Adidas Company: Swot, Ethical Approach, and Management Principles

This document provides an in-depth analysis of Adidas Company, including its Swot analysis, ethical approach, and management principles. It discusses the company's legacy, collaboration, weaknesses, opportunities, threats, and provides recommendations for future growth.

RUNNING HEAD: ADIDAS COMPANY
Adidas Management

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Table of Contents
Introduction...........................................................................................................................................2
Swot of Adidas.......................................................................................................................................3
Strength.............................................................................................................................................3
1. Legacy and heritage................................................................................................................3
2. Diversified...............................................................................................................................3
3. Collaboration and memberships.............................................................................................3
Weakness..........................................................................................................................................3
1. Premium price range...............................................................................................................3
2. Outsource manufacturing.......................................................................................................4
Opportunities....................................................................................................................................4
1. Changing lifestyle....................................................................................................................4
2. Expansion in the product line..................................................................................................4
3. Backward integration..............................................................................................................4
Threats...............................................................................................................................................4
1. Competitions...........................................................................................................................4
2. Government regulation...........................................................................................................4
Ethical Approach....................................................................................................................................5
CSR Approach........................................................................................................................................5
Exemplary business behaviour..........................................................................................................5
Key Elements.........................................................................................................................................6

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Company cultural..................................................................................................................................7
Concept of management principles, and organisation structure in Adidas...........................................8
Traditional and contemporary theory of leadership in Adidas..............................................................9
Recommendations for the future growth in the company..................................................................10
Conclusion...........................................................................................................................................11
Bibliography........................................................................................................................................11

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Introduction
Adidas is a multinational corporation that was founded in the year 1949 and
headquartered in Herzogenaurach, Germany. The main business of the company is to design
and manufacture clothing, shoes, and accessories. Globally it is the second largest sportswear
manufacturer whereas in Europe it holds the first position. Adidas logo consists of three
strips, which are used as the identity for their clothing and shoe design as a marketing aid
(Piller, 2012).
The company was started by the Adolf Dasslerin, he was joined by his brother Rudolf
and named the company as Dassler Brother Shoe factory. Dassler focused on the growth of
the spiked athletic footwear, by transforming the previous of metal to utilizing canvas and
rubber (Fredberg, 2011). However, after sometime conflict arises between two brothers and
become a rival. This will focus on the company culture, ethical approach and its swot with
various recommendations which can help the company to enhance its growth.
Swot of Adidas
Strength
1. Legacy and heritage
Since the year 1949, the company has travelled a long way to establish itself as a
youthful brand.

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2. Diversified
The company has various products portfolio with various ranges if accessories and
footwear.
3. Collaboration and memberships
Company has a strong relationship within the sustainability area such as the
International Labour Organization, International Finance Corporation that has given an edge
over the rivals to sustain a sustainable business (Deac, 2014).
Weakness
1. Premium price range
Due to the high process of the products have resulted in affordable to limited
customers only.
2. Outsource manufacturing
93% of the production has been outsourced to the third party, which increase the
dependence of the company on the third party. Overall the quality of the product received by
the customers is one of the bases concerned (SHTAL, 2018).
Opportunities
1. Changing lifestyle
Due to change in lifestyle have resulted in the steep rise in the demand for premium
goods.
2. Expansion in the product line
By following this strategy, it can help the company to bring new opportunities and
differentiate itself from the competitors.

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3. Backward integration
This strategy can help them to protect their patent right and integrated their research
and development.
Threats
1. Competitions
Company has various competitors such as Nike. Despite the competitors, there are
various substitutes.
2. Government regulation
As 93% of the products are outsourced, import regulation, duty, and tariffs play an
important role in pricing (SHTAL, 2018).
Ethical Approach
One of the ethical approaches, which can be taken considered by the Adidas
Company, is Utilitarian approach. The Utilitarian Approach helps in accessing the results;
i.e., the overall benefits and costs to all stakeholders on a personal level. It states that every
individual interest should be considered equally while making a decision. In an Adidas
context, this approach might depend on a statistical examination of probable results, a classic
costs/benefits valuation, and/or a concern of the marginal utility of concern for various
stakeholders in the group. This will result in providing an ethical environment in the
company environment (Conway, 2013).

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CSR Approach
Exemplary business behaviour
Companies which use this approach of CSR truly “walk the walk” of CSR.
Companies which use this approach not only gives the example of social responsibility but it
also helps the various stakeholders i.e., society and consumer. They also influence the social
and economic trends which help in managing their stakeholders. Nowadays corporation has
become the most powerful institutions. This help in focusing on the economic responsibility,
which facilitates the long-term growth of the company and by balancing the economic and
social responsibility, results in the overall effect on the society and stakeholders.
Companies which use this approach of CSR truly “walk the walk” of CSR.
Companies which use this approach not only gives the example of social responsibility but it
also helps the various stakeholders i.e., society and consumer. They also influence the social
and economic trends, which help in managing their stakeholders. Nowadays corporation has
become the most powerful institutions. This help in focusing on the economic responsibility,
which facilitates the long-term growth of the company and by balancing the economic and
social responsibility, results in the overall effect on the society and stakeholders (Flammer,
2015).
Key Elements
The four key elements in a business there is necessary to include these four key elements
which can help the company to enhance their success.
 Financial
 Operations
 Customer service

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 Research/knowledge/education
1. Financial
The financial shortcoming in the business can overall affect the performance of the
company. The success of the company depends on financial support. The financial support
the company will help the more possibility of the success arise. Financial burdens, the
shortcoming of cash, overhead, an increase in the cost and decrease in the revenue are some
of the basic concern which can lead to break a company back.
2. Customers service
Customers are said to be the god for the business. If then customers are unhappy from
the facilities provided by the company then it does not contribute towards the success of the
company. Customers satisfaction is one of the main key components for the success of the
company. From recent times, it is true that a happy customer can multiply into any customers,
but one unhappy customer can restrict the growth and can result in a decrease in sales and
profit.
3. Operations
Innovative technology is the major source of the companies which help them to move
toward success. Various competitors use innovative technology to deal with rivals. If the
company does not adopt the innovative technologies and process then it can restrict the
growth of the company. So it can be summarized that not keeping up the technology
surrounding, a business can place behind the rest of the pack and result in sales to dwindle.
4. Research/Knowledge/Education

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The company should always keep themselves up to the knowledge a should always
adopt those techniques which can help the company to maintain optimum efficiency. If the
proper knowledge, research, and education are not taken by the company then it can result in
the loss of profits and wasted efforts as well as mineral (Rosemann, 2015).
Company cultural
Confidence
Confidence cultural helps the company take a quick decision. In terms of the athletes,
it enhances their decision taking the process to take quick decision. Confidence helps the
company to deal with the customers effectively and efficiently. Adidas can apply this to
acknowledge that they do not have all the answers to the questions of the people. But by
applying this company can reflect that they are willing to take risks, and trying new things.
And this will result that if the company fail the will help in improving their learning for a
future project (Adidas, 2019).
Concept of management principles, and organisation structure in
Adidas
In any organisation, management principles play a vital role in terms of impact on
the decision making of the organisation and other activities. The concept of unity of
command states that the subordinate members of any organisation must be held responsible
to only one superior or authority. It has been found that the unity of command establishes
effective and efficient mobilisation of the teams to attain goals and objectives. On the other
hand, the concept of centralisation and decentralisation are also vital as they determine the
power or authority, with context to the role of top management and other members of the
organisation (Goetsch, 2014).

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In Adidas, several groups has been formed that implies each subordinate or
employee is responsible to only one superior, and this helps managers attain effectiveness at
work. This also avoids the issues of ambiguity in the work, or roles and responsibilities to be
performed in the organisation. Furthermore, discussing about the decision-making approach,
the company Adidas follows a decentralized approach of decision-making, in their
organisation which determines a rational way of taking appropriate actions. Decentralisation
in an organisation refers to the process where the decision-making authority is divided or
distributed in the larger group or amongst organisational members.
The managers in the firm adopted this approach with the aim to deliver value in a
short period, in a sustainable manner. One other aspect that has been considered important
in any business is span of control. The term is defined as the number of subordinates under
the control of a supervisor. The company must focus on adapting to the broad span of
control in the organisation. This has a positive impact on the organisation, as it will improve
the communication amongst the employees, and will therefore improve their productivity.
Adidas can achieve a broad span of control through the aspect of delegation of authority, and
decision-making amongst different levels and departments of the organisation.
To operate and function effectively, the managers must focus on establishing matrix
organisational structure. This is found to be the most appropriate structure due to the reason
that it develops cohesiveness in the organisation. Here, different divisions and department of
the company will attain efficiency by working together in collaboration. Now four strategy
factors have been considered vital for choosing the matrix structure of organisation in
organisation. The four strategy factors that considered optimising matrix structure include
clarity, understanding, decentralisation, stability and the adaptability to different aspects or
changes in the organisation.

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Traditional and contemporary theory of leadership in Adidas
The concept of traditional leadership style is defined as the situation whereby the
leader is provided with the power based on the past traditions or norms. In context to old
traditions, and norms several styles or approaches has been used such as trait theory,
charismatic and behavioural style. Trait theory has been observed to be in practice in earlier
years in the company. The trait theory of leadership refers to an assumption where the
leaders are born, and they possess unique qualities. Adidas believed that certain leaders are
born, and they contribute to the excellence and success of the organisation.
On the other hand, contemporary leadership theory refers to the leadership, which is
based on the aspects of mutual influence and common goal to be achieved. Therefore, the
company implemented contemporary leadership involves collaborative leadership or
transformational leadership. The CEO or the leader of the company, Kasper Rosted adopted
a balanced approach or style of leadership with the dynamic perspective, focused on driving
high performance and success of Adidas. This stated about the ‘collaborative’ or
transformational approach of leadership. The company is heading or transitioning towards
the collaborative approach of management. This includes the use of people pulse tool that
analyses the engagement of people or employees in an organisation. Adidas through
implementing collaborative leadership emphasizes the functional and organisational
boundaries.
The three core elements i.e. collaboration, creativity and confidence constitutes the
framework of the leadership behaviour in the organisation. The framework of collaborative
leadership is not only based on the role or contribution of HR, rather it is the effort of each
individual at different levels. It has been analysed from the reports and other research that
leadership and motivation acts as major strength of Adidas. The right type of leadership has

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been implemented ensures a diverse work force and involvement of employees which
provides them sense of value or importance. This style of leadership helps in coordinating
with the varied interests of the employees working in the organisation with the
organisational objectives. Adidas focuses on the management of their employee performance
through motivating them towards showing high commitment to the organisation. Abraham
Maslow’s need hierarchy theory of motivation has been found relevant to the organisation.
The managers provide feedback, and conducts development programmes and conversation
with their employees, to assist them attain better performance at work. This determines one
major strategy used by the company to motivate their employees in the organisation
(Kenner, 2011).
Recommendations for the future growth in the company
Now, the discussion will state recommendations for the company to make
improvement in their strategic performance or progress in the next five years. One of the
ways or strategy that company can emphasize includes sustainability in the firm.
Furthermore, to enhance the quality and image of the brand, they must focus on their product
innovation strategy. This will surely lead to the progress of the company in the future years.
The managers of Adidas can also focus upon their market segmentation, strategy and
introduce their brands in different markets. This will ensure attracting large number of
customers due to their high quality products, and will ensure greater sustainability and growth
in the next five years.
Conclusion
To conclude the above analysis of the management in Adidas, it has been found that
the company attained great success over period. The discussion in the report has mentioned

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several concepts of management, and leadership theories adopted by the firm. This has been
resulted into improved performance at various levels, and departments ensuring better
coordination of activities. The concept of decentralisation and motivation of employees has
been vital to high employee engagement, and communication in the firm. However, few
recommendations have been also enlisted in this report, to gain progress in the future years.
Hence, the company has been a leading sportswear brand in the industry, and continues to
attain growth in the long-term.
Bibliography
Adidas. (2019). CULTURE. Retrieved from adidas-group:
https://www.adidas-group.com/en/group/culture/
Conway, P. &. (2013). Deontological and utilitarian inclinations in moral decision making: a
process dissociation approach. Journal of personality and social psychology, 216.
Deac, V. &. (2014). Strategic segmentation-The preamble of developing a company strategy.
Revista de Management Comparat International.
Flammer, C. (2015). Does corporate social responsibility lead to superior financial
performance? A regression discontinuity approach. Management science, 2549-2568.
Fredberg, T. &. (2011). The paradox of tie strength in customer relationships for innovation:
a longitudinal case study in the sports industry. R&D Management.
Goetsch, D. L. (2014). Quality management for organizational excellence. NJ: pearson.
Kenner, C. &. (2011). Adult learning theory: Applications to non-traditional college students.
Journal of College Reading and Learning, 87-96.

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Piller, F. T. (2012). Mass customization at Adidas: Three strategic capabilities to implement
mass customization. SSRN .
Rosemann, M. &. (2015). The six core elements of business process management. Springer,
Berlin, Heidelberg.
SHTAL, T. V. (2018). Methods of analysis of the external environment of business activities.
Revista ESPACIOS.

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