ESSAY_PESTEL_SWOT_PORTER'S FIVE FORCES_ PESTLE ANALYSIS.edited

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1 UK’s Adidas Marketing Plan for The Year 2022 [Name] [Course Details] [Institution’s Afffilaition] [Instructor] [Due Date]

2 EXECUTIVE SUMMARY Adidas, founded in Germany in 1924, is a leading global sportswear brand that produces footwear, clothing, and accessories. They are Europe's top sportswear producer and just behind Nike as the most significant sportswear maker globally. Adidas' advertising campaign, including the slogan "Impossible is nothing," has made the brand a household name (Yang, 2019) and a motivator for athletes. Adidas aims to invent new products and offer customer-focused services to enhance sales. Adidas' mission is to become a global market leader in sporting goods with brands built on a passion for sports and a sporting lifestyle (Bouredji et al., 2020). To maintain its competitive edge, Adidas is committed to improving its products and services to serve its customers better while continuing to provide athletes with durable, valuable, and unique products. Adidas aims to expand its customer base by focusing on customer satisfaction.

3 Table of Contents EXECUTIVE SUMMARY ....................................................................................................................... 2 1. INTRODUCTION ............................................................................................................................. 4 2. GOALS AND OBJECTIVES ............................................................................................................ 4 3. PESTLE ANALYSIS ......................................................................................................................... 4 ................................................................................................................................................................. 5 2.1. Political Factors .......................................................................................................................... 5 2.2. Economic Factors ....................................................................................................................... 6 2.3. Social Factors ............................................................................................................................. 6 2.4. Technological Factors ................................................................................................................. 6 2.5. Legal Factors .............................................................................................................................. 7 2.6. Environmental Factors ............................................................................................................... 7 4. SEGMENTING .................................................................................................................................. 8 5. PORTER'S FIVE FORCES .............................................................................................................. 8 5.1. Competition in the market ........................................................................................................ 8 5.2. The potential of new entrants ................................................................................................... 8 5.3. Power of Suppliers ..................................................................................................................... 9 5.4. Power of Customers ................................................................................................................... 9 5.5. The threat of substitute products .............................................................................................. 9 6. SWOT ANALYSIS ........................................................................................................................... 10 6.1. Strengths ................................................................................................................................... 10 6.2. Weakness ................................................................................................................................... 10 6.3. Opportunities ............................................................................................................................. 10 6.4. Threats ...................................................................................................................................... 10 7. ANSOFF MATRIX MODEL .......................................................................................................... 11 7.1. Market Penetration ................................................................................................................... 11 7.2. Market Development ................................................................................................................. 11 7.3. Product Development ................................................................................................................ 12 7.4. Diversification ........................................................................................................................... 12 8. MARKETING MIX ......................................................................................................................... 13 8.1. Product ...................................................................................................................................... 13 8.2. Price .......................................................................................................................................... 13 8.3. Promotion .................................................................................................................................. 14 9. DISTRIBUTION CHANNEL ......................................................................................................... 14 10. CONCLUSION ............................................................................................................................ 15 REFERENCES ........................................................................................................................................ 16

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4 UK’s Adidas Marketing Plan for the Year 2022 1. INTRODUCTION For generations, Adidas has been a household name. Iconic items such as the three-stripe sweatshirt and predator soccer cleats have been produced for decades. It was only proper to devise a marketing strategy for one of the world's most well-known businesses. A multi-brand approach implemented by Adidas allows the company to have various brands. The Adidas Group has a wide range of products, from elite athletes to stay-at-home mothers. Businesses like this target young adults who are active in sports and come from stable families (Sanyajirasiti et al., 2019). Adidas can reclaim its market share using the marketing mix: product, price, place, and promotion. 2. GOALS AND OBJECTIVES The SMART goals method determines the company's goals and objectives. The organization uses this method to set specific, measurable, reachable, realistic, and time-bound goals. It is an effective strategy. The company's precise goals are clearly defined, unequivocal, and clearly stated. Adidas aims to increase sales by promoting its products and using new technologies (Cobzariu, 2021). Adidas plans to combine technology and style to create new items. The goals have been determined to be measurable, attainable, and a reasonable amount of time away from being achieved. 3. PESTLE ANALYSIS Adidas's external aspects, such as socio-political-economic-technological, environmental, and legal, are examined using PESTLE Analysis. The PESTLE Analysis identifies the many factors outside the company's control that impact its financial performance

5 (Beede, 2020). Adidas, for example, relies heavily on PESTLE research to stay current on economic trends and keep their business growing. Pestle Analysis has several things to consider. 2.1. Political Factors Adidas has the most significant political challenge in several nations due to the variable monetary policies and political uncertainties. Adidas must address these concerns to maintain its current global and economic standing. As Adidas' products travel the world, the corporation must deal with various tax forms and regulatory regimes. Because it lowers production costs, the company uses third-world countries to manufacture its products (Moulay, 2019). The Trump administration's tariffs on imports and exports will complicate Adidas, given that the government is the world's top exporter. Germany could lose up to €20 billion due to the bans. An organization with a global reach can deal with complex supply chain management challenges by juggling many legal requirements to meet each client's needs. As a result of these circumstances, a significant amount of time, money, and capital might be lost if they are not well protected. Figure 1: Pestle Analysis diagram used in Adidas

6 2.2. Economic Factors The sports market is exceptionally concentrated, with the 50 largest companies accounting for around 70% of the market share. Adidas is a well-known company. Economic issues such as taxation, unemployment, inflation, pay rates, and interest rates impact productivity. The company's item criteria encourage community consumers, who usually pursue a specific lifestyle. The products are marketed as things to be enjoyed rather than necessities. The entertainment industry's films and music albums compete with sporting goods. Before joining the industry, a company will look at its growth and potential due diligence. In China, Adidas produces low-cost, labor-intensive goods because of the country's low labor costs (Dominguez, 2020). Adidas must value its products, primarily when affiliated with North American items. The company's current market share and productivity may be harmed due to the rise in the sale of counterfeit goods. 2.3. Social Factors Social elements such as religion, lifestyle, and culture impact a brand's success. They have a higher impact on customer satisfaction since they influence its brand image in the sector. Adidas is primarily interested in attracting health-conscious customers and strongly desires to participate in sports (Thakkar, 2017). The more individuals devote their time and effort to a healthy lifestyle, the more demand for sports clothing. If they want to keep their current customers and attract new ones, they must keep up with the latest trends. 2.4. Technological Factors Each sports brand must adapt to the market's latest and most inventive technology to prosper in a competitive climate and maintain its leadership position. To run a business effectively, technology must be integrated into all its operations, including the product, Management, and banking systems. Adidas products must be tested in various settings to help

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7 coaches and pros improve their performance (Pandey, 2017). Rather than relying on long-term solutions, the organization relies on short-term fixes. The company has expanded its research into the intelligent sportswear industry. It has developed a comprehensive grasp of technology such as Fitbit, widely used by health-conscious communities. The company promotes its products through online sales and a prominent social media presence. 2.5. Legal Factors Adidas holds copyrights and intellectual property systems. Patents for design and security measures keep them safe from outside threats. The patents also serve as the company's legal defense against the proliferation of counterfeit enterprises in the leisurewear market, particularly prevalent. Because Adidas is a well-known brand, they have patented its products. "Three parallel equal distance strips with the same width appended to the label in either way" was Adidas' copyright for clothes, caps, and shoes in 2014. An application for patent annulment was submitted to the EU Copyright Office by Shoe Advertising Europe in 2016 (Pandey, 2017). Based on the three lines, the firm lost the legal battle because it could not prove that purchasers would associate with the Adidas brand. The corporation said the trial saddened it, but it will look into the effects of the convictions in the future. 2.6. Environmental Factors According to the company's claims, all Adidas facilities and production divisions do not produce the same restricted goods. It reduces the company's volatile and composite pollutants. 2020 is the target year for the company's green sector goals. They devised a "zero waste program plan" focused on product selection and the manufacturing process. Stop the usage of plastics that rely on oil, which reduces emissions (Pandey, 2017). Lighter or thinner also means less pollution and flammability, which is a win-win situation. The organization maintains an

8 ethical supply chain. Several guidelines have been developed to ensure that materials in every country's operations comply with this regulation. 4. SEGMENTING Segmenting Adidas's consumer base by these three dimensions will help the brand better serve its diverse customer base. The five segmentation types include Geographic, behavioral, demographic, psychographic, and firmographic segmentation. People's income, occupation, and gender are critical to the organization. Adidas products are high-end, and not everyone can buy those (Shtal et al., 2018). Furthermore, Adidas will offer a variety of items for both men and women, which makes gender a significant consideration. Adidas' products cater to those who like a particular way of life, so the behavioral aspect is critical. Customer purchasing power is also a significant consideration for customers. Customers' lifestyles and interests are also major psychographic elements. Adidas is the brand of choice for people who enjoy athletics and choose stylish and comfy things. 5. PORTER'S FIVE FORCES 5.1. Competition in the market As the world's second-largest sportswear maker and supplier, Adidas enjoys a strong following of dedicated and enthusiastic customers. The only threat Adidas faces is Nike Inc., the company's greatest rival. However, the company can rise to the top of the sportswear and accessories industry by investing in R&D and creating cutting-edge products. 5.2. The potential of new entrants Getting into this industry is difficult because of several obstacles. That is because Adidas has put money into this industry. Athletes and sports stars like Lionel Messi and Sidney Crosby

9 have inked endorsement deals with big brands to help them promote their products. If new firms want to compete with this company, they must spend on R&D and encourage well-known athletes (Grishko et al., 2020). The latest market entrants pose no threat to the business since it has successfully positioned itself in the minds of its clients. Suppliers wield considerable influence. In terms of global revenue, Adidas is a well-established company. Suppliers eagerly await the opportunity to work with Adidas. This is why suppliers have so little clout. Adidas has taken advantage of this and has established standards that suppliers must obey. 5.3. Power of Suppliers In terms of global revenue, Adidas is a well-established company. Suppliers eagerly await the opportunity to work with Adidas. As a result, suppliers wield a slender amount of influence (Grishko et al., 2020). Adidas is taking advantage of this opportunity and has established regulations for suppliers to comply with. 5.4. Power of Customers Standardized products are popular with the majority of buyers. Most buyers have yet to learn what they want in appearance and comfort. A decision is made on behalf of the customers at this point. However, clients that buy in quantity have more sway in the negotiation process (Ivanovic, 2020). The company will suffer if these vendors go out of business. 5.5. The threat of substitute products Adidas has a moderately low risk of competing with its products. A few rivals exist for Adidas' supremacy in the sportswear market (Ivanovic, 2020). However, the corporation faces a considerable risk of being overtaken by lower-cost competitors.

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10 6. SWOT ANALYSIS 6.1. Strengths Because Adidas provides customers with high-quality products, the brand has a lot of brand value. It is a well-known brand that's been around for a long time. The brand has become a part of Adidas' customers' lives and feelings (Muhamad, 2021). Adidas is one of the world's most popular sportswear and accessory companies because of its extensive distribution network. 6.2. Weakness In terms of weaknesses, Adidas is most notable for the high cost of its items. As a result, they lose money from many potential clients (Muhamad, 2021). Most of Adidas' suppliers are located in Asia. Since the demand for their products is outpacing supply, they are vulnerable to suppliers who need help to keep up. 6.3. Opportunities As individuals become more health-conscious, the sports and fitness business is booming. Adidas has a fantastic potential to reach out to this demographic. The company's investment in e-commerce might be a great asset (Shtal et al., 2018). People are more likely to purchase goods and services online in the corona era. 6.4. Threats Product counterfeiting is the company's greatest threat. These products are identical to the company's offerings. However, they are less expensive (Shtal et al., 2018). They infringe on the company's market share. Figure 2:Porter's Five Forces For Adidas in the UK

11 7. ANSOFF MATRIX MODEL The Ansoff matrix offers four product and customer-focus approaches with positive and negative outcomes. Companies can choose from various options to advertise their products to customers by analyzing the market and its activities. Two of the four techniques, market penetration, and product development, can benefit a company's revenue and profits (Jintana et al., 2021). Implementing these techniques across various regions and marketplaces enables businesses to plan their product and market expansion with the Ansoff matrix. 7.1. Market Penetration For Adidas, entering new markets would be advantageous because of the company's well-known brand and other products. Existing items and consumers will be used instead of new ones to reach new markets. The company will increase its revenue without affecting its marketing strategy by entering new areas. Adidas can expand into new markets by appealing to successful companies' customers and maintaining exceptional customer service. Marketing campaigns and discounts can also entice people to avoid using the products. Entering new markets is not necessary (Pereira, 2019). Good brand positioning in the market can lead to each of these outcomes. 7.2. Market Development While Adidas has established a significant presence in Latin America, North America, Europe, Asia and Asia-Pacific, and Europe, it is now looking to expand its operations globally and into countries where its products are not readily available. Adidas can open new markets in India, Africa, the Middle East, and other nations. There are markets where Adidas can expand with a less economic opportunity that can be identified through different brands in different regions (Agnihotri & Bhattacharya, 2018). So that Adidas can continue to develop, it will

12 implement novel tactics such as improving product consistency, altering packaging, establishing new distribution channels, and partnering with local businesses in new markets. It is also beneficial for the company to focus on new markets to grow its revenue and profits. Adidas needs to look at markets where they do not currently operate and introduce its products there. 7.3. Product Development Adidas is well-known for having a wide range of technical resources for inventing new items, allowing the company to produce new products tailored to specific target markets. Therefore, selling new products to its existing clients will boost its profitability. This strategy can be a boon as the company expands into new markets. Customers can be enticed to buy products based on their likes and dislikes (Matović et al., 2019). It must update and relaunch its older items to attract new customers and raise sales in this strategy phase. Adidas will offer similar promotions as new products are released, attracting both present and new customers. For the first time, it can identify target groups, such as young and middle-class consumers, and develop goods they like to buy locally rather than any lower-quality product. 7.4. Diversification As a dangerous strategy, diversification can result in significant losses for businesses that need to know what type of sector will assist them in making their total profits. Adidas intends to break up its business into various divisions requiring expansion into new markets, either with current items or new products, to serve its customers better. If Adidas can keep its costs under control, the long-term growth strategy could be one of the most excellent options, as long-term growth carries many legal risks. The company's financial strength necessitates carefully examining fresh savings opportunities in new areas. The next step is to make a long-term growth decision. Introducing a long-term growth strategy could jeopardize Adidas because of the high costs and decline in core market operations (Dadrasmoghadam et al., 2021). Adidas will, in

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13 2022, make money in the same process if it diversifies, but it could put the company at risk if it does not. Many of the issues that have plagued Adidas and Reebok's purchase of the brand may resurface if they can enter the business portions without further investigation. 8. MARKETING MIX 8.1. Product Ultra-boost has a wide selection of fashionable products for men, women, and children. In addition to its sports-specific footwear and accessories, it has also introduced new designs and trends. Adidas uses "The Boost technology," a cushioning system that generates one of the softest cushions for a sole to ensure the wearer's comfort. Boost technology's unique capacity to store and release energy sets it apart (Ang & Rusli, 2018). Adidas and BASF collaborated to form a solid granular substance blown up and transformed into thousands of little energy capsules. Thousands of tiny energy capsules are blown up to make the substance. When combining the two materials, wearers can enjoy optimal comfort when running or walking. 8.2. Price Adidas utilizes competitive pricing and skimming rates on its excellent design, style, and marketing strategies. While pricing existing products, Adidas employs competitive pricing to remember competitors such as Nike, Under Armor, and Puma. However, the corporation will use skimming pricing for innovative and original products (Mahamud & Hengzhi, 2020). A higher price point is thought to aid in the price-quality approach psychologically. People assume that a higher price indicates better quality; thus, Adidas rarely lowers its pricing points. From $240 to approximately is the next step in the Ultra-boost product line's price skimming strategy, which aims to increase sales by moving from high to competitive pricing. Even yet, Ultra-boost's product range's price is still high due to a relationship with another company.

14 8.3. Promotion Ad campaigns on television, print, the internet, billboards, and more are part of Adidas's marketing strategy. Adidas also sponsors numerous top athletes across a wide range of sports. It also organizes several gaming advertising, such as Sony's PlayStation. To achieve Adidas's advertising goal, all of these marketing strategies are designed to keep Adidas's visuals and brand recognition in the minds of everyone (Chimmasangkanan & Rittiboonchai, 2021). Increasingly, young people spend more time on social networking sites like Facebook and Twitter than watching television commercials. Understanding this trend, Adidas has shifted its marketing efforts to digital and social channels, especially mobile devices, to reach youthful consumers. 9. DISTRIBUTION CHANNEL Various distribution routes, such as franchises, mass merchandise, specialty stores, and internet shopping, have allowed Adidas to distribute worldwide products (myntra.com and its website). Specifically, Adidas has contracted many of its manufacturing. More than 800 independent firms throughout the world have produced its items. Furthermore, in 2016, the company had more than 2,800 retail locations, comprising 1757 stores, 902 retail stores, 152 concessions, and other locations. Adidas operates a network of branded retail locations where its products are sold only by itself (Weingarten et al., 2020). On the other hand, multi-brand showrooms that buy items from a supplier are likely to have Adidas clothes and shoes on exhibition. Company sales will rise if the company's distributors are delighted. Here is Adidas's distribution channel, as per the company: Figure 3: Adidas Distribution Channels

15 10. CONCLUSION Adidas is a well-known brand around the world that is already doing well. Focusing on threats and eliminating weaknesses is the best way to improve revenue. To keep its customers happy, a corporation should focus on maintaining the quality of its products. In addition, the corporation should expand its product categories and begin producing lower-cost products. As a result, the organization will be able to enter new markets. They must also make an effort to improve the performance of their suppliers. Delays in supply eventually lead to consumer dissatisfaction, which can damage the company's reputation. Adidas needs to take advantage of the company's prospects to increase income. The organization has much room for growth in technology and style. Adding new technology to the product will make it even more user-friendly. Covid-19 and other pandemics like it will benefit from a move to the digital world. It is because shoppers will still shop online even while the stores are closed. As a bonus, it will keep customers pleased and satisfied.

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16 REFERENCES Agnihotri, A., & Bhattacharya, S. (2018). Converse's Chuck Taylor: Future Growth of a Retro Brand. SAGE Publications: SAGE Business Cases Originals. Ang, C., & Rusli, H. (2018). The Impact of Marketing Mix 4Ps and Consumer Behavior toward Purchase Decision of Adidas Products. iBuss Management, 6(2). Beede, P. (2020). Small-Scale Sports Event Marketing Using New Marketing Concepts and Communication Tools. In Principles and Practices of Small-Scale Sports Event Management (pp. 174-191). IGI Global. Bouredji, K., Gupta, R., & Jester, G. (2020). EveryWear Marketing Plan. Chimmasangkanan, S., & Rittiboonchai, W. (2021, July). Influence of Customer Relationship Management and Marketing Mix on Consumer's Buying Decision Process in Bangkok Metropolitan Region. The 13th NPRU National Academic Conference Nakhon Pathom Rajabhat University. Cobzariu, R. M. (2021). International Marketing Plan of Simplicity Works. Dadrasmoghadam, A., Sahebkaran, M. A., Etezad, S. K., Khoshbakhti, J., & Barbaar, A. (2021). The Optimal Level of variation of Nike and Adidas Sporting Brands in Mashhad Sporting Stores. International Journal of Psychosocial Rehabilitation, 25(01). Dominguez, L. (2020). Nike vs. Adidas. International Relations Journal 2020, (39), 37. Grishko, V., Kulchii, I., Glebova, A., & Hasanova, T. (2020, June). Features of Strategic Analysis of Externals Factors of the Building Organization: Methodological Aspect. In International Conference BUILDING INNOVATIONS (pp. 651-660). Springer, Cham. Ivanovic, D. (2020). Is China the future market of Adidas? (Doctoral dissertation).

17 Jintana, J., Sopadang, A., & Ramingwong, S. (2021). Idea selection of new service for courier business: The opportunity of data analytics. International Journal of Engineering Business Management, 13, 18479790211042191. Mahamud, T., & Hengzhi, L. (2020). Behavior on Buying Adidas Shoes of Consumers in Bangkok. Channels, 1103(415.262), 142. Matović, V., Stanić, M., & Drinić, I. (2019). Impact branding on consumer preference towards buying a certain product: Comparative analysis of brands Nike and Adidas. Ekonomika, 65(3), 35-44. Moulay, I. (2019). Marketing Communication Plan for Hedgehog foods and beverages. Muhamad, F. N. (2021). Technology Entrepreneurship (ENT600): Adidas Group. PANDEY, B. C. (2017). Nike Inc.-Complete Analysis: SWOT, PESTLE, and Marketing strategy. BookRix. Pereira, D. J. N. (2019). NikeiD: A case study on footwear customization (Doctoral dissertation). Sanyajirasiti, P. (2019). Marketing plan for recreational activity. Shtal, T., Buriak, M., Ukubassova, G., Amirbekuly, Y., Toiboldinova, Z., & Tlegen, T. (2018). Methods of analysis of the external environment of business activities. Shtal, T., Buriak, M., Ukubassova, G., Amirbekuly, Y., Toiboldinova, Z., & Tlegen, T. (2018). Methods of analysis of the external environment of business activities. Thakkar, D. (2017). Assessing the digital footprint and suggesting a social media marketing plan for educational institutions. Wiengarten, F., Lam, H. K., & Fan, D. (2020). Value creation through expanding the online distribution channel. Industrial Management & Data Systems. Yang, J. (2019). Shop adidas NMD Trainers Online ZALANDO. CO. UK-apmkingstrack.com. American Journal of Industrial and Business Management, 9(3), 720-726.

ESSAY_PESTEL_SWOT_PORTER'S FIVE FORCES_ PESTLE ANALYSIS.edited

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