A. Strengths

* Distinguished Brand Name

Adidas AG has been in the market for more than 60 old ages and is still renowned as one of the world’s biggest athleticss vesture and accoutrements supplier. It’s a company that is known to supply high quality merchandises and makes certain that their clients are comfy with what they wear. And now. Adidas AG has been really popular that everyone in the universe knows the three chevrons company.

* Customer Loyalty

As the old ages go by. the said company showed its client their trueness by supplying them merchandises that are suited with their penchants and that ensures their satisfactions. With this. Adidas AG besides gained positive comments from their clients and until now. they are still being patronized.

* Partnership with Sporting Events

Bing the patron for many featuring events like the FIFA. UEFA every bit good as the NBA. Adidas proved another border with its rivals. This shows that this company is truly sure worldwide. In FIFA. Adidas even designed a ball for the 2010 World Cup which was held last 2010. In UEFA. Adidas became the spouse for the event until 2016. They were contracted to supply balls. equipment. staff. functionaries and even referees for the said event. While in NBA. they will be the unvarying suppliers until 2017.

* Adaptability to Change

You will see a venture seeking company in Adidas AG. As we saw in its timeline. Adidas AG is non afraid to accommodate to certain alterations in its company construction like acquisition and invention. They are non afraid to step out of their comfort zones merely to bring forth merchandises that would maintain up with the tendency without giving the ideals of their clients every bit good as the community.

* Subordinates

Adidas AG comprised of TaylorMade every bit good as Reebok and these subordinate companies are besides really celebrated worldwide like Adidas AG. They besides provide the consumers with satisfactory merchandises and are able to vie with big graduated table concerns in their ain line of concern.

* Diversification of Merchandises

Diversification is a major issue today. Because of the fast changing universe. the consumers are more and more inquiring for something new that’s why the said company now involved itself in the competition of diversifying its merchandises. Adidas is non merely selling featuring accoutrements and vesture. Because of their subordinates. they are besides supplying other stylish points that are suited for different coevalss and for those people who are non truly into athleticss and merely desire comfy vesture.

* Support for Athletes

Adidas was built non merely for net income but to besides supply comfy places to people and right now. Adidas is concerned with jocks all over the universe. They are systematically making their best in order to bring forth merchandises that can assist better the public presentation of jocks while doing them comfy with what they wear at the same clip.

* Corporate Social Responsibility

Presents. doing your merchandise better than the other is non merely what the consumers are seeking for. They are now sponsoring merchandises which are environmental-friendly and are able to maintain the community in good status. Like in Adidas. they broadened the usage of recycled stuffs for their packaging every bit good as other parts of their merchandises to advance their “better place” undertaking which is to guarantee that the environment would be saved.

* Efficient Management and Operations

A company wouldn’t be successful without the aid of their figure one plus which would be their work force. Adidas’ direction ensures that the operations traveling around Adidas is worked expeditiously and efficaciously while being able to maintain up with their aims. Aside from that Adidas introduced a new prediction attack in order to better their concern planning and determination devising procedures. The proficient staff of this company plays besides a major function in its success. The merchandise lines of Adidas comprise of merchandises that are able to heighten the ability of the user and these are made possible because of the proficient expertness of the people of Adidas. The procedures by which they make their merchandises are complex and sensitive in order to supply their consumers with satisfaction.

B. Failings

* Extensive debt funding

AG has an extended long term debt were in most of its assets were financed by the creditors paving the manner for AG to hold a high grade of fiscal purchase and hazard of liability. By measuring the solvency evaluation of AG utilizing Debt ratio it shows a lessening in debt ratio ( entire liabilities/total assets ) from 64. 33 % ( 6133/9533 ) in the twelvemonth 2008 to 57. 45 % ( 5099/8875 ) in the twelvemonth of 2009 which is a net lessening of 7 % in its debt ratio. Initially this betterment in debt ratio is favourable to AG but still it is regarded as failing chiefly because the creditors of AG still owns more than half of the company’s assets earning a 57. 45 % equity when in fact AG must maximise shareholders’ value. Meaning to state out of 100 % company’s assets. 57. 45 % of those assets are equity of AG’s creditors go forthing merely 42. 55 % ( 100 % -57. 45 % ) equity to stockholders of AG. This is a failing to AG in such a manner that prospective investors might non put their money to AG because of high hazard of liability.

* Inefficient Use of Company’s Assetss

Exhibit 9 of the instance discloses the return on assets ratio of AG and its rival NIKE. AGNIKE
Tax return on assets 2. 8 % 11. 2 %

Tax returns on assets ratio assess the efficiency of company’s assets to give optimum degree of net income. In the facts given it is clear that AG is inefficient with the usage of its assets because its ROA is merely 2. 8 % whereas its rival is 11. 20 % . it is failing in the portion of AG because this could be better and develop to go strength if lone AG will happen ways to maximise the efficiency of its assets. This is considered failing instead than a menace because it has something to make with the internal operation of AG.

* Extensive good will

Goodwill is classified as company’s assets but. holding excessively much good will is non that good particularly good wills are being trial for possible damage which in instance can be a extra loss to AG in the exhibit 9 of the instance the good will lessening from 1499 to 1478 there is an premise that we can pull that good will was impaired for 21 million euro which is an impairment loss for the company.

* Stick to Sports Brand

Adidas has been known to supply athleticss trade name and non truly to supply fashionable manner accoutrements and vesture to its consumers. Yes they have some but merely a minor per centum of what they provide the populace. This is a failing for them since their other rivals are get downing to broaden their not-so-sporty merchandise lines to maintain up with the modern tendency.

C. Opportunities

* Expand merchandise lines

Adidas is bring forthing about all sort of the merchandise for the jocks. pugilism. swimming. football. organic structure edifice. golf etc. doing all sort for merchandises to give them comfort and assurance that they are have oning a dependable merchandise. All of these athleticss consume high degree of energy while their every twenty-four hours workout or during preparation session. As a extremely reputed company if Adidas introduce such merchandise so it will increase its market and an add-on to it feature industry.

* Favorable macroeconomic developments

Since AG are a consumer goods company. consumer assurance and disbursement can impact their gross revenues development. Therefore. better than ab initio forecasted macroeconomic developments. which support increased discretional private ingestion. can hold a positive impact on their gross revenues and profitableness.

* Increasing consumer demand for functional dress

Consumer demand for functional dress has increased significantly in recent old ages as consumers realize the benefits of functional dress over traditional cotton athletic wear. Improved heat and wet direction. superior easiness of gesture and increased comfort are all factors promoting consumers to exchange to high-performance dress. The design and development of functional dress requires significantly more expertness. merchandise and material research every bit good as production know-how compared to low-tech dress. Therefore. really few companies are able to provide high-end functional dress. AG’s resources and their placement as a athleticss public presentation leader enable them to invariably develop advanced merchandises and capitalise on them commercially

* Leveraging strong market places worldwide

The adidas Group is the market leader in legion states around the universe. This strong competitory place offers AG many advantages in footings of planetary trade name visibleness. market power and the ability to efficaciously spread out place in emerging markets. As a consequence of their strong partnership portfolio and selling attempts. consumers around the Earth are extremely cognizant of their trade names and are receptive to their trade name messaging. This makes demand for their merchandises more stable compared to smaller rivals. Hence. many retail merchants consider their merchandises as nucleus to their offering. Furthermore. with their planetary retail coverage and distribution web. AG are able to leverage their substructure to present and more quickly expand their trade names and merchandise offerings to markets where they antecedently did non be. The adidas Group can therefore vie more efficaciously for retail infinite.

D. Threats

* INSTABILITY OF GLOBAL ECONOMY

With the uninterrupted singular bend of events. alteration has been changeless in our planetary economic system today. Prevailing alterations that affected several persons and entities have been occurred such as fluctuation in currency rates. unemployment rates. revenue enhancement rates. restricted recognition extension policies and much more. The instability of the economic system has become a menace to many corporations and it even affected their major determinations. In the instance of Adidas AG. it has brought them into an ordeal state of affairs wherein they have to make up one’s mind whether to get the Armani Group or non despite of the planetary recession. The determination of the company will either do or interrupt the concern in the hereafter. Should hold been the planetary economic system stable. it would be easy for the Adidas AG to make up one’s mind sing the acquisition.

* COMPETITION

Competition has been rampant in the universe of athleticss vesture. equipment and footwear. It has been a hard brush for Adidas AG to confront its rivals in the thick of their phenomenal success. Such rivals like Nike. Under Armour and Callaway Golf have given Adidas AG the menace of losing in the market because of the fight and quality of merchandises that its rivals besides provided to clients. Adidas has been. in fact. threatened with the tight competition it faces right now. So the company continuously is believing of schemes which are long-run and at the same clip flexible so that it could crush its rivals to keep its extremely regard repute in the market.

* TRENDS IN PATTERN OF CONSUMER BUYING BEHAVIOR

The economic fluctuations in the universe have been a “domino effect” in every sectors of the macroeconomic environment. The economic position of persons which was based on their employment has affected the tendencies of consumer form of purchasing behaviour. With this scenario. it has given a menace to Adidas AG that their clients might fasten their budget and merely utilize their money on the other things which are more valuable such as nutrient. necessary apparels and shelter. Even though most clients of Adidas AG belong to the upper and in-between degree. it would still impact the market because clients now will minimise their disbursement to fit with the income that they received.

* THREAT OF OUTPERFORMING EXISTING PRODUCTS BECAUSE OF THE INTRODUCTION OF NEW PRODUCT LINES

Geting another company such as Armani Group would ensue to the debut of new merchandise lines in the company. This new merchandises might cut down the gross revenues of other merchandises which gives a menace to Adidas AG. In fiscal direction. this state of affairs is refer to as“cannibalization” wherein new merchandise lines eats the market portion of the bing merchandise lines doing it to surpass among the merchandises and others will be left behind