HISTORYAdidas is a multinational company and it was founded,and its head office is located Herzogenaurach which is in Germany, the companydesigns and manufactures various commodities like shoes, clothing andaccessories and said to be the largest sportswear manufacturer in Europe andthe second largest in the world after Nike, which is its rival company.
Adolf Dassler in his mother’s house started thecompany and was joined by his elder brother Rudolf later in 1924 under the nameDassler Brothers Shoe Factory. In 1949, due to the breakdown in therelationship between the brothers, Dassler created Adidas, and Rudolfestablished Puma, which became Adidas’ business rival.The three stripes logo by Adidas, which is used on thecompany’s clothing and shoe designs as a promotion logo – The branding ofAdidas was bought from Finnish sports company Karhu Sports which Dasslerdescribed Adidas as “The three stripes company” as the brandingbecome very successful. After the split up in relations between the twobrothers in 1947 which led to the formation of new firm by Rudolf which he namedRuda and was derived from Rudolf Dassler which was later rebranded as Puma, andDassler formed his company on 18 August 1949, which was formally registered asAdidas AG, derive from Adi Dassler. “All Day I Dream About Sports” is said tobe the acronym for Adidas, though it is a myth but in real, the name is formeddue to the combination of two words i.
e. “Adi” (a nickname for Adolf)and “Das” (from “Dassler”).Puma and Adidas had become bitter business rivalryafter the split of Dassler Brothers Shoe Factory in 1947, and due to this eventhe town of Herzogenaurach was divided on the issue which lead to the nickname”the town of bent necks” and at that time people looked down to seewhich shoes strangers were wearing.
Even two football clubs of the towns weredivided as Adidas supported the ASV Herzogenaurach club, while Puma supported 1FC Herzogenaurach. When an odd-jobber were called to Rudolf’s home, the used towear Adidas shoe deliberately so that Rudolf Dassler would tell them to go tothe basement and pick out a pair of Pumas shoe for free. PRODUCTPROFILEAPPARELA wide range of clothing items is sold by Adidasranging from tracks, t-shirts, leggings, socks, jackets, hoodies, etc.Franz Beckenbauer tracksuit was the firstAdidas item of apparel created in 1967. The largest manufacturer of sports brasin Europe is Adidas, and is also the second largest manufacturer in the world. SPORTSWEARAND SPORTS EQUIPMENTSA wide range of sportwear required in different sportslike cricket, basketball, football, tennis, skateboarding, khabaddi is alsomanufactured by Adidas. Moreover, adidas also manufactures sports equipmentlike cricket bat, football and has been official supplier of the match ball inFIFA world cup.
Since different sports games require different outfitsand so a wide range of different shoes are also manufactured by Adidas likeboots worn by football players, running shoes for athlete, shoe worn by cricketplayers, tennis players, etc.Sports equipment of golf are also manufacture byAdidas under the sub-head ‘Adidas Golf’.ACCESORIESAdidas manufactures accessories for both men and womenranging from watches, eyewear, bags, baseball caps, and socks. As well, Adidas alsohas a branded range of male and female deodorants, perfumes, aftershave andlotions. Mobile accessories also manufacture by Adidas. CLIENTPROFILEClient of Adidas includes athletes, sportspersonalities from different sports and also Adidas is the official sponsorshipof various teams in different sports, players from different sports field, etc.
Adidas has also provided baseball equipment andsponsors numerous players of Major League Baseball and Nippon ProfessionalBaseball in Japan. From 1997 to 2008, Adidas sponsored New York Yankees.Inthe 1990s, Adidas signed the superstar Indian batsman Sachin Tendulkar and madeshoes for him. From 2008 till his retirement, Adidas had sponsored the cricketbat used by Tendulkar. It created a new bat, ‘Adidas Master Blaster Elite’,personalized for him. In 2008, Adidas made a concerted move intoEnglish cricket market by sponsoring English batting star Kevin Petersen afterthe cancellation of his lifetime deal with Woodworm, when they ran intofinancial difficulties.The following year they signed up fellow Englandplayer Ian Bell, Pakistan opening batsman Salman Butt and Indian PlayerRavindra Jadeja. In the Indian Premier League (IPL), Adidas sponsoredthe team Mumbai Indians from 2008 to 2014 and Delhi Daredevils from 2008 to2013.
They were the official sponsors of Pune Warriors India in 2011 and 2012,however the team was banned from IPL due to payment issues. In 2015 Season,Adidas sponsored Royal Challengers Bangalore.USA Olympic team members McKayla Maroney, JordynWieber, Jake Dalton and Danell Leyva are all sponsored by Adidas gymnastics. ORGANIZATIONSTRUCTURE The company consists of several senior levels,mid-level and entry level executives which handle its functioning andoperations. A strict organization or hierarchical structure is followed withinthe company to ensure that everything remains in order and that theresponsibilities and roles are properly divided and distributed.CEOAt the topmost position comes with Chief executiveofficer or CEO which is the highest level in the corporate company who is thesenior most employee of the company and the one who is responsible for all thesuccesses and losses of the company. Directly within the CEO, there are many positions which are occupied bythose who report directly to him.
They are: CFOChief corporate communications officerGeneral counselGlobal head of brandsHead of public relationsMember of management board, global operationsMember of management board, global salesChairman of BoardThis is the second highest position in the company andis also a senior level position in the company. The chairman has a supervisoryor decision-making role in the company. One needs not just experience but alsoskills and knowledge to get to this position. ViceChairman of BoardAfter the chairman comes the position of the vicechairman of board. The vice chairman of board directly overseas the various departmentsand ensures that they are working smoothly. Vice chairman of board looks afterboard related activities and takes part in the major decision making of thecompany. Vice chairwoman of the supervisory board, employeerepresentativeVice chairman of the supervisory boardMember of the supervisory board, employeerepresentative The director of employee representative or member ofthe supervisory board is the next position in the hierarchical order of Adidascorporate hierarchy.
This individual looks after employee relations, employeemanagement and employee welfare at Adidas. Memberof the Supervisory BoardThe member of the supervisory board is also known asthe director and is the person who is responsible for supervision of differentdepartments. There is a director each for each of the Adidas head office andthis too is a senior level position.
PRESENTMARKET SHAREAdidas AG is the largest sportswear manufacturer inEurope and the second largest in the world. The company employed approximately60,617 people worldwide in 2016. The adidas Group’s global net sales amountedto about 19.29 billion euros in 2016.
In that year as well, the North Americanregion of the adidas Group generated 21 percent of the company’s retail netsales. Footwear and apparel are two of the adidas Group’sbiggest segments. In 2016, the company produced 360 million pairs of shoesworldwide and 382 million units of sports apparel. As a result, Adidas hasbecome one of the most popular brands amongst men and women when it comes tosportswear worldwide.FUTURESTRATEGIESAnything and everything that can be digitalized willbe digitalized. Adidas promise it customers that the company will seize everynew technology as an opportunity to communicate even better with customers andsatisfy their wishes even more quickly.
With the company newe-commerce business, the company is already closer to the customer. Adidas knowthat their customers are buying behaviour, their budgets, and their purchasingrhythms and it’s completely clear that the company will be securing their short-termrequirements and production planning with this data. However, according to the company it is crucial that theyshould use this digital connection to swiftly detect even the smallest changesin the moods of young consumers and react to them accordingly and the coretarget group of 14- to 19-year-olds renews itself every five years. In thesefive years, the company is trying their best to master every trend, and at thesame time understand the regrowing core target group. Regardless of where and how the customers shop, anycompany will want to inspire them always and everywhere and so Adidas have moreretail stores than any other competitor, and are the market leader ine-commerce, they are even implementing franchising models in challengingmarkets like China and Latin America.
With more than 2,700 retail stores (12 concept stores,including the Running Store and the new OCS in Berlin, as well as 12 outletstores in Germany), over 11,000 mono-brand franchise stores (13 in Germany),over 116,000 stores by the company’s wholesale partners, and around 50 of ourown e-commerce platforms, we have an unparalleled network of contact points forour customers in our industry. These customers thus experience adidas across allsales channels, and with a uniform appearance at that. adidas isn’t divided orquartered, it maintains one face for our customers.
Adidas is aiming to increase their consolidate profitannually up to the year 2020 and to achieve these goals, the company is concentratingin their strategic business plan “Creating the New” on the factors “Cities,””Swiftness,” and “Open Source.”FINANCIALINFORMATION ACHEIVEMENTSDOWJONES SUSTAINABILITY INDICESIn September 2017, for the 18th consecutive time,adidas AG has been selected to join the Dow Jones Sustainability Indices(DJSI), the world’s first global sustainability index family tracking theperformance of the leading sustainability-driven companies worldwide. In the “Textiles, Apparel & Luxury GoodsIndustry”, the company was rated industry best in the criteria Brand ManagementCustomer Relationship ManagementImpact Measurement and ValuationMaterialityRisk and Crisis ManagementSupply Chain ManagementEnvironmental Policy and Management SystemsCorporate Citizenship and PhilanthropyHuman Rights.The indices serve as benchmarks for investors who integratesustainability considerations into their portfolios, and provide an effectiveengagement platform for companies who want to adopt sustainable best practices.The annual review of the DJSI family is based on a thorough analysis ofcorporate economic, environmental and social performance, assessing issues suchas corporate governance, risk management, branding, climate change mitigation,supply chain standards and labour practices. FTSE4GOODINDEX SERIESIn December 2016, adidas was again included in theFTSE4Good Index.FTSE Russell (the trading name of FTSE InternationalLimited and Frank Russell Company) confirms that adidas has been independentlyassessed according to the FTSE4Good criteria, and has satisfied therequirements to become a constituent of the FTSE4Good Index Series. Created bythe global index provider FTSE Russell, the FTSE4Good Index Series is designedto measure the performance of companies demonstrating strong Environmental,Social and Governance (ESG) practices.
The FTSE4Good indices are used by a widevariety of market participants to create and assess responsible investmentfunds and other products VIGEOEIRIS EURONEXT INDICESAs of May 2017, adidas AG is maintained in the VigeoEiris Euronext indicesEurope 120 (the 120 most advanced companies in Europe)andEurozone120 (the 120 most advanced companies in theEurozone region).Vigeo Eiris’ indices are composed of thehighest-ranking listed companies as evaluated by the agency in terms of theirperformance in corporate responsibility. Selected companies have achieved thehighest ratings in their reference universe. Ratings are weighted and reflectthe company’s performance with regards to the set of risks Vigeo Eiris definesand evaluates to assess and measure corporate responsibility.
ECPIINDICESIn December 2016, adidas AG has again been included inthe ECPI Indices. ECPI is dedicated to environmental, social and governance(ESG) research and index development, calculation and publication. ECPI offersa wide range of ESG indices built using its proprietary ESG Rating Methodology(positive screening) and controversial sector exclusion (negative screening).
CARBONDISCLOSURE PROJECT (CDP)Adidas annually report our CO2 emissions and waterconsumption reduction targets and strategies to achieve these targets via CDP,which is an independent not-for-profit organisation that holds the largestcollection globally of self-reported climate change data. On a voluntary basis,CDP requests information on CO2 emissions, reduction targets, risks andopportunities of climate change from the world’s largest companies on behalf of722 institutional investor signatories. The information provided is evaluatedand published by CDP to increase transparency around climate-related investmentrisk and commercial opportunity, and to drive investments towards a low-carboneconomy. In 2017, adidas again responded to the CDP ClimateChange questionnaire and was awarded with a ‘B score’ in the category”Consumer Discretionary”.
This good result signals that the companyis taking further steps to effectively reduce its emissions, indicating moreadvanced environmental stewardship by measuring and managing its impact. Inaddition, adidas responded to the CDP Water programme. For the second year in arow, the company reported about its water reduction targets and strategies toachieve these targets and was awarded with a ‘A- Leadership’ rating. Theexcellent result shows that the company has implemented a range of bestpractice actions to manage water and mitigate water risk, both in its ownoperations and beyond them.