Leading Through Digital Disruption of Adidas AG

Task 1

Company’s Introduction

Adidas (or Adidas AG, to use the full name) is a German company that manufactures athletic footwear, clothes, and accessories. Adidas is a private Footwear Wholesaling, where they account for an estimated 9.1% of total industry revenue.

They had established itself as Europe’s top sportswear producer and the worlds second largest (after Nike) by the turn of the century. The company’s product portfolio includes footwear, apparel and accessories such as bags, sun glasses, fitness equipment, and balls. The Adidas three-stripe logo appears on the brand’s new “trefoil” and “mountain” badges. Its headquarters are in Herzogenaurach, Germany.

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Impact through Digital Disruption

Adidas has traditionally prioritized research and development and brand strength. Sales dropped in 2013 and 2014, prompting management to change its focus from products to customers by emphasizing product personalization.

Adidas’ “transformation” into fast fashion has been facilitated by the ubiquitous trend of digitizing the supply chain. Data-driven design, IT connectivity with suppliers and merchants, real-time planning, and automated production facilities are just a few examples.

It’s worth noting that there’s a direct link between the isolationist movement and efforts to shorten the supply chain, which may necessitate physically assembling all of the chain’s elements. Almost all of Adidas’ manufacturing is outsourced to third-party enterprises, the most majority of which (roughly 80%) are based in Asia.

Adidas is experimenting with the production of “Speed factories.” Over 90% of the trainers produced by the brand are handcrafted in Asia. The first plant, which opened in Germany, had a modest yearly capacity of 500,000 pairs of trainers. Adidas’ speed factory is near the end user, has highly automated and adaptive machinery, and makes extensive use of 3D printing machines.

Objectives

Key Opportunities

Digital technologies and extensive automation are essential for the success of Adidas. According to a company blog post, the “Own the Game” plan requires investing more than one billion euros (about $1.1 billion) on digital transformation by 2025. From initial ideation in 3D design tools to final product sales, the entire value chain will be digitized. The company may accomplish this by growing its technical staff and fostering an information- and technology-focused culture. In 2021, Adidas plans to hire more than a thousand professionals in digital technology.

To complete its transition to direct-to-consumer sales, Adidas aims to invest in e-commerce and membership programs. The company found that customers anticipate highly customized service from their favorite brands regardless of whether they make purchases online or in-store.

By 2025, adidas hopes to have 500 million members in its various membership programs, up from the current 150 million. Adidas is going digital with its stores to enable Omni channel functionality. Adidas claims its retail associates will aid its digital growth. This guarantees that customers’ overall perception of the brand remains consistent.

Task 2

Techniques and technologies

Micro data

Despite the widespread interest in “big data,” the value of “micro data” is rapidly rising. Transactional micro data, or micro data, focuses on individual consumers.

Census and survey data on subsets of a population (such as persons, firms, or households) is known as “micro data.”

When businesses have more information on how their customers behave, they can make better choices. Despite the importance of big data, there are still some choices that can’t be made with macro data approaches. 

Augmented Reality (A.R.)

Investopedia defines “augmented reality” as “digitally enhancing the real physical world through the addition of visual features, music, or other sensory inputs.”

We worked with Asahi on a pilot project to determine how successfully augmented reality might be used for package inspection. The main draw of the trial run was Fuller’s London Pride, a regular in the Asahi lineup.

Currently, London Pride is the city’s most popular beer. However, as part of a determined effort to introduce the brand to more ale enthusiasts across the country, Asahi intended to compare a new packaging concept to the current bottle design.

Read the case paper to learn more about our groundbreaking A.R. in market research pilot test and its potential applications in pack testing.

Brands and market researchers may now, more than ever, test product concepts, evaluate product feasibility, and study consumers’ reactions to new and developing items in virtual worlds for a fraction of the cost.

Businesses employ augmented reality to show how their products might seem in the buyer’s own environment. Companies learn how to better address the needs of their core demographic. This strategy is also far more cost-effective than hosting a focus group or sending out samples to potential clients.

Internet of Things (IoT) and Wearables

The “Internet of Things” refers to a network in which several items are interconnected so that they can exchange and receive data in real time using in-built sensors. Thanks to sensors, anything from cars to washing machines to curtains can talk to one another and share data over the web.

Information collected from Internet of Things devices is extremely important since it can be applied to so many areas of users’ life. Think about the business benefits of keeping tabs on your New Year’s resolutions. In the presence of the user’s consent, they can collect a wealth of data from a wearable gadget like a Fitbit or Apple watch.

Fast Decision Making

Project Management Tools

Well-managed projects result in increased productivity, a faster time to market, and a competitive edge. Choosing the best digital project management platform for your company and making sure it is widely used are both critical.

Your teams will be able to organize their work more easily, meet deadlines, monitor their progress, respond swiftly to changes, and see the big picture with the correct project management system. Employees will become more productive, projects will be effectively finished, and customers will be delighted.

Setting up email alerts or notifications whenever the project status changes, a team member completes a task, or there is a need for assistance helps to enhance the utilization of project management software. You and your team may solve difficult procedures and tasks promptly by exchanging essential papers within the platform, rather than digging through email or scheduling time-consuming meetings.

Online Data Storage

Cloud storage solutions are essential for businesses that value scalability, speed of deployment, and effective data management. Cloud storage allows you to rapidly raise or reduce capacity without the need to add or upgrade hardware. Geographical constraints are unnecessary because information may be accessed at any time and from any system, regardless of location.

In response to the desire for a more flexible and mobile work environment, the development of cloud-based solutions is transforming the way we conduct business.

Cloud storage solutions are becoming increasingly vital for various sorts of mobile workers, such as frontline workers, retail associates, and frequent travelers, who need access to data on the move yet are not connected to a physical location.

Digital Accounting Software

Accounting is a time-consuming and labor-intensive procedure, yet it is critical to any company’s performance in terms of productivity, safety, and accuracy.

Investing in digital tools and empowering your finance and accounting team may help to accelerate procedures, minimize risk, and save money.