Procurement/Supply Chain

Strategy

Adidas is a global brand and company that has had a huge impact on sports and the franchising of merchandise goods. The sports franchise is in its golden era. All around the world, sports has grown so close to the hearts and minds of people. With current technological strides, the sporting world has been brought home literally. Adidas grew into one of the biggest brands in sports goods and clothing (Thompson et al., 2015). This includes sport jerseys, shoes, sporting gear and other merchandise. The company provides these items to sports clubs and organizations all over the world. It also provides sponsorship and endorsements for sports and athletics championships, and tournaments. The Adidas brand is a sporting juggernaut to say the least. The brand is the most dominant sporting brand in Europe and the second biggest in North America (Rugman, 2017). All the brands and franchises of Adidas are under the parent company Adidas Group. This paper proposes the use of corporate and operational strategy for business prowess, and the development of effective approaches to developing such strategies.

Mission Statement

Adidas’s mission statement is striving to become the global frontrunner in the sporting goods sector. The brands of the company are compounded on a passion for a sporting lifestyle and sports. The group is committed to continual strengthening of its products and brands, to improve its competitive position in the industry.

Corporate Strategy

A corporate strategy is an approach to decision making that utilizes analysis of a company’s businesses to figure out the ways in which to create the greatest value. There is need for analysis of the ways in which the various brands and businesses fit together in order to develop a corporate strategy (Thompson et al., 2015). The parent company should analyze how it is structured towards optimizing governance, business processes and human capital. Corporate strategy as part of business strategy, looks into how to use strategic decision making for an individual brand or business (Johnson, 2016). For instance, the Adidas shoe brand as part of the Adidas Group. The main roles in corporate strategy include strategic tradeoffs, managing portfolio, organization structure and design, and allocation of resources.

Operational Strategy

Operational strategies are the mechanisms organizations utilize to realize goals and objectives. Developing said mechanisms ensures that organizations can implement and examine efficient, and effective systems for utilization of work processes, personnel and resources (Rugman, 2017). Companies that are in the service sector utilize these mechanisms to bridge long term and short term business decisions, in efforts to create effective management teams.

The Adidas Group uses the following operational strategies to gain competitive advantage.

Developing products and services. The main considerations include value addition, innovation and design. In the development of new consumer products, the company can take any of the following approaches (Thompson et al., 2015). Wait to see if a competitor’s product or innovation does well. Wait for introduction of similar products on the market and improve on them. Lastly, become a market leader and develop an entirely new product. Service development, on the other hand, can be approached through considerations of packaging that has immediate psychological and observable support servicing, and benefits (Chen, 2017). The company in the entire development processes should consider how its technical approaches link to the needs and desires of customers, its competitiveness, and the market demands for goods and services.

Competitive priority development. To develop competitive priorities, businesses need to conduct a requirements analysis, define core processes and activities, undertake market analysis and create a corporate strategy. Adidas does this by evaluating the flexibility of its products pertaining to customization, volume and variety. Evaluating the time it takes to produce and deliver goods, and services. Lastly, by evaluating the quality and operational costs of products and services (Johnson, 2016). Competitive priorities and their development should include ensuring that quality goods (that meet the needs and desires of customers) are produced and offered at fair prices.

Core competencies development. These are the resources and strongpoints of a company. For Adidas, core competencies are its sportswear goods, especially footwear. Others include financial expertise, marketing, optimal locations, and having staff that is well trained. By identifying these strong points and developing them, Adidas can develop processes as follows (Lloret, 2016). Building relationships with stakeholders, further developing their products and ensuring customer satisfaction.

Customer oriented strategies. These are approaches geared towards meeting the desires and needs of the target market. Adidas develops strategies that adapt to and evaluate changing business environments. There is emphasis on continual enhancement of the group’s core competencies, and the development of strengths (Hickman, 2018). When evaluating business environments, the group monitors market trends as part of efforts to avoid possible threats and to take advantage of emerging opportunities.

Tying Strategy to Mission

The link between Adidas’s mission statement and its operation strategy is the development of operations strategy towards gaining competitive advantage. This includes organization design. It involves ensuring that the company has the needed systems and corporate structures to create the greatest possible value, and competitive advantage (Chen, 2017). The management of Adidas considers the business units, the reporting structure for the staff and the role of the corporate headquarters.

The reporting needs should be catered for as follows. Determining the best ways to delegate authority. Setting structures of governance and those of reporting i.e. choosing between matrix and top down reporting structures. Developing the strongpoints of the organization. Separating responsibilities to create a balance between return and risk. Reducing redundancies by integrating business functions and units (Lloret, 2016). Lastly, determining how huge projects and commitments can be broken down into workable modules.

The headquarters of a business and its structure regarding centralization and decentralization is another way of linking the company’s mission to its operations strategy. The activities include managing influence of structure on the strategy of business units. Making decisions on the approach i.e. bottom up or top down decision making (Hickman, 2018). Lastly, determining the extent of autonomy to be given to business units.

In conclusion, the Adidas Group and its various brands are exemplary when it comes to the utilization of strategy in corporate processes, operational activities and structures of business. Companies and organizations worldwide can benchmark on this success story and learn the intricacies of business operations for a global brand. The Adidas brand has not lost focus on its customers and its core competencies. A mission statement is important as it indicates the focus and goals of a company. For success, these objectives should be tied to operations and corporate strategy

References

Chen, Q. (2017, February). Exploration on Recognition and Construction of Core Competitiveness of Enterprise Culture. In 2017 International Conference on Humanities Science, Management and Education Technology (HSMET 2017). Atlantis Press.

Hickman, C. R., & Silva, M. A. (2018). Creating excellence: Managing corporate culture, strategy, and change in the new age. Routledge.

Johnson, G. (2016). Exploring strategy: text and cases. Pearson Education.

Lloret, A. (2016). Modeling corporate sustainability strategy. Journal of Business Research, 69(2), 418-425.

Rugman, A. M., & Verbeke, A. (2017). Global corporate strategy and trade policy. Routledge.

Thompson, A., Strickland, A. J., & Gamble, J. (2015). Crafting and executing strategy: Concepts and readings. McGraw-Hill Education.