What could a SWOT analysis for the company Adidas look like?

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Stephen Holliday | College Teacher | (Level 1) Distinguished Educator

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I am basing this Strength Weakness Opportunities and Threat (SWOT) assessment for Adidas Group (the parent corporation) on Adidas Group's 2013 Annual Report and several other financial statements.  Although I cannot set this answer up in table form, you are undoubtedly aware that an SWOT analysis is usually in the form of four boxes, with the top two labeled Strengths and Weakness, and the bottom two labeled Opportunities and Threats; alternatively, the SWOT may also be organized vertically or horizontally, but the most common is two by two.

Adidas Groups' strengths in order of importance are 1) its significant brand reputation, first in Europe, and then in the rest of the world, since its began manufacturing shoes, its first product,  in 1949; 2) very few sportswear and equipment manufacturers have as widespread a presence, including manufacturing and distribution facilities, in several countries with a stable workforce;  3) Adidas Group has one of the most diversified product lines and well-known subsidiaries (e. g., Reebok, Rockport), including sports shoes, equipment, clothing and accessories, in the industry;  4) Adidas Group is active in sponsoring major and minor sporting events and teams, including the Olympics, in several major international venues, which adds to its goodwill and name recognition; 5) its dynamic and robust marketing activities, which include hiring top athletes as spokespersons, keep its products in the minds of consumers of all age levels and several major worldwide sports.

The four primary weakness are as follows: 1) Adidas Groups' products, in order to be competitive, require constant and continuous innovation that may require inordinate amounts of capital expenditures, with no assurance that the innovations will be successful commercially; 2) the competition in this industry is fierce and product popularity is dependent upon consumer loyalty, which is notoriously changeable; 3) on a macro-economic scale, Adidas Groups' products are highly susceptible to downturns in local and international economies, and Adidas has no meaningful control over this weakness; 4) Adidas invests much of its advertising funds not only in products but in athlete-spokespersons, who may, depending on their behavior, become a liability.

Opportunities include 1) leveraging the ability of its subsidiary companies to focus narrowly on specific markets and demographics, thereby creating a "blanket" strategy that covers many different consumer sectors; 2) in its footwear operations alone, Adidas Group can market between 60 and 80 new footwear designs per year, covering several major sports in several countries; and 3) as new athletes emerge and their popularity grows, Adidas, because of its comprehensive understanding of competitive athletics and infrastructure, can bring these newly popular athletes into its marketing arm, thereby marketing certain products to a whole new element of the consumer market.

The true threats to Adidas are largely out of its control: 1) the health of the principal economies in areas where its market share is the largest, as well as the areas in which its manufacturing takes place; 2) the ability of newly-developed economies (China, for example) to produce similar products at significantly lower prices, which puts pressure on Adidas to lower its costs in order to maintain market share; 3) as world economies continue to be stressed, central banks with which Adidas does business may continue to raise borrowing costs, and this will impact Adidas Group negatively across all product lines; last, but increasingly important, 4) fake Adidas products will continue to encroach on Adidas' market share in many places.

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