Analyzing Adidas: A Case Study

The challenges of the sneaker industry

You are required to write one essay, to address the following : 

1. How does environmental analysis influence Adidasin gaining competitive advantage? (Your answer should refer to environmental analysis tools such as PESTLE, SWOT and apply to case for identifying threats, opportunities, strengths and weaknesses) – 35 marks
   
   
2. What are the advantages and disadvantages of globalisation for Adidasand how might they change as a result of the COVID-19 pandemic? (Your answer should refer to Yips framework also and apply to case) – 30 marks
   
   
3. Critically analyse the influence of different types of Adidas stakeholder groups. Employees form part of Adidas stakeholder group. What is the corporate responsibility of Adidas towards employees and how might it be influenced by the COVID-19 pandemic? – 35 marks

The above individual marks for each question is just to reflect their importance but one single essay to be compiled encompassing all the above aspects. Citations are needed within the text of report to support all the content provided and a separate reference list also with APA 7^th style compliance to be included.

The essay needs to contain the following format.

• (approximately 200 words)
• Body (definitions of relevant terms to be provided, appropriate theories or concepts or models including diagrams to be integrated and applied to the case with considerable level of logical reasoning and analysis). (approximately 1600 words)
• Conclusion (approximately 200 words)
• Reference list.

Total Word count is 2000 words.

The essay content should reflect logical and analytical application of theories or concepts or models to the case. Application of PESTLE, SWOT, Yips framework to case in full detail can be put in tables and that will NOT be counted in word count. However, the key analysis from these models should be reflected in the main report and that will be part of the word count. 

Adidas is a multi-national sports corporation that produces, designs, and creates sport clothing and accessories. Two German brothers, Adi and Rudolf Dassler, founded the company in 1924.

There is a vast industry involved in designing, making and distributing trainers (sneakers). It is an industry where supply chains are complex, and involve an extensive network of specialized operations, each focusing on the individual components that make up the shoes. A single part could have crossed back and forwards between several different countries before being assembled into the finished product, usually by hand. Most of the making is done in Asia, where labour costs are low compared with Western countries and where there is an immense and interconnected network of specialist manufacturers employing thousands of people. Most well-known brands have tended to concentrate on the design, marketing and distribution. Adidas, like most of its rivals, subcontracted the ‘making’ part of the total process (it had not run or owned its own manufacturing operations since the 1990s) but the network of suppliers it employs spreads over more than 1,000 facilities in 63 countries.

Yet, like other similar companies, Adidas faces some problems with its Asian outsourcing model. First, growing affluence in the area has resulted in rising costs. Second, the longer and more complex a supply network, the more difficult it is to oversee every single operation that contributes to the finished shoe, which opens any company to reputational damage if a supplier employs unacceptable working practices (although Adidas has a particularly thorough set of ‘workplace standards’ to which all suppliers must conform).

Adidas believes that people are at the heart of everything they do, and they want to empower them to exercise their rights and unlock their potential. This applies to all employees as well as the factory workers in their supply chain. Taking care of the well-being of those factory workers has been crucial to their supply chain management for decades. As a core minimum, they established ‘Workplace Standards’, a supply chain code of conduct. These standards are contractually binding rules applied to their suppliers’ factories to cover workers’ health and safety and to provide provisions to ensure environmentally sound factory operations. Drawing on international law and the International Labour Organisation conventions, they follow the model code of conduct of the World Federation of Sporting Goods Industry. First applied in 1997, they revised the ‘Workplace Standards’ in 2001, 2006 and 2016 in consultation with labour and human rights groups.

Although they have innovative approaches in place to systematically empower workers in the supply chain factories, in 2016 they piloted a set of new initiatives to better understand and respond to their needs as well as to develop suitable skill training programmes for them.