The brand name of Adidas Group is a combination of the name of the founder and the company name, and is structured in three main divisions, which entail the Adidas sport performance, heritage, and sport style. For years, Adidas Group maintains its trademark as the major producer of sport products such as shoes, apparel and accessories globally. According to Porter, value chain analysis denotes all the undertakings that increase value to the organizational amenities and products. Such activities must be operated at an optimum level for Adidas Group to surpass the cost of operation, for instance, clients should return to the company and willingly and freely do some transactions, (Porter, 1985). This is essential in maintaining a competitive edge over competitors and ensuring that Adidas Group remains the leader in technological advancement in the field in which it operates. In this regard, Porter assess that a company is divided into primary and support activities that are crucial in maintaining market position.
The value chain analysis of Adidas strongly borrows from Michael Porter’s perspective in that the company strongly maintains its primary activities since its beginning. For instance, the inbound and outbound logistics are increasingly strongly in the company and this ensures that it operates optimally in the current environment. Adidas Group has certain inbound logistics chain for raw material movement as well as un assembled products inside the organization. Further, the outbound systems logistics for finished products transportation is effective and timely. The main operations, sales, marketing, and related operations are increasingly strong and this has pushed the company to be the main sport industry in the sector. The team of researchers responsible for new and innovative product development and shifting market demands has been increasingly sustainable, and has assisted Adidas to maintain its position in the market and attain competitive advantage, (Nieman & Bennett, 2006). Adidas Group has introduced electronic sales, and continued to dominate the strategic marketing in e-sales. The company monitors service quality, staff training, and satisfaction of customers through the franchisees as a crucial aspect of value chain.
Additionally, the supporting activities of Adidas Group, which includes procurements, research, human resource management and development as well as development of the company’s infrastructure and is well operated to ensure strong reputation of the company, value of the brand and status of market. Adidas mainly emphasize on materials procurement and all other activities related in the cost effective mode, making necessary use of worldwide strategies of off shoring and sourcing. For instance, Adidas Group put more emphasis, effort and resources on product innovation in ensuring competitive advantage in sport industry. Research and development will make the company produce better products and meet the goals and expected customer demands and preferences. Each year, the Adidas Group expands and procures new and innovative techniques to satisfy consumer needs. Similarly, Adidas has expanded some of its activities of manufacturing to nations such as China and Vietnam, considering costs of labor. Additionally, the Adidas company workers are well treated and always satisfied, (Kaplinsky & University of Sussex. 2000). The organization believes that their workers an increasingly crucial resource for the organization and therefore, has a very string human resource management unit that performs activities such as recruitment, hiring, development, training, discipline, reward and dismissal of personnel. To attain employees’ welfare needs and attain the target in sporting product industry that is entirely depended on employees’ enthusiasm, well-being, and talents, the company boosts employees’ morale. This is done through compensations, medical insurance, and transport allowances. Moreover, Adidas Group organizes regular seminars for all workers to encourage talents and breed new talents for the growth of commercial achievements, (Nieman & Bennett, 2006). The seminars are aimed at availing the latest knowledge to the employees to ensure that their workforce operates optimally and efficiently using the latest technology available in the market. Finally, the company also spends a large amount of resources for the development of technology like equipment development, technical knowledge that transform the output and input of the company, and infrastructure development, which includes accounting, control, planning and information systems management.
Being an international business with various resources Adidas Company is able to penetrate various global markets. The value chain analysis enables the firm to analyze its value in the marketplace and analyze its weaknesses and strengths, which are necessary in making necessary adjustments. With this analysis, the company is able to build on their strengths and improve on their weaknesses. Value chain analysis also allows the company to improve its productions, boost employees’ morale, satisfy and meet consumer demands.
Also Study: Adidas Global Operations Management
- Kaplinsky, R., & University of Sussex. (2000). Spreading the gains from globalisation: What can be learned from value chain analysis?. Brighton, Eng: Institute of Development Studies.
- Nieman, G., & Bennett, J. A. (2006). Business management: A value chain approach. Pretoria: Van Schaik Publishers.
- Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. New York: Free Press.