Background of Adidas

Adidas, the German sports shoes and footwear and sporting goods maker was founded by Adolf “Adi” Dassler. It was
the largest sportswear maker in Europe in the early 21st century and the second largest in the world.

Traditionally, Adidas products are labelled with a three-stripe logo that remains a feature of the current "trefoil" and
"mountain" logos of the brand. The name Adidas is an abbreviation of the name of founder Adolf Dassler ("Adi").

Company Adidas Group

Industry Sports Apparel, Footwear
CEO Kasper Bo Rorsted
Founded 1924
Location Bavaria, Germany
Revenue US$ 62.12B (February 2020)

Development Timeline of Adidas

The 1950s: When the 3-Stripes became official in 1949, the '50s became a development boom, with advances to fit
athletes of world renown. Adidas created the Samba, which soccer players still use today for agility and pace on the
street indoor soccer field and style.

The 1980s: Adidas made improvements, by adding new technology to all manner of shoes for athletes. The Micro
pacer introduced digital fitness monitoring to run with a screen on the shoe's tongue calculating distance, average
velocity, and calorie intake.

The 1990s: Adidas created an iconic teal and white EQT Volunteer Jacket for the Boston Marathon. This track jacket
marked a new age for Adidas, featuring the new EQT 3-Stripes logo which later developed into the recognizable
Sport badge today.

2010: Adidas has joined forces with Parley, an ocean conservation organization to create recycled ocean plastic
shoes and clothes. This started a push to end the wasteful fashion loop by reusing plastic and litter that already
contaminates the earth.

Why Use SWOT Analysis for Adidas?

The Adidas SWOT analysis shows the key problems that the company wants to tackle to improve its
performance. The goal of the organization is to become the world leader in its field. To achieve this goal,
Adidas' strategic planning process must include the issues in its SWOT analysis.

Adidas SWOT Analysis

Strengths

Brand Value: Adidas is one of the sports brands of greatest value. It ranks in the third position with a brand value of
$6.8 trillion, according to Forbes.

An Iconic Brand with a Prestigious Legacy: Over its long, illustrious history, Adidas has nurtured a strong and
prestigious legacy and heritage through influencing and shaping numerous aspects of society around the world.

Innovation for New Products: Adidas has prioritized the quality of its products over everything else since its
inception. Innovative, high-quality goods are one of the driving factors behind its ever-growing consumer base.

Diversified Portfolio: While the Adidas brand is restricted to the sportswear market, the products of the business are
diversified. It provides various items designed to cater to a wide variety of sports from clothing, apparel, and
accessories to hardware.
Weakness

Supply Chain Shortage: Adidas outsources most of its goods to third-party or independent production
manufacturers, mainly in China, Cambodia, and Vietnam. This has put Adidas at risk of being overdependent on
global suppliers.

Expensive Products: Adidas sells its goods at a premium or high price, which has marginalized low-income
customers.

Small Product Line: Adidas Group has under its portfolio only the Adidas brand and the Reebok brand, which has
limited the group in terms of sports clothing, sports apparel, and accessories.

Growing operating expenses: Adidas's operating expenses have also kept growing with rising raw material and labor
costs. Adidas' income has been growing but along with it, the operating expenses have also increased.

Opportunities

E-commerce: The number of customers shopping online or using e-commerce sites has significantly increased in
recent years. Adidas has integrated the checkout feature of Instagram into its distribution network, resulting in a 40
percent spike in online revenue in the first quarter of 2019.

Growing Sportswear Industry: Sports and fitness have increased in popularity, with no sign of slowing down soon,
ensuring that demand for sportswear items and assortments will increase steadily.

Investing in Smart Materials: Technological developments have allowed new synthetic materials to be created that
are better and more effective than conventional materials.

Growing Demand for Premium Sports Goods: Improved economic situation has raised buying power and demand
for luxury products in developing countries.

Threats

Competition: The biggest challenge Adidas faces is intensified competition due to globalization and technological
developments, which has enabled small and medium-sized businesses to enter and penetrate.

Supplier Dominance: The fact that Adidas outsources much of its product production means that the manufacturers
have more negotiating power than the business.

Loss of Trademark: In 2019 Adidas lost the tri-strip logo trademark case in the European Union's General Court,
exposing the company to the possibility of imitation.

Fake Products: Over the recent past, the number and quality of fake goods for luxury shoe brands have risen
dramatically, posing a challenge to the shoe manufacturing companies.

Recommendations

To achieve its aim of dominating the market and becoming the #1 brand for sportswear apparel, the Adidas SWOT
analysis tells us that the brand needs to improve its research and development and localize production to sustain its
current positioning.

In addition to higher customer engagement, the company also needs to concentrate on cost-control.

The company needs to step up its penetration in the Asian markets for sustained growth and superior results.

Adidas should, therefore, restrict the outsourcing of its output and produce the goods themselves, thereby saving
them negotiating difficulties and reducing the possibility of high manufacturing expenses.

MISSION: TO BE THE BEST SPORTS BRAND IN THE WORLD

The adidas brand has a long history and deep-rooted connection with sport. Its broad and diverse sports portfolio,
from major global sports such as football and running, to regional heartbeat sports such as American football and
rugby, has enabled the brand to transcend cultures and become one of the most recognized and iconic global
brands, on and off the field of play. The adidas brand’s mission is to be the best sports brand in the world, by
designing, building and selling the best sports products in the world, with the best service and experience, in a
sustainable way.

Driven by a relentless pursuit of innovation as well as decades of accumulating sports science expertise, the adidas
brand has developed a truly unique and comprehensive sports offering. Spanning footwear, apparel, equipment and
services, the brand caters for all, from elite professional athletes and teams to any individual who wants to make
sport part of their lives. We help athletes of all levels to make a difference – in their game, in their life, in their world.
This is anchored in our core belief that, through sport, we have the power to change lives.

 Operating model: To ensure long-term success, it is important that we continue to challenge ourselves to
learn and grow. We must constantly iterate to become faster and stronger. Therefore, the adidas brand’s
operating model is directed by the guiding principles of Brand Leadership. The aim of Brand Leadership is to
provide an organizational structure which enables a ‘consumer-obsessed’ culture that can act with speed,
agility and empowerment.

 Creator archetype: Owing to the rapid evolution of sport and sports culture, the adidas brand targets key
consumer groups and influencers to create brand desirability and momentum through a well-defined
consumer segmentation strategy. The consumer grid comprises six key quadrants (Male Athlete, Female
Athlete, Young Creator, Streetwear Hound, Amplifier, and Value Consumer), which are not mutually
exclusive. Within this grid, it is key to win the most influential consumers, defined as the creator archetype.
True to the brand’s values, these influential consumers define themselves as a work in progress – are all
doers and makers, first to adopt, focused on what’s new and what’s next. A large portion of creators live,
play and work in the world’s most influential and aspirational cities, a key reason for the company’s Cities
strategic choice.

 Consumer centricity: Companies that put the consumer’s voice as a centrepiece of their decision-making
process have higher levels of success in creating brand advocacy. Therefore, we implemented a
global Net Promoter Score (NPS) ecosystem in order to drive brand momentum in a measurable and
objective manner. NPS has become an important part of the adidas brand’s advocacy program. Through this
program, we strive to understand consumers’ perception (positive and negative) of the brand and the key
drivers which motivate them to recommend the brand to their friends.

SUSTAINABILITY

The adidas brand is committed to sustainability and aspires to create lasting change in our industry through eco-
innovation, eco-activation, and by scaling its actions to end plastic waste

The brand’s innovations aim to reduce the amount of virgin plastic added to the world and clean up the already
existing plastic. As such, the adidas brand more than doubled the number of products made with recycled ocean
plastic from seven million in 2018 to more than 14 million in 2019. The brand also created fully recyclable products
such as the Future craft Loop performance footwear and the adidas by Stella McCartney Infinite Hoodie, in line with
its ambition to move toward circular business models.

The adidas brand has a wide reach, and believes it is essential to drive eco-activation through its employees and with
its consumers. The brand’s global movement, Run for The Oceans, in its third year doubled in size, with around 2.2
million participants logging over twelve million kilometres for Parley Ocean Schools. In its direct-to-consumer
business, the adidas brand installed dedicated spaces for sustainability, which are best exemplified in its flagship
stores and on adidas.com/sustainability. In addition, the brand launched the Infinite Play program in the UK, to
reward adidas Creators Club members for turning in their used adidas gear and helping give it a second life.
We continue to push our industry forward, both as a leader and alongside key partners who help us to become
better. May it be as one of the founding signatories of the UN Fashion Industry Charter for Climate Action or through
our open-source partnerships with start-up incubators such as Fashion for Good

ADIDAS TO SELL REEBOK TO AUTHENTIC BRANDS GROUP

adidas announced today that it has entered into a definitive agreement to sell Reebok to Authentic Brands Group
(ABG) for a total consideration of up to € 2.1 billion, with the majority to be paid in cash at closing of the transaction
and the remainder comprised of deferred and contingent consideration. The closing of the transaction is subject to
customary closing conditions and is expected to occur in the first quarter of 2022. adidas intends to share the
majority of the cash proceeds to be received upon closing with its shareholders.

“Reebok has been a valued part of adidas, and we are grateful for the contributions the brand and the team behind
it have made to our company. With this change in ownership, we believe the Reebok brand will be well-positioned
for long-term success. As for adidas, we will continue to focus our efforts on executing our “Own the Game” strategy
that will enable us to grow in an attractive industry, gain market share, and create sustainable value for all of our
stakeholders,” said Kasper Rorsted, CEO of adidas AG.

adidas bought Reebok in 2006. At the time, the acquisition included the Rockport, CCM Hockey and Greg Norman
brands, which adidas later divested for a total consideration of € 0.4 billion. In 2016 Reebok initiated a turnaround
plan called "Muscle Up" through which the brand was able to significantly improve its growth and profitability
prospects. In March of this year, adidas presented its 2025 “Own the Game” Strategy designed to significantly
increase sales and profitability and gain market share by 2025. During the strategy formulation process, adidas
assessed strategic alternatives for Reebok with a focus on ensuring both adidas and Reebok would be well
positioned for sustainable growth. Following this evaluation, adidas decided to focus its efforts on further
strengthening the leading position of the adidas brand in the global sporting goods market and announced the
initiation of a formal process to divest Reebok in February 2021.

The sale of Reebok has no impact on adidas’ financial outlook for the current year or the company’s 2025 financial
ambition that was announced as part of its Own the Game strategy in March of 2021.  

How is Adidas different from its competitors | Adidas Marketing Strategy

Adidas, the second-largest sportswear manufacturer in the world, is a German Multinational corporation founded by
Adolf Dassler. Adidas is mainly a sportswear manufacturer with the categories of clothing, shoes and other
accessories.

Looking at some beginning of Adidas, it was started in a house owned by Adolf's mother in 1924. Later, Adolf's elder
brother, Rudolf also joined him and they named it "Gebrüder Dassler Schuhfabrik" which simply means Dassler
Brothers Shoe Factory.

A few years later, because of some major conflict between the brothers, the company split and Adolf created Adidas,
while his brother created the biggest rival of Adidas- Puma. Sounds interesting, right?

Adidas is widely known as the largest sportswear manufacturer in Europe but on a global basis, it is beaten by Nike.
Headquartered in Herzogenaurach, Germany, Adidas has its chairman as Thomas Rabe and current CEO as Kasper
Rørsted. The brand manufactures the product category of footwear, sportswear, Apparel, equipment, and toiletries.

We all have heard a lot of things about Adidas, but the marketing strategies of the brand are known by very few.
Adidas is brilliant when it comes to marketing and no doubt, the company has established one of the strongest
positions in the global market. Moving forward, let's get started with the marketing strategies of Adidas.

List of Adidas sponsorships

https://en.wikipedia.org/wiki/List_of_Adidas_sponsorships
Adidas Brand Strategy

Product Strategy

Adidas has consistently strived to give the most elite products to the professional players through its product
innovation and product line. The product strategy of Adidas includes the products which are custom made for
different games and regions. The brand also specializes in products such as gym bags and sportswear.

In the year 2000, Adidas came up with a new sportswear inspired streetwear product line and it was the first ever
brand to do that in the market. The brand’s items incorporate clothes, running and streetwear shoes, football shoes
and other game utilities for tennis, golf, cricket, volleyball, rugby, skateboarding, baseball, field hockey and kabaddi.

The brand also makes watches, shades, socks and other products. It additionally has a line of antiperspirants, scents,
facial cleansers and aftershave lotions. The TaylorMade-Adidas golf section incorporates items for golf and Reebok-
CMM caters to the hockey segment.

The brand has recently come up with an app called Runtastic that makes applications for outside and indoor
wellness exercises. This campaign has been a successful one and has been highlighted by several fitness coaches and
experts.

Pricing Strategy

The brand has a specific segment of clients and it endeavors to give the best items and experience to them. Because
of its continuous innovation and pricing strategies, all the brand’s items are premium priced and are top quality
products. The pricing strategy of the brand has always focused on the product quality and the competitor pricing of
their products.

In today’s markets, Adidas produces shoes and apparels which are made from high quality materials and for that
reason the products are priced in a certain way. This might be a problem for the developing countries and for that
Adidas has created a separate market segment.

The import guidelines and tax levied in several regions and zones might influence the valuing of various items. It has
been reported that 94% of the product manufacturing is done in Asia. This is because labor is cheaper in Asia.

The brand has maintained a high-quality standard for its products and continues to maintain it in the present as well.

Distribution Strategy

Adidas has made its items accessible around the world through different distribution channels. The brand has
adopted strategies such as franchising, retail outlets establishment and has included itself in the ecommerce sites for
online distribution and selling of the products.

Adidas has created a distribution channel across the world markets and it is quite broad in terms of service. In the
year 1990, Adidas classified its deals into 3 classifications – Adidas Originals, Adidas Performance intended for
players in various game portions and Style segment which targeted the general customers.

Through these strategies, Adidas segmented the market into various parts and aimed to reach the global customers
accordingly. Adidas collaborated and joined hands with ILO and IFC.

This collaboration has given the organization an ability to perform and direct a supportable business. Adidas has
their flagship stores and retail outlets spread across the global markets.

Adidas has penetrated the ecommerce market and has listed their products in all the major ecommerce websites in
the major markets. The sales orders coming in from ecommerce is commendable and contributes to a substantial
amount in the revenue.

Advertising Strategy
The brand has continuously utilized and innovated their marketing and advertising strategy in an effective way.
Adidas incorporates the 360-marketing technique covering all parts of the promotional media and channels. Adidas
promotes itself though media sources such as television advertisements, print media, internet promotions,
billboards, hoardings and others. The brand has roped in world famous athletes and celebrities such as David
Beckham and Muhammad Ali.

In the ads, these celebrities demonstrated how they were not scared of their fear and how they conquered their
fears eventually. Adidas came up with a motivational brand tagline which was ‘Impossible is nothing’. This is
considered to be one of the greatest and most successful campaigns of all time.

Adidas additionally supports players from different sports. The brand is featured in different game platforms such as
Sony PS and others. Every one of these strategies ensure that the brand is remembered by all and is not easily
forgotten. By tailoring such clever marketing and advertising campaigns, Adidas has created a brand presence and
brand awareness in the entire world.

Conclusion

Adidas has come a long way since its inception and today it is the second largest sportswear brand in the world. In
spite of the tough market competitions and the hurdles in the past, the brand has managed to stay on top and has
created a scope for employment as well. The future is shining for the brand as it paves the way for new market
innovations coming its way.

As of 2020, Adidas had a turnover of €19.844 billion and has approximately 62,285 employees worldwide. From
establishing itself as one of the best sportswear, it has also been working towards establishing itself as one of the
best CSR companies globally (as of 2020).

How it all Began?

The foundation for Adidas was laid in 1920 by Adolf Adi Dassler, a 20-year old German who was an extremely
passionate athlete. He started producing shoes outside his mother’s laundry room using limited materials available
post WW1. Initially, he did not intend to sell sneakers and had completed his apprenticeship in a bakery before he
started selling his sneakers to produce the best shoes for passionate athletes.

Currently, Adidas has products in the following category

Footwear

Apparel

Accessories and Gear

In July 1924, the business was established as “Dassler Brothers Shoe Factory” (Gebrüder Dassler Schuhfabrik), which
was later joined by his elder brother. It was only in 1936 that the brand found true success when Adi gifted shoes to
the gold medallist Jesse Owen an American track-and-field star, who also made a world record in the 1936 Berlin
Olympics. The business became quite successful and was selling 200,000 shoes each year until WWII hit.

After WWII in 1947, the brothers had a clash and they split. Rudolf formed another shoe company known as Puma,
which is now considered one of the strongest rivals of Adidas.

The secret of Adidas branding

Despite constant changes, the Adidas branding stays true to its origins. Such consistency allows us to unmistakably
recognize the Adidas logo in any its variation. The success of the Adidas brand identity boils down to four main
principles:

 Simple design. All Adidas logos are minimalist and concise. Both the text and images are easy to read.  
 Versatility. Although Adidas’s primary corporate colors is black, the company varies its colors choices across
different product lines. Over the long course of its existence, the iconic emblem has turned white, red, and
even bright green.  

 Strong message. Adidas is smartly using its logo to communicate its values, such as quality, strength, and
perseverance.

 Awareness. The Adidas brand is trusted by many accomplished athletes and celebrities, including Beyonce,
Kylie Jenner, Cristiano Ronaldo, and Muhammad Ali. By wearing Adidas to public events, they’re further
raising the brand’s profile among both existing and potential customers.