Adidas is a leading name in the sports shoe industry and while this industry has grown at a fast rate during the recent years, it is also known for intense competition.
Adidas is eyeing faster growth in the near future. At least, it wants to sustain the growth rate that it achieved in However, it is the 21st century and your company is just as good as your employees are. Brands are investing in their HR more than ever to gain a competitive advantage because skilled and professional employees can be a source of sustainable competitive advantage. Apart from programs for career development, it is focusing on creating an environment that successfully engages the employees and can retain them for longer.
Adidas has made several strategic changes to its business model during the recent years. This article highlights the most significant policies and processes and how Adidas has successfully used them to manage its HR capital. Adidas believes that its people make a significant contribution to its productivity. Their performance has a significant impact on brand equity, consumer satisfaction and financial performance. The People Strategy it has formulated for better management of its human resources has four pillars — attraction and retention of right talent, role model leadership, diversity and inclusion and the creation of a unique corporate culture.
However, its people strategy is also an integral part of its Corporate strategy termed Creating the New strategy. InAdidas started a talent management programs that was termed Talent Carousel. The focus of this program is to groom the employees to ready them for senior management positions for future.
Only 20 finalists make it to the final stage. The program encourages employees to be one of those 20 finalists who can start a new international and cross functional career by taking up a new role in a new location. The program is 24 months long during which the employees have the right to return home if they like. It also started a unique new method of induction whose focus is to engage the new joiners. Adidas launched an app that allows the company to engage with the new hires soon after they have signed an employment contract.
If new hires are highly engaged from day one, it reduces the complexity during the initial stages. Adidas has a digital platform Learning Campus that allows its employees globally to access learning opportunities.Before starting Adidas pestle analysis we will discuss company profile and employees. Adidas is a world leading and valuable sports footwear and apparel brand. The company designs, manufactures and markets various athletic products like shoes, clothing, shirts, bags and watches and other related accessories.
The company is operating in various geographic segments around the globe. Adidas Unique selling preposition is global recognition and quality sports products for its loyal customers from varied demographics. According to the company, those people working with Adidas are vital for the company success. Adidas has 56, number of employees who are skilled and knowledgeable.
Here we will perform pestle analysis of Adidas to analyze its external environment. You can also read swot analysis of Adidas brand. The major political issues that affecting Adidas are changing trade policies and political unrest in many countries.
Adidas has to tackle such issues in order to sustain its global presence and financial performance. The Trump administration is imposing import tariffs and restrictions. US tariffs on Chinese goods is a huge area of concern for Adidas and other athletic apparel industries with respect to increase in products prices.
Germany is a major exporter and US import restriction and tariffs can cost Germany up to 20 billion euros. Adidas has a worldwide operations that involve shipping and distribution of products and services. Adidas is unable to achieve its overall goals and objectives without improving its complex supply chain to meet international and political laws and procedure. This will help the Adidas to increase its sales, profitability and brand awareness.
Unemployment, wages rates, taxation, inflation and interest rates are those economic factors that can affect Adidas performance and profitability. Adidas and Nike both are the giants of sports footwear industry. Inthe combine concentration ratio of both brands was Adidas products are not necessity of life but focus on active life style consumer and athletes. There are noticeable fluctuations in the global economy.
Adidas marketing strategy should focus to select the markets to distribute and sell products that will help to increase Adidas market share, brand loyalty and profitability. But due to rising labor cost the company has to transfer some of the production capacity to other countries. Here rising labor cost is another economic factor to affect its performance. On the other hand, Adidas must resolve the issues related to import and export of goods.
Culture, religion, life style and preferences are those social factors affecting Adidas performance and brand image and customer loyalty. Adidas should keep in mind all the communities and beliefs when taking any decision and implanting strategy. People are becoming more and more health conscious. It means that they want to address health related issue and live an active lifestyle.Adidas has a basic vision to create affordable, comfortable, quality products for millions of people.
Adidas became a household name and one of the most successful sports brands. Their rise to fame began when runners wanted a quality shoe. The more athletes won gold medals the more business Adidas received. The consumer culture of Adidas changed when runners began winning gold medals in the Olympics.
The more athletes won races the more consumers wanted to wear Adidas. Adidas has had a powerful impact on advertising from the s to the modern day. It is amazing how Adidas managed to change consumer culture right after the Great Depression. Adidas proudly sponsors national and inter league soccer teams in almost every country in the world. For decades Adidas has been sponsoring the World Cup.
With surveys compiled from toconsumers worldwide prefer Adidas over any other sports brand. The National Basketball Association uses Adidas as their sponsor.
Adidas always chooses the best athletes to advertise their products including: Derrick Rose and Dwight Howard. An avid basketball player would love to have NBA skills to improve his handles and his shot release. Wearing their shoes give the person attributes to be better in basketball. Sports brands who endorse athletes involved in scandals like Tiger Woods makes consumers change brands. That changes consumer culture. These days consumers prefer Adidas because they endorse athletes who have admirable characteristics.
All it takes to change consumer culture is what type of people where certain brands and how they look. Adidas is changing consumer culture with the addition of Reebok and Rockport. Adidas decided to buy Rockport to add an upscale brand to their name. Adidas now has three levels of quality like social status. Reebok is the lower class, Adidas is the middle class and Rockport is the upper class. Adidas appeals to consumers who prefer to spend low, medium or high dollar for merchandise.
Those in the lower class are frugal and prefer discounted items or clearance. Adidas should be your choice of fashion because of how they advertise. Adidas is like Porsche. In the beginning Adidas was a solo brand. Now they own Reebok and Rockport.
The Economics Behind Sneakers
Porsche started as a solo car maker. They wait for the right time to expand their business. Support a business that knows how to expand better than an expert in Monopoly. Adidas should be the only brand of clothing you wear because of their advertisements.
You might have seen a recent viral photo of a group of girls wearing the same trainers. The pair in question were the Adidas Superstar — clearly the must-have brand for young women everywhere. Maybe this was something that only occurred in my school, but it was used to denote somebody who typically wore unfashionable sportswear or offensively white trainers. Kids can be so cruel. Interestingly, Adidas Originals now has more followers on Twitter than the main Adidas account, cementing its position as a truly cult lifestyle brand.
On the flip side, this also proves that it is definitely doing something right on social. Social Media Best Practice Guides. Tweeting and posting on Instagram in the run-up to shoe releases, the brand creates massive excitement and interest from followers.
Coming February 11th. Meanwhile, from Pharrell Williams to Stella McCartney, Adidas Originals is also shrewd in terms of how it collaborates with high profile personalities. Unlike other brands, who might merely use celebrities to front campaigns, Adidas put a huge focus on the personal and direct involvement of influencers in the actual designing process.
In doing so, it ensures its collaborations feel entirely authentic rather than purely sales-driven. Again, this is reflected in how it posts on social, continuously reinforcing the core topic of originality and creative and artistic expression.
Strikingly similar. Completely unique. Nothing is original except your true self. The social media campaign surrounding its release cleverly made consumers feel part of the story.
Stan yourself! Send us a selfie using stansmith — the best will get their own personalised Stan Smith tongue logo! This customer focus has been integral to the success of Adidas Originals in recent years, with the brand aiming to create conversation about youth and street culture rather than simply promoting its products.
Featuring high profile influencers within fashion and music, each one was streamed live on Facebookwhile giving fans a unique opportunity to relate to Adidas on an experiential level. Lastly, we can see how social media is not simply a one-way marketing tool for Adidas Originals, but also a way for fans and consumers to show their appreciation.
Using influence and artistic expression, Adidas Originals has managed to make its brand relevant again. By delivering its message on social media in a natural and authentic way, it has truly connected with a new and highly engaged young audience.Adidas lost touch with American tastes.
Sales have been falling in the North American market for the past three years, and investors are beginning to question the CEO's performance, The Wall Street Journal reports. Adidas was once Nike's biggest competitor in the US. But last year, Baltimore-based Under Armour rose to become the No.
Executives at the company's German headquarters lost touch with American tastes, The Journal reports. Christine Noh, the owner of New York street-wear chain Nohble, told The Journal that Adidas stopped listening to retailers' opinions on what kinds of styles would sell well in America.
The company is now working to bring more "American flavor" to its products, The Journal reports. Adidas lost major endorsement deals to Nike. In the s, for example, Adidas passed on a potential endorsement deal with Michael Jordan, believing that fans would prefer taller players, according to The Journal.
HRM & Organizational Culture at Adidas
Nike snagged Jordan instead. Thirty years later, the Jordan brand is still generating billions of dollars in revenue for Nike, even though Jordan left the NBA more than 10 years ago, according to Forbes. Nike also endorses far more American athletes than Adidas does. Check out the disparity between the brands for basketball shoes. The company's product turnaround is too slow.
The average turnaround from design to store shelves is about 18 months, which prevents the company from capitalizing on emerging trends, according to The Journal. Adidas paid too much for Reebok inaccording to a former executive who spoke to The Journal.
Reebok was struggling at the time, and Adidas had to divert money away from its main brand to improve business, former executives told The Journal. Account icon An icon in the shape of a person's head and shoulders. It often indicates a user profile.
4 mistakes that led to Adidas' downfall
Login Subscribe. My Account. World globe An icon of the world globe, indicating different international options. Hayley Peterson.You have done a great work. Thanks for making this blog. You helped me a lot on my research topic.
Keep it up guys! Say www. Great research, you just helped another high school student with an assignment in international business. Tuesday, October 14, Globalization: Adidas. When I was a kid starting to play soccer, I remember my parents would always buy me Adidas cleats. Even today, I enjoy buying from Adidas; it may just be because we have an Adidas store at our outlets.NYC's Most Influential Sneakers - Sole Origins
Adidas has both expanded and taken this world to a new level of athletics. Adidas was founded by Adolf Dassler following the company slit between him and his brother, who later established Puma. It all started when Dassler created the famous three striped football cleat and had the Germany team wear the cleats.
These cleats were lighter than the English boots many athletes would wear. From then on, the company expanded to different products such as apparel. Adidas has a specific way of targeting people, mostly sport teens. Adidas equipped 33 countries and Olympic athletes in the last summer Olympic. Adidas has contracted many famous athletes and teams to show off their brand. The company would eventually expand to 65 different counties in the world and employingpeople.
Adidas is one of the biggest companies in Europe and is the second, behind Nike, globally. Its main headquarters are in Herzogenaurach, Germany. Adidas, like many large companies outsource their jobs to developing countries. The outsourcing of jobs has led to many controversies in Indonesia and china. The positive effect of the globalization of Adidas is that it has brought many jobs to developing countries.
The bad effect would be that the workers in the factories in developing countries are not being paid fairly and the working conditions are horrible.
The companies established in China have faced many strikes against the work conditions or the amount of pay many workers are paid. This year, there have been reported incidents in the first quarter this year in China alone. In a recent study, Chinese workers are said to work from 8am to 11pm, working over the legal limit of overtime. In Adidas Chinese factories, workers are hired with temporary contracts.Adidas and Nike are the leaders in the sports shoes and apparels industry.
Both Adidas and Nike have taken significant steps to reduce their environmental impact. Both started using sustainable materials, sustainable production, and sustainable recycling. The company has announced 6 priorities it hopes to achieve by Reducing water usage, paper usage, and energy usage and using sustainable cotton are among those targets. Adidas also has teamed up with Parley to save the ocean. The company started a line of products using plastics taken from the ocean to produce sports shoes and apparel.
Reebok, as a subset of Adidas group, has recently introduced plant-based sustainable shoes that are produced from sustainable materials. Today, Nike is counted among sustainability leaders in its industry. It is also good to say that The World Economic Forum in Davos, Switzerland recognized Nike and Patagonia for their efforts in reducing waste in their process and products. Nike tries to develop new ways of production and materials to reduce its impact on the environment.
Nike is also active in recycling and investing in future technologies to preserve the environment. Sustainability is about more than the environment. Both companies are looking at the ways they impact society and communities around the world.
Adidas is investing in various programs to address some of the major social issues. Adidas is also active in providing support for refugees, developing relationships with organizations that help bring supplies into affected area by natural disasters, empowering women, and providing support for some activities related to fighting breast cancer, getting kids active by providing free preschool activities. Nike has been through the fire. About 20 years ago, many people were protesting outside of Nike stores and the media painted Nike as the villain amid child labor and sweatshop allegations.
As a result of this negative publicity, the company started to demonstrate transparency by publishing CSR reports annually from Nike implements programs to empower women and address other social issues like equality.
Adidas and Nike are the main competitors in this market, but they handle the marketing and promoting differently. Adidas seems to be proud of its sustainable initiatives.
That was a wonderful way of demonstrating of its sustainability. Nike does not want to advertise its environmentally friendly activities. The other reason might be because of the bad reputation of the past workforce scandal. If Nike claims that it is going green there might be backlash. Which one is more sustainable? Nike might do better and invest more in sustainability programs than Adidas, but I would rather buy a pair of shoes that is known to be environmentally-friendly.
The impact that these huge companies can have on the market is remarkable. If a consumer demands environmentally friendly products, companies will launch more and more of these types.
Therefore, the market might finally accept that green is cool. So, in my view, the best way to make a change in this market is by demanding green products. Or a sports jersey that is produced from recycled materials. We should be proud of using green products.