Global Value Chain

Global Value Chain Analysis of Adidas

1. Introduction
Adidas, a multinational sportswear and lifestyle brand, stands as an iconic player in the
dynamic and competitive global value chain. With a rich history dating back to the mid-20th
century, Adidas has evolved into a powerhouse synonymous with innovation, quality, and
athletic excellence. In the contemporary landscape of the sportswear industry, understanding
Adidas within the context of the global value chain provides valuable insights into how the
company orchestrates its diverse activities to deliver cutting-edge products to consumers
worldwide. Adidas' commitment to staying at the forefront of the industry is reflected not only in
its iconic three-stripes logo but also in its strategic positioning within the complex network of
activities that constitute the global value chain. From the initial stages of design and research to
the ultimate delivery of products to consumers, Adidas intricately navigates through various
stages, relying on efficient processes and strategic linkages.
This project delves into the global value chain analysis of Adidas, shedding light on how
the company manages its inbound logistics, operations, outbound logistics, marketing and sales,
service, technology development, human resource management, firm infrastructure, and linkages
within this comprehensive value chain. By examining these facets, we aim to unravel the key
elements that contribute to Adidas' success, innovation, and its ability to resonate with global
consumers. Through this exploration, we seek to gain a deeper understanding of Adidas' strategic
choices, challenges, and its role as a dynamic participant in the interconnected web of the global
value chain.

2. Primary activities
2.1 Inbound logistics
Adidas employs a streamlined inbound logistics process that involves the efficient sourcing
and procurement of raw materials, such as textiles and rubber, from a global network of
suppliers. The company focuses on maintaining strong relationships with suppliers, emphasizing
quality, ethical practices, and timely delivery of materials to support its manufacturing
operations. Through careful coordination and effective supply chain management, Adidas
ensures that the necessary components for its sportswear and footwear production are delivered
to manufacturing facilities, enabling the company to meet consumer demand with high-quality
products. While the specific details of Adidas' inbound logistics may not be publicly disclosed, a
typical inbound logistics process for a company like Adidas might include the following key
components:

• Supplier Management

• Order Placement and Processing

 • Transportation

• Warehousing and Inventory Management

• Customs Clearance

• Quality Control

2.2 Operations
Adidas operates within a dynamic global value chain, encompassing design, product
development, and manufacturing processes distributed across various regions. The company
strategically manages supplier relationships to ensure the procurement of high-quality raw
materials and components. Manufacturing takes place in both company-owned facilities and
through outsourced production to achieve cost efficiency. Rigorous quality control measures are
implemented, aligning with sustainability goals and environmental standards. Adidas leverages
technology for inventory management, supply chain visibility, and continuous innovation in
materials and manufacturing processes. The distribution network spans globally, with outbound
logistics involving the distribution of finished products to retail stores and e-commerce channels.
Marketing and branding strategies are deployed globally, including collaborations with designers
and athletes, contributing to the brand's visibility and market reach. Sustainability initiatives are
integrated throughout the value chain, focusing on eco-friendly materials, ethical sourcing, and
reducing the environmental footprint. The company actively manages risks related to supply
chain disruptions, geopolitical factors, and changing consumer preferences. Adidas embraces
collaborations and partnerships to diversify product offerings and stay competitive in the global
sportswear market. Overall, Adidas' operations within the global value chain underscore its
commitment to quality, innovation, sustainability, and responsiveness to market dynamics. Here
is an overview of the operations of Adidas within the context of a global value chain analysis:

• Design and Product Development

• Supplier Relationships
• Manufacturing
• Quality Control and Standards
• Logistics and Distribution
• Technology and Innovation
• Marketing and Branding
• Retail and E-Commerce
• Customer Service
 2.3 Outbound logistics
Adidas excels in outbound logistics through a well-orchestrated process that includes the
efficient distribution of its diverse range of sportswear products globally. Finished products are
meticulously managed in distribution centers strategically located around the world, ensuring
timely order fulfillment. The company leverages various transportation modes, including air and
sea freight, to deliver products to diverse markets. Products are shipped to Adidas-owned retail
stores, franchise locations, and third-party retailers. The e-commerce channel is seamlessly
integrated into outbound logistics, with fulfillment centers handling the packing, labeling, and
shipping of online orders. The distribution strategy is tailored to regional demands and market
trends, allowing Adidas to optimize inventory levels and meet customer expectations. The
company places a strong emphasis on real-time tracking and visibility, providing customers with
detailed information about the status and expected delivery time of their orders. Additionally,
efficient returns management processes contribute to customer satisfaction and inventory
optimization. Overall, Adidas' outbound logistics are characterized by a global supply chain
network, collaboration with third-party logistics providers, and a commitment to delivering
products in a timely and customer-centric manner. Here's an overview of the outbound logistics
for Adidas:

• Distribution Centers

• Order Processing

• Warehousing

• Packing and Packaging

• Shipping and Transportation

• Global Supply Chain Network

• Retail Store Distribution

2.4 Marketing Sales

Adidas employs a robust marketing strategy that encompasses various channels,
including digital, social media, and traditional advertising, to promote its extensive range of
sportswear and lifestyle products. The company strategically collaborates with athletes,
celebrities, and designers, leveraging these partnerships to create compelling marketing
campaigns that resonate with a global audience. Adidas maintains a strong e-commerce
presence, allowing customers to make purchases directly through its official website. The brand's
retail stores, both company-owned and franchise locations, serve as key touchpoints for
consumers to experience the products firsthand. Limited-edition releases and collaborations
contribute to the brand's desirability and generate excitement among consumers. Furthermore,
Adidas actively engages in sponsorships and endorsements, associating the brand with major
sporting events and athletes to enhance its visibility and credibility in the sports industry. The
company's marketing and sales efforts are aligned with a commitment to innovation, quality, and
a dynamic brand image, positioning Adidas as a leading player in the global sportswear market.
Here are the key aspects:
• Brand Positioning
• Product Range
• E-commerce and Retail Presence
• Marketing Campaigns
• Sponsorships and Endorsements
• Collaborations and Limited Editions
• Data and Analytics

2.5 Service
Adidas places a significant emphasis on post-sales service within its global value chain,
focusing on activities that enhance customer satisfaction and loyalty. The company provides
responsive customer service through various channels, addressing inquiries, providing product
information, and resolving issues promptly. Robust online platforms and mobile applications
contribute to a seamless and personalized shopping experience, allowing customers to access
exclusive content and track their orders. Adidas' commitment to sustainability is integrated into
its service offering, reflecting in eco-friendly initiatives and responsible sourcing practices. The
company actively manages product returns, ensuring a smooth and customer-friendly process for
exchanges or refunds. By incorporating these service elements into its global value chain, Adidas
aims to create a holistic customer experience, building lasting connections and reinforcing its
position in the competitive sportswear market. Here are some key elements of Adidas' service
within the global value chain:
• Customer Service
• Warranty and Returns
• Product Education
• Online Platforms and Apps
• Customization Services
• Community Engagement
 3. Support Activities

3.1 Procurement

Adidas employs a strategic procurement approach that involves carefully selecting and
managing suppliers to ensure the sourcing of high-quality raw materials and components for its
sportswear and lifestyle products. The company focuses on building strong relationships with
suppliers, considering factors such as quality, ethical practices, and timely delivery. Negotiation
and contracting processes are integral to establishing favorable terms and conditions, including
pricing, delivery schedules, and adherence to sustainability standards. Adidas prioritizes
innovative and sustainable materials in its procurement, aligning with the company's
commitment to environmental responsibility. Rigorous quality control measures are implemented
to maintain the desired standards throughout the procurement process, contributing to the overall
quality and integrity of Adidas' product offerings.
• Supplier Selection and Management
• Negotiation and Contracting
• Quality Standards and Assurance
• Cost Management
• Risk Management
•

3.2 Technology Development (R&D)

Adidas invests significantly in technology development and research and development (R&D) to
drive innovation across its product lines. The company focuses on creating cutting-edge
sportswear and footwear by integrating advanced materials, design technologies, and
performance features. Embracing digital innovation, Adidas explores technologies like 3D
printing and smart textiles to enhance product customization and functionality. The use of data
analytics informs decision-making in product development, allowing Adidas to understand
consumer preferences and market trends. Collaborations with technology companies and
research institutions contribute to staying at the forefront of technological advancements,
ensuring that Adidas products are not only stylish but also technologically advanced for optimal
performance. The commitment to continuous innovation reflects in Adidas' position as a leading
player in the global sportswear industry. Key aspects for Technology Development (R&D) for
Adidas.
• Product Innovation
• Digital Technology Integration
• Sustainability Initiatives
• Data Analytics and Customer Insights
 • Customization and Personalization
• Supply Chain Optimization
• Collaborations and Partnerships

3.3 Human resource management

Adidas maintains a robust firm infrastructure that serves as the backbone for its
operations. Strategic planning is integral to the company's long-term goals and objectives,
ensuring a clear direction for sustainable growth. Financial management is meticulous,
encompassing budgeting, forecasting, and financial stability to support global operations
effectively. Legal and regulatory compliance is a priority, with dedicated teams overseeing
contracts, intellectual property protection, and adherence to labor laws. The company relies on a
sophisticated Information Technology (IT) infrastructure to manage its digital platforms, supply
chain systems, and data analytics for informed decision-making. Adidas actively manages risks
associated with its operations, employing effective risk management strategies to mitigate
potential disruptions. Corporate governance practices are robust, with a well-defined
organizational structure and transparency in decision-making processes. Sustainability initiatives
are integrated into the firm infrastructure, reflecting Adidas' commitment to environmental and
social responsibility. Overall, Adidas' firm infrastructure supports its global operations, ensuring
efficiency, compliance, and adaptability in the dynamic sportswear market. Below are key
aspects of Adidas' human resource management:
• Talent Acquisition
• Training and Development
• Diversity and Inclusion
• Performance Management
• Employee Engagement
• Compensation and Benefits
• Health and Well-being Programs

3.4 Firm Infrastructure

Adidas maintains a robust firm infrastructure that serves as the backbone for its operations.
Strategic planning is integral to the company's long-term goals and objectives, ensuring a clear
direction for sustainable growth. Financial management is meticulous, encompassing budgeting,
forecasting, and financial stability to support global operations effectively. Legal and regulatory
compliance is a priority, with dedicated teams overseeing contracts, intellectual property
protection, and adherence to labor laws. The company relies on a sophisticated Information
Technology (IT) infrastructure to manage its digital platforms, supply chain systems, and data
analytics for informed decision-making. Adidas actively manages risks associated with its
operations, employing effective risk management strategies to mitigate potential disruptions.
Corporate governance practices are robust, with a well-defined organizational structure and
transparency in decision-making processes. Sustainability initiatives are integrated into the firm
infrastructure, reflecting Adidas' commitment to environmental and social responsibility.
Overall, Adidas' firm infrastructure supports its global operations, ensuring efficiency,
compliance, and adaptability in the dynamic sportswear market.
• Strategic Planning
• Financial Management
• Legal and Regulatory Compliance
• Information Technology (IT) Infrastructure
• Risk Management
• Management Information Systems (MIS)
• Human Resource Management

4. Linkages within the Value Chain

Adidas demonstrates effective linkages within its value chain, with seamless connections
between design and research and development (R&D). The company's innovative product
designs are realized through continuous R&D efforts, ensuring a harmonious integration of
creativity and technological advancements. Procurement is closely linked to quality control, as
Adidas maintains stringent standards for the materials and components sourced from its global
network of suppliers. The emphasis on quality at the procurement stage contributes directly to
the overall excellence of the final products. Manufacturing and logistics form interconnected
processes in Adidas' value chain. Efficient manufacturing is contingent on a well-coordinated
logistics network, ensuring the timely delivery of raw materials to production facilities, thereby
optimizing the entire production process. Marketing and sales are tightly integrated, with Adidas
leveraging effective marketing strategies to influence product sales. The success of marketing
campaigns directly impacts sales performance, creating a reciprocal relationship between these
two critical components of the value chain.
Customer service and returns are linked, as Adidas strives to provide responsive and
efficient customer service, addressing inquiries and handling returns promptly. This customer-
centric approach contributes to enhanced customer satisfaction and loyalty.
Innovation and technology development influence manufacturing processes within
Adidas' value chain. New technologies and materials developed through R&D are seamlessly
integrated into manufacturing, ensuring that products remain at the forefront of innovation.
The sustainability initiatives of Adidas are closely tied to its procurement practices. The
company actively seeks sustainable and eco-friendly materials, creating a direct linkage between
responsible sourcing and its commitment to environmental stewardship. Overall, Adidas' value
chain is characterized by well-established linkages, facilitating a cohesive and integrated
approach across its various business activities.
• Design and R&D Linkages
• Procurement and Quality Control Linkages
• Manufacturing and Logistics Linkages
• Marketing and Sales Linkages
 • Customer Service and Returns Linkages
• Technology Development and Manufacturing Linkages
• Logistics and Retail Linkages
• Sustainability Initiatives and Procurement Linkages

5. Conclusions and Recommendations

Conclusions:
1.Brand Resilience: Adidas has sustained a robust global brand recognized for innovation,
quality, and collaborations, contributing to its resilience in the competitive sportswear market.
2.Innovation and Sustainability: The company's commitment to innovation and sustainability,
evident in its product designs and sourcing practices, aligns well with evolving consumer
expectations and industry trends.
3.E-commerce Adaptation: Adidas has effectively adapted to the growth of e-commerce,
enhancing its online presence and providing customers with seamless digital experiences.
4.Community Engagement: The brand's active engagement with communities through
sponsorships and social initiatives positively influences its image and fosters brand loyalty.

Recommendations:
1.Digital Innovation: Continue investing in digital technologies to enhance the online shopping
experience, exploring emerging technologies such as augmented reality for a more immersive
customer journey.
2.Sustainable Practices: Strengthen sustainability initiatives by further reducing the
environmental impact, exploring circular economy principles, and communicating transparently
about progress in eco-friendly practices.
3.Innovative Product Lines: Foster a culture of innovation to consistently introduce cutting-edge
products, embracing emerging technologies and design trends to maintain a competitive edge.
4.Customer-Centric Approach: Enhance the overall customer experience by personalizing
marketing efforts, optimizing logistics for faster deliveries, and actively incorporating customer
feedback into product development.
5.Global Market Expansion: Explore opportunities for further market expansion, especially in
emerging markets, tailoring marketing strategies to diverse consumer demographics.

6. Bibliography
https://www.adidas-group.com/en/sustainability/social-impacts/supply-chain/

https://cheshnotes.com/hrm-organizational-culture-at-adidas/

https://dfreight.org/blog/an-insight-into-adidas-supply-chain-strategy/
https://www.researchgate.net/publication/
370593535_How_Effective_Supply_Chain_Management_of_Adidas

https://www.adidas.com/us/blog/932571-adidas-logos-history-and-meaning