Every industry has certain corporations, which are at leading positions and the customers trust
and can relate to their products. Adidas group is a German multinational corporation, which
started its journey long time ago and has becom e key player and competitor in the field.
Adidas is the largest sports company in Europe and second largest in the world, after Nike.
The Adidas Group portfolio consists of some major brands like Reebok , TaylorMade golf
company, Runtasti c, etc.
The Adidas slogan changed with its strategy : From Impossible is
nothing to Adidas creating the new in 2015 (Wikipedia , 2019 ). Erich Stamminger, member
of Adidas ‘ Executive Board, describes “”Impossible is Noth ing”” as the idea behind Adidas
“”Forever Sport”” brand positioning, which communicates the enthusiasm for sport obviously
and emotionally. The articles mentioned in the reference section have been useful in getting
mo re information related to the Adidas Group.
Ethical and sustainable approach positive and negative:
From humble beginnings in 1949 in Bavaria, Germany, founded by Adolf Dassler (the brother
of Rudolf Dassler, founder of Puma) Adidas is now a household na me, known and loved for
its iconic Stan Smith sneakers, logo sweaters, tees and sportswear, worn by athletes all over
the world. Adidas ethic and sustainability priorities are divided into two parts namely Product
Through their products, they p lan to save water, use of innovative materials and processes and
conserve energy. Adidas is step ahead of many other big sportswear brands when it comes to
sustainability. They have committed to set targets through their product priorities as part of
susta inability process that recognizes local water impacts and efforts in water -stressed basins.
The use of recycled material from the waste from the sea including plastic bottles in their
range of products is another initiative taken together with ocean conser vation group Parley for
the Oceans. They have also set a number of goals to reduce carbon footprint as part of their
sustainability strategy. They plan to reduce their production waste, energy consumption and
Adidas labour rating is quite good in comparison to many other firms. Through their ethical
and sustainability approach the group plans to empower people, improve their health and
inspire the action. The brand gets top score in its supplier code of conduct. According to their
financial reports, they claim that they can trace and audit most of their supply chain, and also
publicly list most of their suppliers. Although they take many positive steps, they still have
few worker empowerment initiatives planned. Comp ared to the amo unt spent on sponsorships
to the stars and other marketing activities, the amount paid to the worker in the supply chain is
very low. They are also are working towards ensuring workers in its supply chain are paid a
living wage. However, Adidas need to im prove their ratings in terms of animal welfare.
Although they do not use cashmere or any other exotic animal skins or hair, they do use
leather, wool and down feather without specification of the sources. Thus reducing
transparency in terms of the welfare of the workers and animals.
Adidas is making progress in terms of sustainability and labour rights, but since it is still part
of fast growing fashion industry, which produces huge quantity of garments, which are not
necessarily made from sustainable mater ials, it still has bad effects on environments and the
workers working long hours for very little pay. As part of people priority for 2020, Adidas
aims to enable people around the world to participate in sports and educate them on physical
and mental healt h as well as fitness and nutrition. They also wish to reward the employees for
their commitment and contributions and other activities to involve its employees more .
Strength : Adi das sportswear can be recognized in every corner of the world. Their brand
image is very positive and have widespread awareness. Their products are not only
fashionable but also of relatively h igh quality. By the use of sport stars and other prominent
people in their advertisements, they were able to attract people of all ages. They have a very
well developed distribution network. Their shipping times across the globe are quite
reasonable. The customer can choose how and where to buy their products be it online or
other larger -scale sportswear retailers or Adidas branded stores.
Weakness : Adidas out sources its production to most of the Eastern countries. By outsourcing
their manufacturing, they lose some control over their product manufacturing and they fail to
ensure that all of its products meet the same rigorous quality standards. The long working
hours of workers and their working conditions can also not be controlled. On one hand,
Adidas has diverse products in different price on the other their range still have not opted to
diversify its product line. They have major focus on footwear compared to other sportswear
products w hich their competitors have already focusing on. Product endorsing through
celebrities although part of both Adidas and Nike, Adidas has invested very little in securing
celebrity endorsements, which can hamper its growth. Endorsements not only increase b rand
Opportunities : People in general have become very health conscious hence health and fitness .
Thus increasing the need for appropriate sportswear due to increased demand . Adidas is
trying to use smart materials like use of plastic bottles from the ocean clean . Adidas
continually invest in their development and manufacture of new materials that will make thei r
products of superior quality compared to others. Adidas could invest in developing new
materials meeting the needs of people in modern days like use of fabric, which is cooler and
comfortable for during hot summer days, or thin but warm fabric in cooler days.
Threats : The competition of Adidas with Nike is well known . There is no major difference in
their product lines or qualities. That makes it even more important for Adidas to focus on its
brand image and use of proper channels to promote its products. They could use celebrity
endorsements more as discussed previously. The market is filled with counterfeit products .
Adidas has encouraged its consumers to buy the real thing but in case of any fallout with its
overseas supplier, there is risk of a huge influx of counterf eit products entering market.
Political : Potential trade war due to political differences, wavering trade policies, minimum
wage policies, etc. are some factors, which regulate production and supply of products.
Economical : Accor ding to the balance sheet of Adidas, they have seen notable growth in their
revenue in 2017. The economic factors like lack of domestic demands, impact of currency
fluctuation, customer -procuring rate etc. can affect the company extensively in long run.
So cial : Sports has become important aspect of all cultures and society. There is increase in
trends amongst millennials to buy the branded products from sports companies like Adidas
Technological : Popularity of devices like digital watch and fitness gears h as increased. The
digitalization and increasing consciousness about health is driving force for companies like
Adidas to make more tech based fitness gadgets.
Legal : Implementation of technology solutions for regulatory compliance
Environmental : Adidas has been showing increased awareness towards the environment by
developing sports gears made out of sustainable materials
Arena : Adidas group has many brands like Reebok and the products are sold through different
channels. They sell their products online through their websites as well as in wholesale market
or its own retail shops all over the world. Their customer profile is ranging from sports
enthusiast to a normal person who wears Adidas trendy sportswea r for regular use. Adidas
continue to invent new products, which are more appealing to masses.
Vehicles : Adidas use various technologies to make their products and they tie up with various
firms to make their products like the special shoe cushioning mate rial created with BASF.
Differentiators : Adidas has a good brand image and hence its products have a competitive
advantage. They do their marketing in various ways like use of famous athletes like Lionel
Messi , etc. They also sponsor variou s national teams and they have been one of the official
sponsors for biggest events like NBA League and UEFA champions. They also have
superstars like Kanye W est etc. promoting th eir products . They also have unique style in their
Economic logic : Adidas group strategy includes both economies of scale and economies of
scope. Adidas uses same materials to produce many models of a particular product and in
large quantity. Like the use of cushioning m aterials that can be used in various products by
just changing designs of the product. Their products are of various price range from
affordable to premium category. Thus making it available to a bigger market and increasing
profit. They have been profitable over the years and continue to grow.
Staging : Adidas group w as formed in Germany in 1924 and its mission as of today is to
provide best possible equipment for the athletes. The brand registered its unique three stripes
style, which they purchased from the finish footwear brand K arhu sports. The victory of
German te am against Hungarians in English football match in 1945 created an awareness
about the brand. They went on acquiring Solomon group in 1997 as well as the rivals Reebok
in 2005. Adidas plans of using recyclable material makes the brand more ethical and
Strategy is essential to any organizations success and sustainability, helping organizations
know their key capacities, identifying and addressing weaknesses, mitigating hazards, and
understanding trends that will affect their business and industry, and how they will react to
them. Hence, the organizat ion’s success or failure relies on the tactics that follow. Adidas
ability to create a wider product range and consumer centricity in the fierce competitive
environment has created a very good image of the company along with increased trust and
desirabili ty from the consumers . T hey have planned three strategic choices for 2020 : cities,
open source and speed to move towards creating the new and create the product of desire.
From collaborating with people like Kanye West and Pharrell Williams to the brands best
practices of utilizing innovative technology have all been effective towards increasing their
sales and creating a brand image. In addition, the use of plastic from the ocean in their foot
wear, as well as sustainable and bio -degradable material , they were able to create products
which are considered remarkable achievement in terms of sustainability. They also plan to
concentrate on Adidas and Reebok and core competencies of making footwear and apparel.
Adidas must continue on their distinctive and innovative path in ord er to be more competitive
and surpass Nike as marker leader. They should stick to their ethical and strategic plans to be
successful on the front of supply chain. To perf orm at similar levels as Nike Adidas should
maintain its innovative streak and keep hold on to its partnerships with the stars like Pharrell
Williams. It would certainly need to hold on to every partner in its supply chain to remain
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