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A Case Study of Adidas for Sustainable Growth

  • 11 Pages
  • Published On: 18-11-2023

Introduction

Strategic management is important for the corporate firms, in order to manage the organisational operational activities in the market, where the firms are able to strategise their business and secure future sustainable development (Lasserre, 2017). Though the strategic planning, the corporate firms can expand their business and strategise their operations through continuous improvement. The sturdy mainly focuses on analysing the strategic choice of the organisation and analyse the impacts of the strategies on the firm performance. Through this study, it is also possible to identify further tactics for the organisation which will provide a scope to the business to fulfil their objectives. In this regard, the company Adidas is considered for analysing its strategic planning in running their business internationally. Moreover, the analysis and evaluation of the strategic choices will be discusses for identifying the impacts of the strategic tactic of Adidas on their performance. In the last part of the study, there would be strategic recommendations where Adidas would be able improve their performance and secure future sustainable development.

Background of Adidas

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Adidas is a German multinational corporation, which designs and manufactures the clothing, shoes and accessories. It is the second largest manufacturer of the sportswear after Nike. It is the holding company for the Adidas Group, which also includes Reebok Sportswear Company. The major products of the company are such as apparel, footwear, sportswear, sport equipments and toiletries, which are necessary in sports (Adidas, 2020a). The organisation is also successful to serve the areas across the globe where the international operations are managed well. Total numbers of employees in the organisation are more than 57016 and the company generated revenue of € 21.915 billion in the year of 2018 and it has also maximised their net income with € 1.702 billion in the same year. Hence, the product range and the quality of the products are the major success factor behind the organisational success (Adidas, 2020b).

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The organisation is efficient to maintain the quality of their product and help the athletes and other sport person to achieve their goal. Influential campaign as well as the promotional activities of the brand is also beneficial for brand image and expanding the business strategically. The organisation is efficient to develop suitable culture in the workplace to lead the employees and serve the customers around the international markets successfully (Adidas, 2020c). The core belief of the company is to enhance the thought that through sport, it is possible to change lives. The brand image, quality products and efficient services are the success factor of the company, where the main objective of the firm is to support the athletes and gain high competitive advantage in the global sport apparel industry (Adidas, 2020d).

Impacts of strategic choices on overall business success

The mission of the organisation is to be the best sport company in the world by designing, building and selling the best sport products in the world. The company also focuses on the best service and experience where they try to conduct their business operations in a sustainable way. The major stakeholders of the company includes the customers, athletes, team members, employees, partners and shareholders, where the company Adidas always focuses on creating values for them, in order to run the business operations efficiently and retain the stakeholders for long run (Adidas, 2020a). By satisfying the stakeholders, the company is trying to manage their brand position in the market and strengthen their operational network across the globe. The major strategic choices of the company are such as,

Speed

The way to deliver the products is one of the effective success factors for the company and in this regard, Adidas focuses on putting the customers at the heart of everything they do and serving them in the best possible way, where Adidas is successful to deliver high quality sport related products safety within effective time. It is possible for the organisation to maintain good distribution network across the globe, where the products are safely distributed across the globe (Adidas, 2020b). The customers get efficient services and continuous support as well as they finds the products reliable and desirable which matches their expectation (Adidas, 2020c).

Brand expansion

In the recent era of urbanisation and industrialisation, there is global trend according with consumer perception, perspective of the individual for the quality products and buying decision. The customers are attracted to the quality products where they prefer to the products with authentic products, quality and durability (Adidas, 2020d). The company focuses on the strategy of brand expansion, where strong supply chain and distribution network are able handle their operations and secure future sustainable development. Brand expansion strategy is effective for Adidas to manage their activities and increase the markets hare across the international markets (Adidas, 2020c).

Creating good working practice

The organisation focuses on people management in the company, where the employees, staff members and managers are treated with care and continuous support. Adidas is effective to create good working culture with high collaboration and innovation, where the employees are encouraged to show their creativity and technological innovation to manage the customers and deliver the high quality sport apparel to the ultimate consumers (Holtbrügge and Schuster, 2017). In addition to this, collaborative working practice and cooperation among the managers are also effective tactics to run the business operations and satisfy the clients as well in long run (Adidas, 2020a). This is the major corporate culture, where the management team is able to enhance the internal communication as well as manage the staff successfully, the monetary and non-monetary incentives are also there to satisfy the employees and lead the staff members towards achieving the future success (Adidas, 2020d).

Product quality management

The organisational another main strategy is to maintain high quality of products, all the products such as shoes, sport apparels and clothing are in good quality and it is possible for the brand to satisfy the client in long run (Wheelen et al., 2017). The organisation focuses on utilising quality raw materials as well as maintains the environmental sustainability in manufacturing the products successfully. The organisation is also successful to maintain product portfolio and retain the customers for long run (Adidas, 2020d).

Impacts of strategic planning on organisational performance

The strategies of the organisation must be evaluated to analyse the impacts of the strategic tactics on the organisational performance. The major strategic choices of the organisation are maintain speed of delivery, maximise the product quality, creating good corporate culture and managing the distribution network (Adidas, 2020a). These have crucial impacts on the organisational working practice. Effective management of the corporate culture as well as the smooth internal process are beneficial for managing the employees, and it is considered to be a great strategy to strengthen the employee base and retain the experienced staff for long run. The organisation is also able to retain the efficient staff and manage them successfully with good working practice and clear roles and responsibilities (Kozak, 2018).

The speed of delivery is another strategy which is helpful to improve the business excellence and it is beneficial to provide high quality products and efficient services to the customers. Customer relationship management can be possible through such activity and the customers are also satisfied by getting authentic and quality products (Adidas, 2020b). On the other hand, the organisational performance is maximised efficiently where the employees try to contribute with their full capabilities and enhance the organisational performance in long run (Zagel and Tarhonskyi, 2020). The organisation is able to maximise their productivity and provide quality products to the ultimate customers within effective time. Adidas is also successful to maximise their profitability and enhance their sales volume to manage their activities in the market and strengthen their financial position. It further provides a scope to the company to gain high competitive advantage and secure future sustainable development (Schmid et al., 2018). The organisation is also able to maintain the environmental rules and legislations and it is beneficial for the firm to perform sustainably and contribute in social development. Hence, the strategic choices of the business Adidas are advantageous for the business to perform better and secure future sustainable development (Adidas, 2020c).

Evaluating the business strategy

For evaluating the business strategic planning, SWOT analysis is effective to identify the strengths and weaknesses of the organisation as well as identify the future market trend or opportunities as well as the market threat in the global sport apparel market. For macro environmental analysis, it is possible to identify the market structure for the business and through Porter’s five forces model, it is possible to analyse the macro environment. The Porter’s five forces for the organisation Adidas are analysed here,

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As per the above analysis, the strategic choices of the organisation Adidas are beneficial to run the business sustainably. The organisational choice of developing creative design and manufacturing the good quality of products and sport apparels are one of the major success factors in the market across the globe, Adidas is efficient to provide high quality products and deliver efficient services to each client (Aubert et al., 2016). There is strong employee base, which are able to manufactories the quality products and deliver the products safely to the customers. In addition to this, the organisation focuses on speed and efficacy in delivering the products which are also beneficial to attract the consumers and retain them in long run (Parmentier and Reynaud, 2018). Adidas also focuses on product diversity by manufacturing diverse range of products and provide the chance to the customers to choose the best products as per their needs and preferences. This is also advantageous for the organisation to maintain product portfolio and strengthen their consumer base across the international markets (Aubert et al., 2016). The company also focuses on managing the workplace culture with transparency and accountability so that the process innovation and working practice can be enhanced over the period of time, Adidas is able to develop corporate culture with freedom to work, flexibility at the workplace as well as manage good bonding among the employees, which further provides a scope to the organisation to manage the staff and enhance their productivity and efficacy in manufacturing the products maintaining the brand operations and serving the customers successfully (Adidas, 2020c).

Areas of improvement for competitive advantage

Through continuous business improvement, it is mandatory to develop strategic tactics for the firm so that the organisational missions can be fulfilled. As per the above analysis, the major issues related to the business of Adidas are such as lack of market share, high competitive threat and threat of substitute products in the global sport apparel industry. It would be beneficial to strategise the business of Adidas so that the mission of achieving high business growth and becoming the number one organisation for sport apparel can be achieved in future. The strategic recommendations for Adidas would be suggested further, where through continuous improvement planning, the business can improve their performance and increase market presence across the globe.

Product portfolio management

It is one of the effective strategic tactics where the product portfolio management provides a scope to the business to diversify their product category and provide a variety of product and services from which the customers can choose their products as per their personal needs and preferences. Product diversification is hereby an important strategy for market expansion, where Adidas can expand their business internally and attract the target audiences through offering new diverse products. The product portfolio must be increased in Adidas with new range of footwear and sports apparel. This would be helpful for the business to improve their market presence and target more diverse clients across the international market (Aubert et al., 2016). Through creative design as well as utilising the quality raw materials, it is necessary for the brand to renovate the products and improve the capabilities and performance of the company in the global sport apparel industry. It further provides a scope to the organisation to attract the audiences with new product range and secure future sustainable development.

Digitalisation of the business

Digital transformation is another main strategy for further expansion of the brand where it would be possible for Adidas to gain high competitive advantage and satisfy the clients in long run. In the recent era of globalisation, the customers prefer online shopping and it is beneficial for the brand to attract the consumers internally. The organisation must focus on creating innovative company website with all the information about the brand, available products and services, pricing of the products and other sustainable measures in the company (Aubert et al., 2016). On the other hand, developing mobile application is another tactic for the business, where it is possible for the business to attract the customers and manage them efficiently (Parmentier and Reynaud, 2018). Adidas must create an innovative mobile application with clear information and easily accessible options, where the customers can open their account and choose the products as per their choices. Through the mobile application, the brand representatives can handle the customer’s account and develop good corporate relationship with them. This further improves trust and loyalty among them and there would be good communication and collaboration between the customers and the organisational representatives.

Marketing strategic planning

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The organisation is efficient to invest in the marketing tactics and recently Adidas has poor marketing strategy as compared to the biggest competitive brand Nike, hence it would be beneficial for Adidas to strategise their marketing planning and promote the brand in long run. The organisation must focus on developing online marketing campaign, for promoting the products and services. It further attracts different social communities and strengthens their consumer base in long run. The organisation also should invest in the social media marketing through YouTube, Twitter and FaceBook which would be advantageous for Adidas to interact with the customers and create good bonding (Aubert et al., 2016). The organisation is also able to invest in sponsorship with different sports across the globe and it is one of the important tactics to promote their brand and attracts more audiences for their quality products and services. Content marketing tactics by developing suitable content as well as sharing the images of the products with the consumers are also mandatory for Adidas to increase trust among the customers and influence their purchase decision making behaviour. The company must focus on working as faster, smarter and more efficiently which will provide a scope to the business to promote their products and maximise branding in the sport apparel industry. The organisation is also able to strategise their promotional campaign and include the sport lovers and athletes in launching their new products in the market.

These are the major strategies through which Adidas can improve their performance and secure future sustainable development. Through continuous improvement planning by developing good corporate bonding, retaining the employees as well as staffing in the workplace, the company can implement these strategic choices and run the business operations efficiently (Parmentier and Reynaud, 2018). These are important for the brand to gain high competitive advantage in near future and fulfil the mission of the brand through branding and sustainable performance in the market. The marketing tactics and product portfolio management are beneficial for the company to satisfy the customers and create good corporate bonding with all the consumers, athletes and stakeholders engaged with the business.

Conclusion

It can be concluded that, the organisation Adidas is financially stable and is capable of investing in the new strategic planning. It is important for the brand to improve their corporate strategy to gain high competitive advantage and expand the business by maximising their profitability and sales volume. Through product diversification, digital transformation of the business and marketing planning, Adidas would be able to secure future sustainable development and strengthen their consumer’s base for the quality products and efficient services in the market. The company can ensure that the customers can get high quality sport apparels; footwear and clothing within effective time and it further provide a scope to the company to manage their internal operations and run the business successfully.

Reference List

Adidas, 2020a. History. [online] Available at: https://www.adidas-group.com/en/group/history/ [Accessed on 1 November 2020]

Adidas, 2020b. Profile. [online] Available at: https://www.adidas-group.com/en/group/profile/ [Accessed on 1 November 2020]

Adidas, 2020c. Strategy. [online] Available at: https://www.adidas-group.com/en/group/strategy-overview/ [Accessed on 1 November 2020]

Adidas, 2020d. Culture. [online] Available at: https://www.adidas-group.com/en/group/culture/ [Accessed on 1 November 2020]

Aubert, B.A., Saunders, C., Wiener, M., Denk, R. and Wolfermann, T., 2016. How adidas Realized Benefits from a Contrary IT Multisourcing Strategy. MIS Quarterly Executive, 15(3).

Holtbrügge, D. and Schuster, T., 2017. The Internationalization Strategy of Adidas. The Internationalization of Firms. Case Studies from the Nürnberg Metropolitan Region, p.19.

Kozak, D., 2018. The development of a sustainability strategy with a focus on environmental issues in the context of MNCs: the business case of Adidas (Doctoral dissertation).

Lasserre, P., 2017. Global strategic management. London: Macmillan International Higher Education.

Parmentier, T. and Reynaud, E., 2018. Strategic case: Change and change management in adidas AG (No. hal-02073700).

Schmid, S., Dauth, T., Kotulla, T. and Leding, P., 2018. Adidas and Reebok: Is Acquiring Easier than Integrating?. In Internationalization of Business (pp. 27-61). Springer, Cham.

Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E., 2017. Strategic management and business policy (p. 55). Boston, MA: pearson.

Zagel, F. and Tarhonskyi, V., 2020. How do German industrial leaders evolve their business model towards sustainability: A case study of Adidas AG and Siemens AG.


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