Adidas Sustainability & Business Strategy

This assignment analyzes Adidas's successful business model by exploring its commitment to sustainability through initiatives like the Green Company program. It examines their strategic approach to supply chain management, brand promotion, and customer engagement, highlighting key factors contributing to their global leadership in the sportswear industry.

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CASE STUDY: ADIDAS SUSTAINABILITY PRIORITIES
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Adidas sportswear company overview
Adidas is a high end athletics Germany multinational company that came into existence
in 1949. It is based in Herzogenaurach and specializes in shoes, clothing and accessories. Adidas
is the largest sportswear in Europe and the second largest in the world. The company commands
$ 19.29 billion total revenue and serves as a major company in the global supply of team kits. It
also holds the decorum of the bestselling boots company in the football world. Adidas enjoys a
strong brand loyalty (Yu, 2017, P. 235). This sportswear company controls a staff of
approximately 60,000 producing more than 840 product units annually. The second largest
sportswear company works under a slogan that ties all its brands together to unite its clients who
are interested in sports, music, fashion and pop culture. Adidas takes pride in striking a balance
between shareholders expectations, employees concerns, and other workers within their supply
chain, customers, and the environment at large. The company overhauls the need of remaining
significance within its surroundings therefore stresses on responsible business and commitment
to respect human rights for a successful lasting economic impact. Adidas strives to become a
more sustainable industry with a dynamic growth pattern. To achieve this, the management has
continuously improved its innovative and technological skills, set a pace for sustainability, and
established alternative ways of overcoming bottlenecks through sustainable strategic plan.
Adidas competitive advantage
Adidas uses the concept of added value to influence its customers. The management has
directed its efforts towards maintaining quality for its customers to beat its rivals such as Nike,
Puma and Timberland. The company uses strategies such as technology advancement and
innovation, intense marketing promotion, and customer involvement (Marken, 2016, P.4).

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Technology advancement and innovation
Adidas is a successful enterprise that invests in technological advancement and
innovative ideas to enhance excellent product development. This is a strong competitive
advantage that works for the good of the company. It has proven hard for competitors to beat
Adidas (Kuşay, 2014, P. 40).The high degree of orientation to technology has created a strong
brand value for clients placing the company at the top of the bar over its opponents.For example;
the high performance sports shoe that meets consumers’ needs.Ideally, technology superiority
has tailored Adidas.
Intense marketing promotion
The company also uses intense and integrated marketing promotion to find its way in the
market share. Equally, dynamic branding through celebrity advertising and sports idols has
generated a steady flow of income to the company since consumers tend to appreciate the quality
of the products once they know there is an association with influential personalities which serves
as an extra motivation. For example, use of top athletes, high performance apparel, shoes,
marketing departments, and other sports products create an impulsive move that generates high
sales and company growth (Shank, 2009 ,p. 69).
Customer involvement
Adidas has a competitive level of customer involvement in its operations. The company
enjoys strong brand loyalty. Customer’s feedback gives the company a distinction that enhances
it to maintain a long term relationship at the least price possible. Listening to customers closely,
doing a comprehensive market research on their tests and preferences, online and on market
interaction equally contributes to this overwhelming success (Lebron, 2010, P.20).

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Adidas sustainability priorities
Adidas has identified seven strategic priorities to address issues and challenges facing it.
The holistic approach suitable for Adidas Company would heighten responsibility across its
entire supply chain with tangible goals ensuring that sport remains a source of happiness to all
stakeholders. These strategic priorities are; water efficiency, innovation of materials and
processes, energy conservation, carbon emission control, building capacity, health improvement,
and stakeholders’ engagement (Aboulian, Charnley, & Watkins, 2008, P.200). The management
believes in creating an exciting future in the sporting industry due to the massive growth of the
sport worldwide. Adidas believes in changing lives through sports and fashion.
Innovation of materials and processes
Technology advancement and innovation is one of the competitive advantages associated
with Adidas. The company has invested much in creating new brands that connects it to the
consumers hence a strong market position. The management of Adidas Company has
necessitated this through conducting a thorough market research to establish gaps and need. In
doing so, the company has emerged as the best in sports wear by appealing to customers’ tests
and preferences. To achieve that, Adidas uses three strategic choices which are; speed, cities, and
open sources. Speed is for timely production, open sources to allow interaction with consumers,
partners, and athletes and make them part of their brand and cities for growth and sharing market
and brands. With commitment, dedication, and team spirit, Adidas manages to use its innovative
skills to establish new benchmarks and products (Wiley. 2017, p.98). Additionally, the
sportswear company has managed to use environment friendly manufacturing techniques in

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production process that has shelved environment harm. For example, ensuring there is low waste
and sourcing sustainable cotton.
Health improvement strategy
As a multinational company, Adidas ventures in new markets maintaining a progressive
level of quality. Consumers and employees safety and health is paramount to ensure there is a
constant production and supply to help in maintaining the global supply chain. Therefore, the
company has taken the initiative of protecting their staff against hazardous issues such as
inhaling corrosive chemicals that would be harmful to their breathing system and skin as well
among other precautionary measures. For example, employees are given masks to prevent
inhaling dangerous gasses. The management runs safety programs to all its staff members across
the globe to ensure they are free from harm. In manufacturing department, the staff is issued with
helmets to prevent accidents and any sort of harm. Adidas has extended its health program and
training to its sourced suppliers in Philippines, Cambodia, Thailand, Brazil and Argentina.
Consequently, the system has managed to roll out approaches to improve health and safety
within the company’s supply chain. Health training officers equally monitor and report s on
volatile organic compounds at footwear factories (Cordón, Hald, & Seifert, 2012, p. 13)
Stakeholder engagement
Adidas Company believes in engaging its key players in its activities to broaden its
competitive advantage. The company therefore builds strategic partnership with governments
within which it operates international agencies, and civil societies. Such a move is championed
with its diverse nature of operation thus attracting a wider pool of people linked to its success
(Aboulian, Charnley &Watkins, 2008, pp. 214). The standing objectivity of such associations is

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to improve social and environmental conditions within its reach. Fundamentally, Adidas is
dedicated towards enhancing supplier self governance and enforce capacity at community level.
To achieve this objective, the management opted for partnership with other team players who
posses requisite skills, experience, and capability to improve workplace conditions, provide
training, and offer solutions to staff members and the management through practical approaches.
For example, in 2008, Adidas reached out to Vietnam’s Chief Technical Advisor for industrial
relations. Similar year, Adidas partnered with Marie Stopes International, a reproductive health
specialist for HIV/AIDS training for workers in the company’s supply chain.
Partnership with others stakeholders however came with challenges such as language
barrier, relationship process hurdles, high costs of sustaining the effort over a long term,
government interference , child labour, slow execution of action plans since decisions are made
by a chain of people, limited available internal resources, and inability to address international
economic fundamentals. These hurdles may strain relationships between individuals, parties, and
states creating rifts due to conflict of interest and nationalism.
Building capacity
The management gives opportunities to employees to express their concerns, thoughts,
and opinions. This encourages team work that cultivates task culture where each member plays a
role. Additionally, Adidas emphasizes on communication channels to pass information from all
levels. Due to its huge size, communication is done at regional level at Liaison office and
factory level. The company has also invested in internet communication that connects employees
throughout the regions opening a platform where they can share ideas and conceptualize them for
individual growth as well as the organization. This open communication strategy acts as a

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motivation therefore employees make a great contribution to the business. The free flow of
information and ideas gives birth to productivity, minimizes confusion and possible conflicts.
To achieve the global lead in sport products, Adidas depends on talents, enthusiasm, and
dedication of its staff. The company therefore satisfies the employees by organizing transport to
operational centers, provides medical insurance, improves housing and social retirement funds,
provides annual bonuses to eligible workers, offers flexible working hours, supports formal work
council, allows workers to access internet while on duty, and gives parental leaves. Numerous
seminars are equally offered to increase the output level and improve quality of products and
services issued to clients.
Water efficiency
Adidas focuses on projects that will see it manage water wastage to promote social and
environmental needs. For example, the Adidas DryDye T-Shirt is a product of revolutionized
textile technology whose production does not use water at all. Adidas introduced this technology
in 2012 however since then, it has found its way in other products. Additionally, Adidas uses
better cotton that helps the production process to save up to 20% of water compared to normal
cotton. By 2018, the company plans to source 100% of this type of cotton for its production
purposes (Kuşay, 2014, P. 42).

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Energy conservation
The second world leading sportswear, Adidas, defines environmental conservation in its
umbrella called ‘Green Company’ that targets reducing relative environmental hazards. The
company has set a target of saving energy up to 20% by 2020. On its journey to reduce energy
consumption, Adidas managed 5.9 % reduction in 2011 (Cordón, & Seifert, 2012, Pp. 17). Since
then, energy has been conserved year after another. For example, for a period ranging between
2010 and 2011, ISO 14001 certified sites established a commendable reduction on energy
consumption after auditing North America’s region and implementing several action plans based
on the results. The action plans included process adjustments, retrofitting of lighting, and other
operational changes.
Carbon emission control
Carbon was reduced by 8.95 per meter square in 2011 meeting the set target. The
reduction in carbon emission is higher compared to energy. This tremendous success is attributed
to intensive offsetting programs that ran across various regions. To realize zero emission, the
company developed a Green Company initiative in 2008 to improve environmental performance
and follow up by focusing on administrative offices, production operations, distribution centers,
and manufacturing sites. The management has started follow up programs where each site
presents report on their environmental progress. Both employees and their local managers play a
pivotal role in ensuring energy and carbon emissions reduce to the set target.

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Environmental Management System Approaches
To realize a substantial result in managing environmental systems, Adidas has invested in
following environmental approaches.
Carbon emission reporting
The company has committed to report its carbon emission through Carbon Disclosure
Project to enhance transparency in its production operations. Though this doesn’t work for the
benefit of the organization, it ensures that the company is responsible and takes care of its
surrounding to safeguard the lives of the people, animals, and plantations within its locality.
Global travel
Adidas keeps an eye on its environmental footprints since most of its staff members
travel by air. The company monitors and records all air travel through its in-house travel agency
to reduce absolute emissions. Overwhelmingly, it has managed to reduce 16% of its emission.
The company equally encourages employees to use low carbon vehicles and public transport
systems to ensure it reaches its zero carbon emission target come 2020. Additionally, Adidas
works in respect to the ISO 14001 regulations which demands environmental protection by
shipping most of its cargo (Barmeyer & Franklin, n.d, P. 3).
Environment friendly manufacturing techniques
Adidas manages its manufacturing processes by embracing ideas and techniques that
saves environment from harm. For example, ensuring there is low waste and sourcing sustainable
cotton (Arnold, Beauchamp &Bowie, 2013, p.60).

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Training suppliers in energy efficiency
Despite a workable Environmental Management System (EMS), the company trains its
suppliers to improve environmental conditions and use better production methods as well to
reduce carbon emission and increase energy efficiency.
Collaborative strategy
Adidas collaborates with policy makers and other industries to improve their operations
and check on their activities. This makes them more answerable to other parties of interest as far
as safeguarding the environment is concerned. For example, Adidas is a member of; Sustainable
Apparel Coalition (SAC), UN Climate Neutral Now Initiative, and Business for Innovative
Climate and Energy Policy (BICEP). Adidas is also among the 33 consumer brands that have
signed a ‘Climate Declaration’ for climate change (Aboulian, Charnley &Watkins, 2008, p. 213).
Green Company program
The Green Company program targets at improving Adidas’ sites around the globe by
reducing carbon emission. It is not only limited to the company’s manufacturing sites but also
administrative offices, distribution centers and retail stores. This initiative is backed by a budget
known as green energy fund that helps to accelerate energy and carbon reduction projects. The
program is a not only focused on carbon emission stewardship but also burn of plastic bags to
create a clean environment. Categorically, the initiative deals with proponents highlighted in the
diagram below (Borowski, 2011 P.350).

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Conclusion
We can establish that Adidas is one of the successful companies in the world. Being the
second largest company worldwide in sportswear, its future is bright with the conceptualized
sustainable business plan which takes into account the needs of all parties ranging from
shareholders, employees, supply chain, environmental concerns, and the customers at large.
Adidas equally enjoys a strong competitive advantage characterized by technology advancement
and innovation, intense marketing promotion, and customer involvement. The stated milestones
define a successful business and could be echoed by any other business running for success.

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Arnold, D., Beauchamp, T. and Bowie, N. (2013). Ethical theory and business. Boston: Pearson
Education.pp. 56-67
Barmeyer, C. and Franklin, P. (n.d.). Intercultural management. 8(3)
Borowski, A. (2011). Adidas marketing strategy. Norderstedt: Grin Verlag.pp 345-350
Cordón, C., Hald, K. and Seifert, R. (2012). Strategic supply chain management. Abingdon,
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Global Logistic and Supply Chain Management. (2017). 3rd ed. India: Wiley. pp 56-99
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