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Market Analysis for Adidas

Executive Summary

The paper aimed at understanding the market of Europe and Asia and the suitability for Adidas which is one of the leading brands in apparel and footwear. To know which market would be better for Adidas, a detailed analysis of current macro-environmental and geopolitical forces was carried out. The study also focused on the SWOT analysis of both the confinements to assess strengths, weaknesses, opportunities, and threats.

Contents

Executive summary.

Introduction.

European market

Asian market

Macro-environmental and geopolitical forces.

Europe.

Demographic.

Economical

Socio-cultural

Technological

Environmenta

Political

Asia.

Demographic.

Economic.

Socio-cultural

Technological

Environmental

Political

Trade and business policy.

European market

Asian market

SWOT analysis.

European Market

Asian market

Conclusion.

References.

Introduction

Adidas aims to accomplish the mission to be the leading brand of sports across the world. Adidas group is considered to be the leading sportswear, apparel, and accessories producing company in the world (Turner 2015). The company has been into this operation within the market for the last 80 years and has been providing the tradition of offering its consumers innovative, high-quality, and technically sound products. The products of Adidas are widely accessible across the world and are liked by various sportsperson. The company follows a simple strategy of operating in the market. One such strategy is to enhance the features and strengths of its products so that they can improve their differentiation strategy to compete with their rivals and earn profits and revenue.

The success and fame have been accredited to the laurels and ethics of its founder, Adolf Dassler who began producing the footwear from the limited resources obtainable in Germany and aimed at providing the best footwear to athletes. This report is going to analyze which market would be suitable for Adidas to take its place, European or Asian. The conclusion will be made based on macro-environmental and geopolitical forces, trade and business policies, and feasibility analysis using the SWOT technique, of both the markets.

European Market

The market of Europe comprises of 28 countries having approximately 500 million consumers and offers incredible opportunities to the exporters. Numerous guides are provided by the European Commission’s Export Help Desk to the exporters to make them understand the organization of the EU trade system along with the documentation needed and procedures to follow.

The principle of the product's free movement is considered to be the cornerstone of the European market that allows them to get transported and sole at any place in the EU (Moschieri and Campa 2014). The market in Europe is highly integrated as well as harmonized for goods all over 28 countries.

Asian Market

To understand the market of Asia, the marketers are required to identify that there is an existence of significant differences among ethnic groups and variations in the language. The Asian market is offering hosts of opportunities. Asia is considered to be home to a vigorous financial market that represents trillions of dollars.

Macro-Environmental and Geopolitical Forces

Europe

Europe is considered to be one out of seven continents comprising the westernmost peninsula of Eurasia which is usually segregated from Asia through the watershed divides of Caucasus and Ural mountains.

Demographic

The forces of demographics are related to people that mainly involve size, age, density, gender, statistics, and occupation. The citizens of a particular nation play a significant role in the success and survival of every business. The diverse and huge demographics provide various opportunities o the businesses along with several risks (Carvalho et al. 2016). The current population of Europe has exceeded around 7 billion and it has been anticipated that it would continue to enhance and reach approximately 10 billion by the year 2050. Moreover, it is also aging swiftly with the median age presently at 41.9 years in comparison to the median age across which is at 29.2 years.

Economical

Among the continents, the European is considered to be the largest and richest as per the measurement of assets under the management with more than $32.7 trillion in comparison to North America’s $ 27.1 trillion in the year 2008. There are around five major countries that are among the top ten largest national economies in the world in GDP (Williams and Horodnic 2015). Moreover, Europe has a huge variation in terms of wealth in all its countries. The richest country of Europe in terms of GDP is considered to be Monaco with GDP $172,676 per capita and the poorest one in Moldova having a GDP of $1,631.

Socio-cultural

Europe is considered to have a major control in terms of economics, culture, and social movement across the world. One of the most vital inventions by Europe has been the origination of the Western world, mainly Europe and the United States (Liu 2014). Europe is also regarded as the home to the greatest number of migrants considering every global region of 70.6 million people. The European culture can be illustrated in terms of a series of overlapping cultures as the existence of cultural mixes prevails all over the continent. Moreover, cultural movements and innovations also exist in Europe that are abnormal at times with each other.

Technological

The invention and application of advanced technologies led to the swift urban growth, an increase of novel working class, and mass employment (Garcia- Muniz and Vicente 2014). It has done remarkably in the field of science and technology. Sweden, Germany, Finland, France, and the UK considered being technologically advanced nations across the world. European Union is regarded as the scientific powerhouse that has made contributions significantly in science and technology.

Environmental

The majority of the most striking cities are located in Europe such as Germany, France, Italy, and Moscow (Camilleri 2015). Tourism has a vital role in the GDP of Europe. However, there are some challenges concerning the environment such as air pollution which is the risk to the people's health of Europe leading to around 400,000 premature deaths every year.

Political

The European Union is considered to be the political and economic union between 28 nations. European politics deals continually in evolving politics in the continent. The current European politics can be traced back to the event related to history in the continent. The politic of Europe is subjugated by the European Union (Pellegrin 2016).

Asia

Asia is considered to be the largest continent in the world has a total surface area larger than 8.7% of the earth. It has been ranked as the leading continent concerning the growth rate of the total population.

Demographic

The continent constitutes around one-third of the land area of the world and regarded as home to around three-fifths of the total population. China, as well as India, account for two-fifths of the population. There is an existence of a great diversity of demographics in Asia. The fertility, as well as mortality alterations, have been much smaller within the five nations of Central Asia.

Economic

Asia also has well-built purchasing power parity and has been ranked in the second position after Europe. Moreover, it has been forecasted that the nations of Asia will be overtaking the numerous leading economies across the world along with the hasty expansion of the nominal GDP of the continent. Efforts are being taken to create favourable environments for the investors to flourish within the Asian markets.

Socio-cultural

Asia comprises a massive population of about 4.3 billion and a strong human development index, education, and economic factors and significant enhancement in health. The per capita income has also increased in recent years. The population is majorly rural along with significant differences in social classes.

Technological

Technological innovations and advancement have been considered to be the central factor for the growth of the economy in Asia (Lechman 2017). The technological changes and its arrival constitutes potential for putting a hold on the policy initiatives, institutional trends, and services that unwillingly or willingly following directions of the developed nations making it exciting and intriguing to examine Asia.

Environmental

There are diverse features of climate as well as striking physical characteristics for tourism. Moreover, there is an affluent supply of natural resources. There are also several investment opportunities for potential sources for industries and multinationals. Asia has a rigorous network of inroads and roads. A convenient, fast, and easy transport system for the interior regions is also there in Asia to reach the people living in rural areas (Hugo and Bardsley 2014).

Political

The majority of the countries are swiftly changing from the conservative political system of one party to the western-style of the democratic system. Countries like Malaysia, China, and Singapore hold strongly to the one-party political system. Nevertheless, there is a constant pressure for transforming into the government system of western style. The political system has led to a favourable environment for overseas companies for investing in Asia (Burton and Wurfel 2016).

Trade and Business Policy

European market

Economic globalization has been categorized in terms of an increase in global trade along with the proliferation in the interdependency of economies globally. The trade policy of the European nation is considered to be a vital tool in responding to the issues that get posed due to globalization and also to turn its possibility into actual advantages (Saiz et al. 2017).

To have a trade policy at European Union level instead of a national level provides extra influence in bilateral negotiations as well as multinational bodies like the World Trade Organization. The main goal of the trade policy of Europe is to enhance the opportunities of trading for the companies based in Europe by eradicating barriers of the trade such as quotas and tariffs along with guaranteeing just competition.

Moreover, the trade policy of the EU protects the Europeans by making them assured that consumer protection rules are respected by imports. The trade policy is also used by the EU for promoting human rights, safety and social standards, sustainable development, and respect to the environment.

Asian market

Asia has been regarded as one of the fastest developing regions across the world for numerous decades. The Asian nations have been serving as a major engine for growth and development globally by increasing its exports and drawing foreign direct investment (Ismail and Mahyideen 2015). There has been a tremendous rise in the intra-regional cross border trade, financial flows, and investment in South-east and East Asia for the last couple of decades hence emerged as one of the independent economic zones.

Economies of Asian regions go through certain challenges like the conduction of monetary policy because of increasing international oil and food and commodity prices making trade among them set to explode. However, the nations in Asia comprises of diverse challenges in the trade. The countries are boosted by the region with the high intensity of human development and least developed countries, LDCs. The Asian countries reflect tremendous diversity concerning population, human development, culture, political systems, ecology, and religion. Due to this purpose, the International Trade Center looks for the support of these nations specifically tailor-made national projects.

SWOT Analysis

European Market

 

Strengths

Weakness

 

Internal

· Considerable enhancement in the quality of governance and institutions

· Stability in the economic growth

· Speedy convergence with European Union GDP per capita average

· Low labour costs

· Strong exports

· Price competitiveness

· High foreign direct investment

· Various trade unions, women and youth associations, cooperatives, ethnic assistance and religious firms (Bockers and Heimeshoff 2014)

· Huge development gap with the European Union average

· Comparatively deprived business environment

· Innovation levels are comparatively low

· Rate of unemployment is high

· Need for huge competitive enterprises

· Poor business-science cooperation

· Poor efficiency of fund investment

· Stumpy quality of governance as well as policy execution

· Little growth

 

Opportunities

Threats

 

External

· Partnership with the African East community in different fields

· The rise in the level of employment

· Enhancement in the business environment

· Speed of structural reforms being slow

· Reduction in the price competitiveness

· Aging population

· Low immigration and brain-drain

· Lack of coordination in long-term development policies and strategies

· Perseverance of high level of unemployment

· The slowdown of growth rate GDP

· Likelihood of middle-income trap

Asian market

 

Strengths

Weaknesses

Internal

· Best strategic location

· Ease of conducting business

· Dense population and hence number of the labour force will be high

· Better affordability as the tax system is comparatively lower

· Educated and skilled workforce

· Stable political, legal and economic environment (Kotler et al. 2018)

· Low labour cost

· Availability of resources

· Unpredictable changes within the global stock markets

· Too much population and therefore high level of poverty

· Low currency rate

· Rate of attrition is too high

· High days inventory as compared to competitors

· Poor investment in research and development (Desai 2014).

 

Opportunities

Threats

External

· The high rate of employment

· Increase in the standard of living

· The low inflation rate can bring into more market stability

· Advanced technology can be an added advantage for differentiated pricing strategies

· The slowdown of world-class investors' concerns in countries like China

· Rising strengths of the local distributors

· Varying consumer behaviour

Conclusion

From the above analysis, it can be concluded that Adidas should invest in the expansion of its business in Asia as economic growth in the continent is comparatively higher than any other continent. The population is extremely dense and speedily growing. Investing in this continent means investing the bulk of humanity. Asia has the sizable market of consumers and hence this can make international firms to expand within the Asian market. The influence, as well as the size of Asia, is larger and hence it makes it attractive for the foreign investor to invest in the Asian market. Asia experiences rapid growth in the economy. Moreover, the huge market is bound to provide exciting opportunities for investment. Countries like India and China are rapidly transforming into engines for the growth of the upcoming generation.

References

Böckers, V. and Heimeshoff, U. 2014. The extent of European power markets. Energy Economics, 46, pp.102-111.

Burton, B. and Wurfel, D. eds. 2016. Southeast Asia in the new world order: the political economy of a dynamic region. Springer.

Camilleri, M.A. 2015. Environmental, social, and governance disclosures in Europe. Sustainability Accounting, Management and Policy Journal.

Carvalho, C., Ferrero, A. and Nechio, F. 2016. Demographics and real interest rates: Inspecting the mechanism. European Economic Review, 88, pp.208-226.

Desai, P. 2014. Financial crisis, contagion, and containment: From Asia to Argentina. Princeton University Press.

García-Muñiz, A. S. and Vicente, M. R. 2014. ICT technologies in Europe: A study of technological diffusion and economic growth under network theory. Telecommunications Policy, 38(4), pp.360-370.

Hugo, G. and Bardsley, D. K. 2014. Migration and environmental change in Asia. In People on the Move in a Changing Climate (pp. 21-48). Springer, Dordrecht.

Ismail, N.W. and Mahyideen, J. M. 2015. The Impact of infrastructure on trade and economic growth in selected economies in Asia.

Kotler, P., Keller, K. L., Ang, S. H., Tan, C. T. and Leong, S. M. 2018. Marketing management: An Asian perspective. Pearson.

Lechman, E. 2017. Technological substitution in Asia. Routledge.

Liu, Y. D. 2014. Socio-cultural impacts of major event: evidence from the 2008 European Capital of Culture, Liverpool. Social Indicators Research, 115(3), pp.983-998.

Moschieri, C. and Campa, J. M. 2014. New trends in mergers and acquisitions: Idiosyncrasies of the European market. Journal of Business Research, 67(7), pp.1478-1485.

Pellegrin, J. 2016. The political economy of competitiveness in an enlarged Europe. Springer.

Sáiz, M. C., Azofra, S. S., Olmo, B. T. and Gutiérrez, C. L. 2017. Trade credit, sovereign risk and monetary policy in Europe. International Review of Economics & Finance, 52, pp.39-54.

Turner, T. 2015. German sports shoes, basketball, and hip hop: the consumption and cultural significance of the Adidas 'Superstar', 1966–1988. Sport in History, 35(1), pp.127-155.

Williams, C.C. and Horodnic, I. A. 2015. Evaluating the prevalence of the undeclared economy in Central and Eastern Europe: an institutional asymmetry perspective. European Journal of Industrial Relations, 21(4), pp.389-406.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Marketing Assignment Help

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