Executive Summary
The economic crisis caused by the coronavirus pandemic adversely affected the activity of Adidas, and the newly developed plan under the name “Own the Game” presents an example of an optimal solution. It is based on previous experience alongside the emerging risks while being supported by theoretical and conceptual models relied on in the past. Thus, the business uses broad differentiation and multi-brand strategies as the basis of its innovations and addresses environmental factors in a timely manner. However, in order to claim the feasibility of similar approaches for other organizations, it is critical to thoroughly assess their actual capabilities since this area might present significant risks. It is suggested that the models implemented by Adidas should be taken into account due to their efficiency but analyzed when used in other fields.
Introduction
Long-term initiatives concerning business development with regard to the continuously changing market environment are the main focus of present-day companies, and Adidas is no exception to the rule. The success of similar projects is generally conditional upon their correspondence to the formulated goals. In the case of the company under consideration, the recently elaborated strategic objectives 2020-2025 under the name “Own the Game” are an example of an effective combination of these components. In other words, solutions and their correlation with the overall course of expected development are guaranteed and, therefore, viewed by Adidas’s representatives as an appropriate framework for overcoming the economic crisis caused by the pandemic (Adidas Group, 2021c). However, the approach adopted by them is easily applicable to other businesses in a difficult situation since the company heavily relies on common theoretical models and concepts (Mahdi et al., 2015). Therefore, a careful examination of the mentioned plan of Adidas can demonstrate optimal decisions beneficial for other organizations in the field.
Overview of the Strategy
The principal focus of the newly developed strategy of Adidas is flexibility in all operations and interactions between the stakeholders. This standpoint is supported by the way the company strives to implement its vision by aligning the elements of the five-year project to people’s current preferences (Adidas Group, 2021b). Hence, the initiative is mainly oriented on consumer experience, which is expected to be improved through the creation of products for both athletes and individuals who want to lead a healthy lifestyle (Adidas Group, 2021a). The core of the strategy is the promotion of five areas, “football, running, training, outdoor, and lifestyle,” implying setting the limits to variety in order to provide better quality over a short period of time (Adidas Group, 2021a). In addition, the projected success is achievable due to the consideration of categories of consumers with varying needs. For instance, female buyers are to be attracted by a customized offer as per the surveys speaking of their particular interests in sports and leisure (Adidas Group, 2021c). The described benefits for customers are deemed to be sufficient for ensuring their loyalty to the brand in the future.
These solutions are complemented by increasing the accessibility of goods through digital transformation and the entry to new markets, which, in turn, will allow enhancing the profitability of Adidas in the long run. From the business’ perspective, the projected growth is conditioned by a significant increase in sales, adherence to the principles of sustainability to meet everyone’s needs, and investments in people (Adidas Group, 2021a). These aspects are directly connected to the difficulties caused by the ongoing pandemic as they are taken into consideration for eliminating the essential risks (Adidas Group, 2021c). Thus, the capability to sell more items can be increased only in the case if customers are willing to buy goods which are attractive due to their strict correspondence to personal taste and easily accessible (Adidas Group, 2021c). The human factor is also addressed by the creation of a culture in which people’s preferences take the central place. In other words, a flexible approach to the needs of all stakeholders alongside a continuous expansion of activity can lead to better results.
Theoretical and Conceptual Underpinning of the Strategy
Applicable Theoretical Models and Concepts
The intended practical implementation of the discussed decisions of Adidas positively correlates with theoretical models and concepts used by this company throughout the history of its existence. Thus, the previously emphasized broad differentiation strategy laid in the basis of the company’s activity is currently supported by the strategic choices under “Own the Game” projects (Mahdi et al., 2015). In other words, the idea of creating an offer distinguishing the business from its main competitors is at the core of this initiative as it is directly linked to the aim of introducing unique products (Adidas Group, 2021a). These innovations are complemented by the expansion of activity in other countries and improvements in infrastructure as per a multi-brand strategy (Madhi et al., 2015). This provision is supported by the introduction of new categories of goods for new customers who are likely to be attracted to them (Adidas Group, 2021c). In this way, the competitive advantage of Adidas, regardless of the emerging challenges, is ensured by relying on the modes of operation which proved to be effective in the past.
Business Model
The discussed theoretical approaches and their practical use by Adidas are efficient due to the selection of appropriate tools in accordance with issues which are to be resolved. Meanwhile, their implementation is facilitated by the presence of a business model which is in alignment with the mentioned targets. As follows from the analysis conducted by Mahdi et al. (2015), the combination of innovation and consumer needs forms the priorities of the company in long-term projects. The value of the offer is guaranteed by “a high-performance product line” as a single focus during a time period under consideration (Mahdi et al., 2015, p. 172). In contrast to the idea of investing in the existing products, the company’s managers tend to substitute them with more suitable alternatives. Even though this approach might seem risky, time-consuming, and not underpinned by empirical data at the initial stage of development, its outcomes have been confirmed to be optimal for remaining competitive (Alsbiei, 2015). Since Adidas continues to rely on it and even expects a drastic increase in profits, it can be viewed as the main condition for the business’ survival.
Environmental Factors
In the past and present, Adidas attempted to achieve growth by paying particular attention to the environment, and similar orientation is used for the project under consideration. While being a strong competitor, the company has significant weaknesses which it aims to address within this initiative. For instance, the limited supplier power reported by previous studies is compensated for by promoting cooperation within the value chain with regard to specific objectives, such as climate neutrality (Alsbiei, 2015; Adidas Group, 2021c). In turn, the uniqueness of the offer, which is guided by the consideration of the high capabilities of Adidas, is accompanied by a threat of the lack of acceptance of the innovative options (Alsbiei, 2015). Therefore, “Own the Game” explicitly emphasizes the importance of customer preferences, as can be seen from the examination above. Their analysis seems critical for the program since flexibility in operations is unlikely to be sufficient for addressing the risks stemming from the possible lack of interest in the products.
Focus on Employees and Consumers: Diversity and Inclusion
Another theoretical aspect supporting “Own the Game” as a primary strategic course of Adidas for surviving during the pandemic is the particular attention to people. In this respect, the needs of both employees and consumers are examined because investing in them is one of the main approaches adopted for increasing satisfaction (Adidas Group, 2021a). Hence, the diversity of the affected groups and inclusion of all individuals in the process are highlighted in the program as another method for promoting the uniqueness of the business (Adidas Group, 2021a). This idea is beneficial for eliminating the threat in terms of dubious brand loyalty when innovating and introducing untested solutions discussed in the previous sections. Indeed, the ongoing digitalization of all regular operations of Adidas cannot be successfully implemented when neglecting cultural characteristics. In this case, leadership, betterment, and performance emphasized as the main orientation when uniting people are crucial for increasing profits (Adidas Group, 2021c). This aspect is useful for guaranteeing the coordination of efforts while distinguishing between the markets and their respective conditions.
Practical Application of Strategic Elements
Lessons from Adidas’s Approach
The conducted analysis of Adidas’s strategic plan known as “Own the Game” showed that its main feature is reliance on previous experience and, consequently, methods which led to success in the past. Since they are proven by the test of time, one can adopt similar instruments for dealing with economic crises in order to minimize financial losses in the long run. In this case, the most beneficial idea is to focus on a limited number of products or services instead of investing in those which are not immediately required. For Adidas, this solution was applied to the product lines developed with regard to people’s interests (Adidas Group, 2021a). For other businesses, it can be customized depending on their activity while orienting on the overall feasibility of solutions.
Another lesson one can take from Adidas’s approach to managing difficulties is the necessity to improve accessibility in order to form an extensive customer base. In the situation of the company under consideration, the decision was implemented with regard to the realization of products, both in the wholesale and retail departments (Adidas Group, 2021a). In the past, this method was reported to be effective for commercial activities and brand marketing of Adidas (Mahdi et al., 2015). Therefore, the organizations struggling with the awareness of potential clients regarding the rendered services can significantly benefit from following their example and digitalizing operations. This idea, alongside setting the limits to the number of options available to the public, seems advantageous for guaranteeing minimum losses and better chances for survival in the shifting market environments.
A Link Between Adidas’s Ideas and Their Implementation
Considering the examination of theoretical and conceptual ideas underpinning Adidas’s strategic intent conducted in the previous sections, one can establish a link between these provisions and their practical implementation for any business. Thus, broad differentiation strategy as the main direction of innovations used by the company is an approach suitable for other organizations which possess the capabilities to invest significant funds in entirely new product lines. The same applies to Adidas’s activity in expanding their operations and entering new markets since these ideas can be imitated by others regardless of the field. In other words, innovating with respect to the shifting preferences of customers and their cultural characteristics is a measure available to all entities. Meanwhile, these solutions, despite their feasibility, are not suitable for small businesses as they do not have sufficient funds and can benefit only from the idea to change focus to more profitable operations within their scope of activity. From this point of view, the only uniform solution for all businesses, regardless of their resources, is to develop flexibility in making timely choices.
Conclusion/Recommendations
In conclusion, the examination of Adidas’s strategic plan “Own the Game” showed that the decisions developed by this company are not only effective and based on its vast experience but also useful for other companies. More importantly, the solutions, including the creation of a product line corresponding to the existing customer needs and digital transformation for greater accessibility, were underpinned by theoretical frameworks. They were broad differentiation and multi-brand strategies complemented by continuous innovations and particular attention to the shifting market conditions. In addition, the projected success of this initiative was underpinned by diversity and inclusion as the main conditions of stakeholder satisfaction. These provisions inform other businesses’ actions in similar situations; meanwhile, generalizations are not possible due to the differences in available resources and general capabilities. Therefore, further research in the companies in this respect is needed. It will help determine the characteristics which can prevent a positive outcome or generate additional risks to suggest introducing similar innovations.
References
Adidas Group. (2021a). Adidas presents growth strategy ‘Own the game’ until 2025. Web.
Adidas Group. (2021b). ‘Own the game,’ our strategy 2025. Web.
Adidas Group. (2021c). Strategy. Web.
Alsbiei, O. (2015). ADIDAS GROUP strategy analysis. Research Gate. Web.
Mahdi, H. A. A., Abbas, M., Mazar, T. I., & George, S. (2015). A comparative analysis of strategies and business models of Nike, Inc. and Adidas Group with special reference to competitive advantage in the context of a dynamic and competitive environment.International Journal of Business Management and Economic Research, 6(3), 167-177. Web.