................................................7
c. Competitive Environment:.........................................................................................................10
d. SWOT Analysis of Footwear Industry in Australia..................................................................11
e. Recommendations for the New Product Line............................................................................13
Conclusion:....................................................................................................................................14
References:....................................................................................................................................15

3: MARKETING
Introduction:
The report aims at providing an insight into the footwear industry with special reference
to Adidas. Australia. It represented a multinational corporation with headquarters in
Herzogenaurach, Germany that manufactured and designed clothing, shoes and accessories
(adidas-group.com, 2019). It is one of the largest manufacturers of sportswear in Europe and
second largest across the world. Each year, the company produces more than 900 million
lifestyle and sports products with independent partners across the world. The revenue of Adidas
has been closer to € 21.95 billion which showed how large and multifaceted the organization has
been. The report commences with the identification of organizational background thereby
highlighting the core business structure, vision, goals, product history along with a discussion on
core group of customers. The report also provides an insight into the PESTEL analysis of the
footwear industry. The report also identifies the direct or the indirect competitors of the
organization with special focus on the market share of competitors and the state of the market
place. The report also puts across a SWOT analysis thereby highlighting the approach for
entering the market. The report also puts across two to three product recommendations based on
the industry analysis that would help in either exploiting an opportunity or addressing a threat in
Australian footwear industry.

4: MARKETING
a. Mission, Key Goals and Core Customer Group:
Background of the Organization in Highlighting Core Business Structure, Mission and
Product History:
During 1920, Adoph Dassler invented the spiked shoes for the track. Later on he and his
brother found a German sports shoe company Gebrüder Dassler which came to known as the
Adidas (adidas-group.com, 2019). The uniquely designed shoes made by Adoph Dassler for
1928 Olympics in Amsterdam gradually earned worldwide reputation. At the time of his death,
Dassler held close to 700 patents for his athletic equipment and the sports good. In the year 1978,
he had been inducted into the Hall of Fame of the American Sporting Goods Industry as the
founder of modern sports goods.
During the Second World War, Dazzler joined Nazi Party and ensured supply of shoes to
the Youth movement led by Hitler and the German athletes of 1936 Olympics. It was during the
war that Dassler utilized the Russian prisoners of the war to work in his factory in order to deal
with the shortage of labor (adidas-group.com, 2019). It was during the modern era of 1970s that
Adidas became one of the renowned shoe brands of United States. Adidas became the official
supplier for the Munich Olympics held in the year 1971. Although, the company remained a well
known and strong brand but its share in sports shoe remarkably reduced over years. This German
business is presently a corporation in combination with Salomon which is a French Global
Concern.
In the year 2004, Adidas took over the Valley Apparel Company which is a US company
holding license for over 140 athletic teams of the United States. In the year 2005, Adidas
purchased Reebok which is also an American shoemaker that allowed the company in competing

5: MARKETING
more directly in United States (adidas-group.com , 2019). Nevertheless, the headquarters of the
company is still located in of Herzogenaurach which is the hometown of Adoph Dassler and still
have ownership in the soccer club of Germany.
The mission statement of Adidas puts forward that “The Adidas Group strives to be the
global leader in the sporting goods industry with brands built on a passion for sports and a
sporting lifestyle (mission-statement.com, 2019). We are committed to continuously
strengthening our brands and products to improve our competitive position.”
The core values of the company include (www.adidas-group.com, 2019):
 Performance: As far as performance is concerned, sport remains the foundation of
the doings of the company along with executional excellence that acts as the core
value of the group.
 Passion: The Company remains passionate about the products and services
provided.
 Integrity: As far as integrity is concerned, the company remains ethical, honest,
fair and open.
 Diversity: The Company also encourages diversity.
As far as the products are concerned, Adidas sells wide variety of clothing item that
included jackets, shirts, pants, leggings and hoodies (adidas-group.com , 2019). The first apparel
item manufactured by Adidas has been Franz Beckenbauer tracksuit that was created in the year
1967. It is also one of the largest manufacturers of the sports bras in Europe and is the second
biggest manufacturer across the world. The company has been associated with manufacturing of
various products related different games which are mentioned as follows:

6: MARKETING
Football: The key focus of Adidas has been on the manufacture of the football kits and
the associated equipment. Nevertheless, Adidas remains a key company in global supply of the
team kits for the international association of the football clubs and teams.
Baseball: The Company also manufactured baseball equipment along with sponsoring
players for the Nippon Professional Baseball and Major Leaque Baseball in Japan.
Basketball: Between 2006 and 2017, Adidas acted as the outfitter of the 30 franchises in
National Basketball Association by replacing Reebok.
Cricket: Since the mid 1970s, Adidas have been responsible for manufacturing the
cricket footwear with the target market of Australia.
Golf: The Company is known for manufacturing golf footwear, clothing and accessories
along with the women’s and men’s equipment that included shirts, shorts, pants, outwear,
footwear, eye wear and base wear.
Gymnastics: From the year 2000 to 2012, Adidas has manufactured gymnastic wear for
men and women for the Team USA.
Lacrosse: In the year 2007, Adidas entered into the manufacturing of lacrosse equipment
along with sponsoring Adidas National Lacrosse Classic in the year July, 2008 for
underclassmen players belonging to the United States.
Running: Adidas manufactured various lifestyle and running shoes that included the
spring blade and the energy boost trainer.

7: MARKETING
Skateboarding: The Company manufactures specially made shoes for the purpose of
skateboarding that also included redesigning of the previous models. The brand is also known to
manufacture signature models for the riders of the team.
Tennis: Adidas also involved itself with the manufacture of the tennis equipment since
mid 1960s along with sponsoring various tennis players.
Kabaddi: The Company’s association with Kabaddi has portrayed the growth of sport in
last couple of years.
The core customer group for the existing products of Adidas comprised of the upper-
middle class and the upper social groups (adidas-group.com, 2019). In order to attain success
across the customer segments, Adidas realized strategies related to mass marketing or mass
production was not sufficient. It is only through the understanding and the identification of the
individual goals and motivation of the consumer for the sport and the buying habit would enable
them in the creation of the meaningful services, experiences and products that helped in building
brand loyalty and lasting impression.
b. PESTEL Analysis of the Australian Footwear Industry
These include:
Political Factors:
Australia has been a liberalized capitalist democracy. Here the state plays a key role in
interfering with economy by adopting various roles. This is because; it is the parliament that
undertakes decision on the important taxes for protecting the national economy or implements
protection law related to the environment for protecting the national heritage (Murray, 2017).

8: MARKETING
Considering the political factors, as far as the footwear industry is concerned, it has been
found that Adidas and Reebok have merged quite recently. Kotler et al. (2015) mentioned that
there has been presence of pressure groups and lobbying within the home market. Besides, there
have also been fewer sporting events except the cricket fixtures for attracting the customers.
Given the challenges the footwear industry has been able to do brisk business.
Economic Factors:
Australia has been considered as one of the largest economy of the world dominated
mostly by service sector (Butlin, 2013). Economic growth of Australia depends primarily on the
agricultural sector and mining.
In regard to this, it has been found that foot industry of Australia have 2.44 percent share
on the global trade with net worth of US$97.606 billion. There has been a growth of the middle
class and the growing power of the leading customers in looking for the branded shoes. Footwear
industry of specific brands also faces seasonality issues. Some of the footwear brands do not
have a target market for women and kids. The footwear industry of Australia has been dependent
on economic conditions.
Social Factors:
Australia represents a multicultural and diverse economy without any official religion.
Most people of Australia have been educated and have English as primary language.
In this regard as far as the footwear industry is concerned, it has been found that the
change in lifestyle, rising preference for brands and highly fashioned shoes have contributed to
the strengthening of demand for the shoes in the country. Besides, the increase in the population

9: MARKETING
coupled with the spending power acts as the vital power for boosting the size of the footwear
industry of Australia for next few years. The market for footwear has a valuation of USD 3.2
billion for the year 2017(Azizul & Jain, 2013).
Technological Factors:
The technological factors of Australia mostly include automation, research, technology,
developmental activity, technological initiatives and the technological change.
The technological factors in the footwear industry help the manufacturers in carrying the
bulk activities of production that results in cost and time saving during the process of
manufacturing. Advanced technologies like 3D printing, shoe knitting and material innovations
has been expected for bolstering the production of the footwear industry in forthcoming years
(Spahiu et al., 2016). The techniques of 3D printing are being used by the shoe manufacturers
for manufacturing different shoe designs for serving the customer needs.
Environmental Factors:
Environment has been a major concern in the recent years forcing most of the
manufacturing industries to adopt materials that have recyclable characteristics and causes less
pollution (Musa & Gasmelseed, 2013).
The footwear industry has been no different and hence they have mostly adopted
Polyester as the raw material for the manufacture of the knitted shoes due to the recyclable
characteristics of the material. The various brands have been adopting newer ways of
manufacturing shoes that took less time and led to minimum wastage (Rajan et al., 2016). In

10: MARKETING
March 2014, Adidas was the first in introducing a knitted soccer cleat. These shoes provided
both comfort and safety to the football players.
Legal Environment:
Australia has regulatory obligations for the business. The regulations have been designed
for ensuring integrity of the market, fair competition and the sufficient protection from the
relevant parties.
The legal environment has provided a positive boost to the footwear industry of
Australia.
c. Competitive Environment:
The direct competitors of Adidas in Australia are Nike and Puma. Adidas also faces
indirect competition from Mauritz AB, H & M Hennes, Kickstarter and PBC.
Nike which was established in the year 1969 has been one of key competitors of Adidas.
The company designed, manufactured, marketed and sold the apparel, sports footwear and the
related services and accessories (nike.com, 2019). The company has primarily been known for
product innovation and its superior quality. Nike held a lion share of close to 33 percent of
global market share. The company not only has production facilities in Asia but also has sales
facilities in close to 200 countries along with customer service and operational units across the
world. The pricing of the brand depends on the premium segment. The company also launched
the knitted neon shoes like the Mercurial and Magista cleats for gaining competitive advantage.
Puma also has a strong presence on the lifestyle and the fashion market with a huge
distribution network (us.puma.com, 2019). The company manufactures designs and distributes

11: MARKETING
sports and lifestyle products that are highly innovative. The company harness experience and
resources and possess ample knowledge in research and development. The pricing of the
company have been designed to remain competitive with the other shoe retailers. Similar to
Nike, its pricing depends on the premium segment of the customers. The brand valuation of the
company stands at $6.8 billion.
Figure 1: Revenue Figures of Adidas and its Competitors, Nike and Puma
Source: (statista.com, 2019)
Australia also has some retail domestic players which include Amart All Sports, Rebel
Sports, Target, Big W, Kmart, David Jones, Betts and Myer. Companies are resorting
acquisitions and mergers for increasing the product offering. The scenario of the market seems

12: MARKETING
extremely competitive with growing interest of the local players and the international brands that
enter into the market
d. SWOT Analysis of Footwear Industry in Australia
Strengths Weakness
1. Existence of adequate productive capacity
in the process of tanning
2. Easier availability in the export market
3. Friendlier policies of the government
4. Established linkage with the buyers of USA
and the European Union
1. Presence of environmental issues
2. Delay in the deliveries
3. Uneconomical size of the manufacturing
units
4. Lower availability of the quality footwear
components
5. Lower Brand Image
Opportunities Threats
1. Growth in the consciousness of the global
fashion
2. Growth in the domestic and the international
market
3. Usage of modern technology
4. Exhibiting strengths in the shoe
manufacturing
1. Presence of multinationals in the domestic
market
2. Tough competition from the other countries
3. Limited scope for the mobilization of the
funds through public issues and private
placement as most of the business have been
family owned.

13: MARKETING
As a future approach to enter the market, the new product in the offering should be able
to overcome the issues faced by the footwear industry. In order to overcome the environmental
issues, the new product should use eco friendly reusable products (ibisworld.com.au 2019). The
new product should develop widespread awareness but also have positive image. Besides, the
product should remain associated with high quality. The new product should capture a larger
fraction of the sales in luxury sportswear. The new product should have well developed network
for distribution. The product should also have an e commerce presence.
e. Recommendations for the New Product Line
1. The primary opportunity for the new product line of Adidas would be the growth in the
sportswear industry. Nowadays, people have become more fitness and health conscious with no
signs of slowing down. This implied that there would be a constant increase in number of people
practicing the sport thereby requiring the need for the appropriate sportswear. Technology is also
more advanced than before and every week there has been discovery of new materials with the
consumers looking forward towards building better products. The new product line is thus
recommended to use smarter materials through investment in the manufacture and the
development of the new materials so that it is able to deliver superior product to the competitors.
Besides, the new product could invest in development of newer and breathable fabrics for
ensuring additional comfort to the sportspeople during sums along with using various rubbers
and gums for improving reaction of the running shoes with every step.
2. As there is presence of various competitors so the new product line is bound to face
threat to competition. It has been found that there is hardly any difference in the qualities or

14: MARKETING
product lines of the various brands and hence the new product line of Adidas is recommended to
promote the brand image and also undertake celebrity endorsements.
3. It is recommended that the new product line from Adidas should also include non
athletic shoes including work footwear and casual shoes that would help in targeting different
segment of population. Besides, to promote the new product line the company should employ
various marketing campaigns via the different forms of the media for reaching a diverse
demographic. For its new product line the company should compete based on quality, comfort
and creation of the brand value of product.
Conclusion:
On a concluding note, it can be said that Adidas is a strong brand in the sporting world.
The powerful brand along with brilliant distribution of the infrastructure remains balanced
through only fewer weaknesses which include a narrower product line and limited endorsements
by celebrities. The report also portrays that based on the reactions of consumer; Adidas is the
market leader in sports and the apparel segments. Adidas has not only provided sponsorship to
the various sports events and soccer teams that have given the company an additional edge.
People however expect more from the company. Nike however chases the position of Adidas
aggressively thereby maintaining its position with newer staffs thereby becoming one of its
competitors.
The report also shows how footwear retailing industry has reached the matured stage of
economic cycle. The footwear industry of Australia has been marked by existence of the well
established players in market and has mostly been dependent on the spending patterns and the

15: MARKETING
economic conditions. The fierce competition has led to the creation of more options for buyers.
The report also shows how the technology is helping in carrying out the activities of the bulk
production. Thus, the competitors like Nike and Puma are constantly concentrating on the
offerings and the expansion of the product portfolio for surviving in the business environment.
The report also portrayed that the upsurge in the sports activities contributed to the sports shoes
in the Australian continent.
References:
adidas-group.com , (2019). Retrieved from https://www.adidas-group.com/en/group/profile/
adidas-group.com , (2019). Retrieved from https://www.adidas-group.com/en/group/culture/
adidas-group.com , (2019). Retrieved from https://www.adidas-group.com/en/group/strategy-
overview/
adidas-group.com , (2019). Retrieved from https://www.adidas-group.com/en/brands/adidas/
adidas-group.com, (2019). Retrieved from
https://www.adidas-group.com/en/sustainability/products/sustainability-innovation/
adidas-group.com, (2019). Retrieved from https://www.adidas-group.com/en/group/history/
adidas-group.com, (2019). Retrieved from https://www.adidas-group.com/en/group/history/
Azizul Islam, M., & Jain, A. (2013). Workplace human rights reporting: a study of Australian
garment and retail companies. Australian accounting review, 23(2), 102-116.
Banks, J.A., (2015). Cultural diversity and education. Routledge.

16: MARKETING
Butlin, N.G.,( 2013). Investment in Australian economic development, 1861-1900. Cambridge
University Press.
ibisworld.com.au, (2019). Retrieved from https://www.ibisworld.com.au/industry-trends/market-
research-reports/retail-trade/other-store-based-retailing/footwear-retailing.html
Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015). Marketing. Pearson
Higher Education AU.
Metcalfe, S. ed., (2018). Evolutionary theories of economic and technological change: present
status and future prospects(Vol. 44). Routledge.
mission-statement.com, (2019). Retrieved from http://mission-statement.com/adidas/
Murray, G., (2017). Capitalist networks and social power in Australia and New Zealand.
Routledge.
Musa, A. E., & Gasmelseed, G. A. (2013). Eco-friendly vegetable combination tanning system
for production of hair-on shoe upper leather. Journal of Forest Products &
Industries, 2(1), 5-12.
nike.com , (2019). Retrieved from https://www.nike.com/au/
Rajan, T. P., Souza, L. D., Ramakrishnan, G., & Zakriya, G. M. (2016). Comfort properties of
functional warp-knitted polyester spacer fabrics for shoe insole applications. Journal of
Industrial Textiles, 45(6), 1239-1251.

17: MARKETING
Spahiu, T., Grimmelsmann, N., Ehrmann, A., Shehi, E., & Piperi, E. (2016, November). On the
possible use of 3D printing for clothing and shoe manufacture. In Proc. 7th Int. Conf.
Text., Tirana, Albania.
statista.com , (2019). Retrieved from https://www.statista.com/statistics/269599/net-sales-of-
adidas-and-puma-worldwide/
us.puma.com , (2019). Retrieved from https://us.puma.com/
www.adidas-group.com/, (2019). Retrieved from
https://www.adidas-group.com/media/filer_public/2013/07/31/adidas_gb_2012_en_bookl
et_en.pdf