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Organization Analysis and Strategic Recommendations for Adidas Company
Student Full Name
Name of Institution
Course Name and Number
Instructor’s Name
Due Date
Slide 1 EXECUTIVE SUMMARY
Conducting organization analysis helps in formulating strategies and making recommendations
for the business to achieve competitive advantage in the market environment. Further, the
approach facilitates in analyzing both internal and external environment to understand how to
improve the business performance. Thus, this paper ventured in analyzing Adidas in the lens of
SWOT, PESTEL, and Porter’s Five Forces and making recommendations for improving, as well
as illustrating ethical concerns. The analysis reveals that Adidas has a strong internal
environment to run its business but there are intense external threats that affects the realization of
the desired goals. Further, market competition is intense, which indicates that Adidas should
adopt cost leadership approach and matrix organizational structure. Also, the firm should focus
on being ethical by having a corporate social responsibility framework that supports measures to
curb global warning and earn carbon credits.
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Slide 2 ORGANIZATION BACKGROUND
Adidas is a sports firm founded in 1949 by Adi Dassler
Location is Germany
The company manufacturers sportswear, shoes and accessories
The firm faces turbulence because of market competition and deteriorating economy
Vision statement indicates that the firm uses sports to gain power in changing lives
“Create the New” (Annual Report, 2020)
“Own the Game” (Annual Report, 2021)
Adidas is a company founded in 1949 by Adi Dassler in Germany. The firm engages in the
manufacturing of sportswear, shoes and accessories. However, for the time Adidas has been in
business, it has faced several turbulences in the market. These changes have been introduced by
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aspects of intense market competition and deteriorating economy that affects the sales volume of
the firm. Moreover, the vision statement of the company illustrates that it has the power to
change lives while using sports. Hence, Adidas has been able to perform well in the highly
competitive marketing environment through its overarching goal of “Create the New” (Annual
Report, 2020). Moreover, the company has changed its strategy to “Own the Game” (Annual
Report, 2021).
Slide 3 INTERNAL STRENGTHS
Good financial position (Adidas Annual Report, 2023).
Strong distribution channels
Effective internal operations
Brand recognition and sponsoring events
Adidas has a strong chain for distribution of its products to the market environment. Further, the
firm has a good financial wealth, which allows it to access the required resources for conducting
business in the competitive market environment (Adidas Annual Report, 2023). In addition, the
organizational structure supports an efficient internal operation of the company. Also, Adidas has
a well-established brand that gains recognition through sponsoring of the various sporting events.
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Slide 4 INTERNAL WEAKNESSES
Limited product line
High cost of the sportswear (Adidas Annual Report, 2023).
Limited e-commerce activities
Adidas has a limited product line, which is based on the sportswear. As such, the cost of these
products is high subjecting the firm to intense market competition from other entities that include
Puma and Nike (Adidas Annual Report, 2023). Further, the firm has not yet ventured fully in e-
commerce business activities, which would help in stimulating sales and developing brand
loyalty.
Slide 5 EXTERNAL OPPORTUNITIES
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Changes in consumer preferences for the innovative products
E-commerce growth (Adidas Annual Report, 2023).
Advancing in technology
The company has the opportunity to venture in providing innovative products, which match the
changing preferences from consumers on innovative sportswear. Further, Adidas has the chance
to utilize the new trend in market where business organizations are adopting e-commerce
strategies to expand and serve their consumers efficiently (Adidas Annual Report, 2023). In
addition, the company can advance in the use of modern levels of technology that include social
media in marketing its products, gathering feedback from consumers, and interacting with
customers.
Slide 6 EXTERNAL THREATS
Market competition
Instability in global economy (Adidas Annual Report, 2023).
Substitute products
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The company faces intense market competition from rival firms, which include Puma and Nike.
Further, the firm is threatened by the instability of the global economy, which is attributed to
aspects of increased taxation and economic recession (Adidas Annual Report, 2023). In addition,
the firm is threatened by the presence of substitute products in the market that can lead to loss of
customers.
Slide 7 PESTEL
Political Adidas faces threats attributed to political regulations and insecurity. For
example, the firm has to comply with political regulations of operating a
business in an international market environment.
Economic The prevailing global economic conditions influences the sales volume
of the company (Adidas Annual Report, 2023). Further, economic
stability of the region affects the buying decisions and behavior of
consumers, which in turn impacts the sales of the organization.
Social The trends of consumers on tastes and preferences for fitness affect their
choices of Adidas products. Further, there are demographic shifts that
impact consumer buying behavior.
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Technological Globally, levels of technology are changing. As such, Adidas has
embarked on adopting the recent technological changes and innovations
to meet the demands of the consumers.
Environmental Adidas is a firm that is aware of the issue of global warning and focuses
on attaining carbon credits set for the organizations in its market
environment. Moreover, the firm produces environmentally sustainable
products in the market.
Legal The company ensures that it complies with all legal requirements. As
such, the firm has embarked on investing heavily on its property and
intellectual rights to ensure that there are no counterfeit products that can
lead to lawsuits.
The PESTEL analysis indicates that Adidas is affected by several factors in its business practices.
Therefore, the firm can only remain competitive by ensuring that it mitigates on the negative
effects of these factors effectively.
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Slide 8 PORTER’S FIVE FORCES
New Entrants Threat Adidas has been able to establish a strong market position,
which makes the threat of new entrants to be low. Further,
the firm has had the chance of establishing global market
presence.
Substitute Products Threat There is a moderate threat of substitute products. As such,
several other firms have the capability to provide innovative
sport apparel for consumers.
Competitive Rivalry There is a highly competitive rivalry in the market
environment of Adidas (Adidas Annual Report, 2023).
Thus, the firm has to compete for markets with other
entities that include Puma and Nike.
Suppliers Bargaining Power A moderate bargaining power of suppliers exists for the
company. Hence, the firm has the potential to strengthen its
supply chain and offer the best incentives for the suppliers.
Consumers Bargaining Power Consumer bargaining power is moderate. Thus, customers
have the options of buying products from other competing
brands that include Nike.
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Porter’s five analysis indicates that Adidas operates in a highly competitive market environment
with intense rivalry from entities such as Puma and Nike. Therefore, it is paramount for the
organization to ensure that it functions effectively to minimize the effect of these high forces in
the market environment.
Slide 9 GENERIC STARTEGY RECOMMENDATIONS
Cost leadership approach in product lines
Sustainability strategy (Gallagher, 2020).
Product differentiation
Building public image
Adidas should focus on ensuring that it introduces affordable lines for products to ensure that it
captures new and emerging markets. Further, the organization should aim at using a
sustainability strategy as the key approach for achieving success in the market (Gallagher, 2020).
The approach should involve using sustainability materials to produce sports apparel and attract
customers. In addition, the organization needs to allocate resources for innovation to ensure that
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it can engage in product differentiation. Thus, it will be easy for the firm to market its products in
the competitive market environment. In addition, it is essential for Adidas to establish a strong
public image by building its brand. The strategy should ensure that the brand meets the needs and
preferences of the consumers.
Slide 10 ORGANIZATION DESIGN RECOMMENDATIONS
Matrix organizational structure
Chief executive officer
Functional Managers
Project staff
Adidas should adopt a strong matrix organizational structure, which has the chief executive
officer (C.E.O) at the top and below as the functional managers. The next level should be project
staff. As such, it will be possible for the employees to work on several tasks across different
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departments (Fioretti & Neumann, 2022). Moreover, the approach creates innovation and
creativity in the company.
Slide 11 ETHICAL CONSIDERATIONS
Sustainability in the environment
Quality products
Data privacy
Corporate social responsibility (Goel, 2020)
Diversity in the workplace
Adidas has to ensure that it embraces sustainable measures in production of sports apparel. The
approach should involve using environmentally friendly materials while at the same time
supporting measures to curb global warming. Further, the firm needs to cut down on waste
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production and focus on recycling. Moreover, the company should ensure that it produces quality
products and adopts marketing ethics when advertising to consumers. Also, it is important for the
organization to be aware of issues of emerging e-commerce business practices and focus on
consumer protection and data privacy. In addition, the company should use its corporate social
responsibility strategy to remain ethical and acceptable within its areas of operation (Goel,
2020). Finally, Adidas should strive to ensure that it embraces measures of diversity in the
workplace such that there is inclusion of all people without discrimination of any group.
References
Adidas Annual Report. (2023). Annual report.
https://www.annualreports.com/HostedData/AnnualReports/PDF/OTC_ADDDF_2023.pd
Annual Report. (2020). Strategy. https://report.adidas-group.com/2020/en/group-management-
report-our-company/strategy.html
Annual Report. (2021). Strategy. https://report.adidas-group.com/2021/en/group-management-
report-our-company/strategy.html
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Fioretti, G., & Neumann, M. (2022). Hierarchy and diffusion of organizational forms. Frontiers
in psychology, 13, 932273. https://doi.org/10.3389/fpsyg.2022.932273
Gallagher, B. K. (2020). The Roots of Great Innovation: State-Level Entrepreneurial Climate and
Sustainability of Nonprofit Arts and Culture Organizations. Artivate, 9(1), 67–81.
https://www.jstor.org/stable/10.34053/artivate.9.1.0067
Goel, S. (2020). National Cyber Security Strategy and the Emergence of Strong Digital Borders.
Connections, 19(1), 73–86. https://www.jstor.org/stable/26934537
