What is an informed analysis of the company Adidas? Does it appear to have a positive outlook for the future? What are three recommendations one could make for the company's future?
A company analysis is very complex research operation performed by IT analysts, systems analysts and technical analysts. A company analysis objective is to identify the problems and needs of a company and then to identify solutions to these. This is a complex expert process that entails many approaches to achieve an end result: company structure, SWOT (strengths, weaknesses, opportunities, threats), PEST (political, economical, social, technology), BCG Matrix (product life cycle: high growth products needing cash input plus low-growth products generating cash flow), strategy, organization, communication, employees, skill sets, leadership. The analyst reaches conclusions appropriate to each type of analysis and then an overall conclusion that identifies questions to ask that lead to solutions to the needs and problems identified. For instance, a 2005 analysis of adidas determined that not enough was known about the difference between Nike and adidas to identify the reason for adidas' continual second place positioning after the global market leader, Nike. The suggestion was that, while marketing needed to produce more sophisticated and more consistent advertising, more data about the distinctions between the two companies--or between the perceptions about the two companies--was needed in order to formulate a definitive solution.
Based on information available to someone who is not an expert analyst, an informed analysis of adidas would determine that their task oriented, controlled organization is appropriate to their multilevel production--with dozens of European subsidiaries--marketing and R&D (research and development) needs, especially since they have a significant focus on employee comfort and satisfaction as shown through such programs as flexible work hours (flex-time) and organized transportation to operations centers (information from the report of a private consultant business analyst who performed a 2005 company analysis for adidas).
adidas publishes its financial statements, which indicate that, though there were negative impacts of the economic downturn and slow recovery from 2008 till 2013, their financial position in 2013 was still strong with a 7.2 percent increase in accounts receivable though they had an 84.4 percent reduction in short term financial assets. While inventories were increased by 5.9 percent, the category of "other current assets" was up by 3.7 percent. Overall, with total assets for 2013 at 11,599 million Euros, there was a reduction in assets of only 0.4 (four tenths) of a percent, with an overall 22 percent reduction in current and non-current liabilities, which reflects reductions in categories like current and deferred tax liabilities, long-term borrowings liabilities and "other" unspecified liabilities.
Knowing that the global footwear industry has a strong outlook for the coming years through the projections till 2018, and knowing that external consumer factors--such as demands for style and design changes coupled with increased disposable income--indicate a robust marketability for the full scope of adidas products, an informed analysis is that adidas is in good financial and competitive market positions to justify confidence in a positive outlook for the future. Recommendations for adidas--which is at the cutting edge of technological advancements in its industry with the introduction of injected CO2-based waterless dye and virtual product samples--might be to continue to emphasis eco-friendly R&D while adding emphasis in consumer-friendly materials that are not technology-based, like the unresearched and unregulated nanotechnology microfibers, and while continuing to identify the defining elements that keep Nike in the lead.