Case Study Analysis: Adidas Group IT Multi-Sourcing Strategy

This case study analyzes the Adidas Group's IT multi-sourcing strategy, focusing on the challenges and opportunities presented by the transition from single-sourcing to a multi-sourcing model. The analysis examines the background of Adidas, the main issues faced by CIO Jan Brecht, including vendor selection and management, and the alternative courses of action available to the company. The study emphasizes the importance of establishing a coherent ecosystem, investing in key supplier relationships, and evaluating internal capabilities. Recommendations are provided to maintain strong relationships with offshore vendors, including evaluating internal capabilities, understanding market requirements, and fostering effective communication. The assignment highlights the potential risks of dysfunctional competition and suggests strategies to mitigate these risks, such as vendor engagement and digital functionality integration.

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Name of the Student
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Current Situation
The current Situation of Adidas group is dwelling among the tumult of selecting the
multi-sourcing strategy for offshoring the business. The background information of the company
Adidas group demonstrate the organization as one of the leading sportswear manufacturing
company. The history of its origin is mooted immediate after the World War II. Parting from his
brother, Adi Dassler formed the group as per his name Adidas. The outsourcing of their business
started from 1990. They continued the journey to enhance the global sales rate with performing
footwear manufacturing. The group dramatically shifted their business model from a sole
wholesaler to direct communication with the end customers. Instead of the operational
headquarters in Germany, the company started to business with global networks. There are
almost 200 subsidiaries and more than 46,000 employees working under the supervision of this
group (Applegate et al. 2014). The Adidas Global IT is also observed with remarkable increase
in the consumer end through the emerging technology of digital business or e-commerce
business model and social media marketing. At present, the CIO Jan Brecht is in the thought
procedure of several benefits and risks in implementing multi-sourcing strategy for business
outsourcing.
Main issue of this case
According to Brecht the main issue of this case is IT vendors. The case demonstrates
that IT vendor is a natural step towards bringing further improvement in competitiveness and
maturity. As per the case, establishing a multi-sourcing mind-set within the organization can be
ranked as most important issue for the business. The middle project managers of Adidas Global
IT consider the vendors of offshore as a primary pool of human resource. This perception is
mooted within the relationship between Alpha, where the vendor employees performed for extra

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hours at the consumer site in Germany (Saunders and Wieners 2019). The adverse experience
drove Adidas Global IT to shift the general sourcing approach. Another issue the company is
facing is the selection of vendors. To overcome situation the company has obtained the
procedure of systematic and diligent procedure. It pays attention in various kinds of offshore
vendors. Pooling from the Indian IT vendors, the company is also focusing on other geographic
areas including Eastern Europe and Soviet Union (Goni and Kadarusman 2015). Instead of
selecting one offshoring vendor, Brecht opted for selecting multiple vendors to generate a more
competitive environment.
Alternative course of actions
As an alternative mode of actions the company must consider some other course of
actions.
 Establishing a coherent eco-system can help the organization to monitor effectively. It
refers to creating value for the vendors and existing employees of the organization. It is
depended on the inter organizational, contractual, relational, and collaborative mode of
activities (Shroff and Bandi 2018). It will help to build strong relationship between
suppliers and buyers to gain profit from long-term relationship with increased level of
trust.
 Another alternative of multi-sourcing strategy is making enough investment on the key
supplier relationships. Outsourcing is the way to maintain the quality of the business by
sharing the responsibilities with trusted vendors (Lioliou, Willcocks and Liu 2019). There
are multiple ways a company can strengthen the relationship with the suppliers. Hence,
these strategy also subjected to its unique pros and cons. However, before the delve into
this strategy the companies must research about the geographical location of the vendors,

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the cost of investing on second suppliers, measuring the compatibility of other sources,
and the impact of the primary suppliers for the implementation of the new strategy
(Kellner, Lienland and Utz 2019).
Recommendations
The observed risks for the implementation of multi-sources strategy can bring negative
consequences for the organization. Some recommendation are provided for the company to
maintain the relationship with offshore vendors for rightly implication of the strategy.
 Evaluation – The Company must evaluate the inside-out capabilities. These capabilities
help to understand the requirements of market, competitive obstacles, and understand the
external opportunities.
 Required Capabilities – Understanding the capabilities of including management of
relationship, knowledge about the core business, proper management of the scheduled
projects, management of the human resource department, and proper understanding of
software development.
 Adidas Global IT is observed with the risk of dysfunctional competition. To overcome
the situation, the company must pay attention to certain areas. The Company should opt
for the digital functionality of digitization and telecom marketing, the communication
between vendors can be understood.
 Another way to handle the vendors is to engaging them into key sessions. Vendors are the
suppliers of product or services for the organization. During the sessions the company
must provide the proper purpose of hiring them for the long run. They should be oriented

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with their value. Vendors are the experts within their original domain and bring
competitive advantage for the entire organization. Along with that, the company must
understand the nature of business proposed by the vendors.

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References
Applegate, L.M., Wiener, M., Saunders, C. and Gill, G., 2014. adidas Group: IT Multi-Sourcing.
Goni, J. and Kadarusman, Y., 2015. Local company contribution within global value chain: a
case study in the Indonesian footwear industry. Mediterranean Journal of Social Sciences, 6(6
S5), p.444.
Kellner, F., Lienland, B. and Utz, S., 2019. An a posteriori decision support methodology for
solving the multi-criteria supplier selection problem. European Journal of Operational
Research, 272(2), pp.505-522.
Lioliou, E., Willcocks, L. and Liu, X., 2019. Researching IT multi-sourcing and opportunistic
behavior in conditions of uncertainty: A case approach. Journal of Business Research, 103,
pp.387-396.
Saunders, C. and Wieners, M., 2019. Studying Information Technology Multi-Sourcing Using
Glaserian Grounded Theory. SAGE Publications Ltd.
Shroff, B.P. and Bandi, R.K., 2018. Impact of IT Multisourcing on vendor opportunistic
behaviour-A research framework.