Adidas PEST And SWOT Analysis (Essay Sample)

The paper's main focus is Adidas. It emphasizes the significance of globalization, environmental analysis, and the stakeholder concept in the business setting. Adidas' headquarters are in Germany. Adolf Dassler founded the company, and in 1924, he was joined by his brother Rudolf (Lewis, 2017). Dassler contributed to the development of spiked athletic shoes for various sports. To improve the state of spiked athletic footwear, he switched from heavy metal spikes to rubber and canvas. Dassler persuaded American athlete Jesse Owens to use his high-quality spikes at the 1996 Summer Olympics. Following a schism in the siblings' relationship, Adolf founded Adidas, and Rudolf founded Puma, which became Adidas' business competitor, in 1949. (Lewis, 2017). Adidas creates accessories, clothing, and footwear. Adidas is the world's second-largest sportswear manufacturer and the largest in Europe. The company's revenue in 2018 was estimated to be slightly more than twenty-one billion euros (Cheng, 2019). Adidas' trademark is the three stripes, which are used to promote the company's footwear and clothing lines (Lewis, 2017). The trademark, which Adidas purchased in 1952 from the Finnish games company Karhu Sports for the equivalent of two bottles of whiskey and one thousand six hundred euros, proved so successful that Dassler referred to Adidas as "the three stripes organization."
Question 1
The environment in which a company operates has an impact on its performance and operations. In the case of Adidas, various environmental factors contribute to its success while also posing a challenge at times. Environmental analysis is an important tool. It is a cycle that influences the company's exhibition by differentiating each of the internal and external components (Haseeb et al., 2019). The analysis entails surveying the level of opportunity or threat introduced by the elements. These analyses are then used to create dynamic interactions (Haseeb et al., 2019). The investigation tailors techniques to the company's current situation (Haseeb et al., 2019). Environmental Analysis is important because it can be used to evaluate current methodologies, set key goals, and figure out systems.
Adidas' global presence anticipates that it will maintain global production network methods and adhere to political methodology while collaborating on the web. Adidas' execution on the lookout is influenced by political flimsiness, distress, psychological warfare, and war (Zagel and Tarhonskyi, 2020). Political factors have caused Adidas to diversify into new business sectors while maintaining its presence in previously explored markets (Zagel and Tarhonskyi, 2020). The developments will cost the organizations money because the shipment of goods to these countries, such as Syria and other countries in political turmoil, will be halted.
Since its inception, Adidas has faced critical monetary changes to establish itself in the marketplace. Adidas encountered monetary midtown in the year 2000. In any case, financial factors such as expansion, per capita pay, joblessness, joblessness, and charges work against the organization's benefit because they increase the allowance for income (Jayawardhana, 2016). The rate of unemployment and its expansion hurt clients and are likely to reduce their purchasing power as well as the organization's capital expenditure.
From a social standpoint, the organization creates an exciting plan that people of all ages can use. The organization's plans and creation take into account age, religion, and way of life, and it has been one of the driving variables of success for the organization (Zagel and Tarhonskyi, 2020). The organization considers social factors when determining each individual's advancement and purchasing character. As a result, Adidas must engage in a variety of social activities to get its products to customers (Zagel and Tarhonskyi, 2020). However, Adidas has established itself as an organization that values innovation. It has implemented various frameworks or advancements, giving it a competitive advantage (Zagel and Tarhonskyi, 2020). Technology will help improve the quality of transportation administrations and create items that save energy, time, and effort (Zagel and Tarhonskyi, 2020). However, Adidas has not primarily used innovation to create products, such as intelligent balls. It has online stores where customers can purchase items.
The organization does not create any items that are confined and have the potential to harm the environment. Adidas' manufacturing strategy contributes to a reduction in the number of gases released into the atmosphere. Finally, Adidas is a patent holder, and as such, Adidas is responsible for the framework and protected innovation (Zagel and Tarhonskyi, 2020). The organization has an additional configuration patent to protect itself from copiers and encroachment. It also serves as insurance against the fraudulent business (Zagel and Tarhonskyi, 2020). Nonetheless, Adidas should be aware of export and import transactions so that it does not interfere with legitimate activities from other countries.
Question 2
Figure 1: Adidas Swot Analysis
Question 3
Adidas operates in a variety of business sectors around the world, making it a global endeavor. Globalization is the distribution of information, innovation, goods, and jobs across public boundaries and societies (Fernando, 2022). In financial terms, it represents a reliance on countries all over the world motivated by deregulation (Fernando, 2022). Globalization has various advantages and disadvantages for a business element. According to Adidas, globalization presents both challenges and opportunities. Globalization has resolved our regular daily existence today.
Nonetheless, given the COVID-19 infection and pandemic, it has received special attention. There is a lively debate about whether it is beneficial, regardless of whether it is required, and where it is heading (Hámori, 2021). The situation is complicated by the subordination of economic interests to egalitarian legislative concerns (Hámori, 2021). One of the benefits of globalization for Adidas is the expanded market, which allows for higher earnings. Simultaneously, globalization increases rivalry due to increased market access by various players from various countries (Hámori, 2021). Puma and Nike, as well as other smaller brands, are competing for a similar share of the overall industry (Hámori, 2021). Taking everything into account, the advantages outnumber the drawbacks because the utilization of innovation has additionally made it possible for clients to arrange merchandise from distant areas where Adidas stores are not set up.
Adidas CEO Kasper Rorsted told CNBC that the German activewear company would continue to invest in physical stores despite a surge in online sales during the Covid pandemic. Adidas reported a 51 percent increase in online sales in the second quarter compared to the same period last year (Stankiewicz, 2020). This followed a 93 percent increase in the following quarter, even though its public money unbiased income was down 34%. Adidas expects to generate multiple billion euros in online sales this year, up from around one billion euros four years ago, according to Rorsted (Stankiewicz, 2020).
The organization's growth will have an impact on the in-store shopping experience in the future, as well as help it gain access to the global market, assisting in the growth of its earnings (Stankiewicz, 2020). Adidas began an interaction to survey critical options for Reebok, including a reasonable offer for the brand it acquired in 2006. Rorsted told CNBC that the pandemic in no way justified Adidas' decision to reconsider its partnership with Reebok (Stankiewicz, 2020). Perhaps he fought that the health crisis has worked on the hidden necessities for the outdoor supplies industry, with more people embracing casual wear while telecommuting and participating in outdoor sporting exercises.