Adidas AG

Abstract

This comprehensive analysis examines Adidas AG’s evolution from a small shoe factory
in Herzogenaurach, Germany, to its position as a global leader in the athletic wear
market. The paper traces the company’s history, highlighting key milestones such as the
founding of the Dassler Brothers Shoe Factory and the pivotal moments that have shaped
its brand identity, including the endorsement by Olympic athletes like Jesse Owens. It
also scrutinizes the multifaceted challenges Adidas faces in the global arena, including
supply chain disruptions exacerbated by the COVID-19 pandemic, particularly in
Vietnam, and the strategic initiatives undertaken to address these issues. Furthermore, the
paper discusses Adidas’ proactive measures to navigate complex trade policies,
geopolitical tensions, and the digital transformation of the retail sector. Adidas’
commitment to sustainability and digitalization is explored as a core component of its
competitive strategy in the 21st century. The paper concludes by reflecting on Adidas’
resilience, adaptability, and continuous innovation, which have enabled it to overcome
market complexities and uphold its mission to be the premier sports brand worldwide.
 Introduction of Adidas

Adidas AG, a name that resonates with quality, innovation, and the spirit of sports, stands
today as a colossus in the global athletic wear market. Founded in the quaint town of
Herzogenaurach, Germany, Adidas has its roots deeply embedded in the early 20th
century, when Adolf “Adi” Dassler, inspired by a fervent passion for sports and a skilled
craftsman’s hands, began producing shoes in his mother’s laundry room(1). From these
humble beginnings, the company has grown into an international symbol of performance
and style.
The brand’s journey began in earnest in 1924 when Adi and his brother Rudolf
established the “Gebrüder Dassler Schuhfabrik” (Dassler Brothers Shoe Factory). Their
vision was clear: to provide athletes with the best possible equipment. This vision bore
fruit during the 1928 Olympics when Lina Radke won a gold medal wearing their shoes,
and it was further cemented when the legendary Jesse Owens donned Dassler spikes to
claim four gold medals in the 1936 Berlin Olympics(2).
Post World War II, a rift between the Dassler brothers led to the birth of two separate
entities: Adidas and Puma. Adidas, derived from Adi Dassler’s name, continued to build
on its founder’s legacy of innovation and quality. The iconic three stripes, purchased
from a Finnish sports company in 1952, not only served as a distinctive design element
but also became synonymous with the brand itself(1).
Today, Adidas stands as the largest sportswear manufacturer in Europe and the second-
largest in the world after Nike(1). Its product range has expanded from footwear to a
wide array of apparel and accessories, catering to a diverse customer base that spans
professional athletes, sports enthusiasts, and fashion-conscious individuals. The brand’s
commitment to sustainability and digitalization is evident in its strategies and operations,
positioning it well within the dynamic and competitive landscape of the 21st century(3).
Adidas’ market share and presence are truly global, with significant penetration in the
EMEA region and a growing footprint across North America, Asia-Pacific, and other
territories(4). The company’s main competitors include Nike, Puma, and Under Armour,
each vying for dominance in a market driven by brand loyalty and cutting-edge
technology(5).
As Adidas continues to evolve, it remains steadfast in its original mission: to be the best
sports brand in the world. This ambition is reflected in its continuous innovation, whether
through advancements in shoe technology, partnerships with high-profile athletes and
celebrities, or ventures into the digital realm with initiatives like the integration of the
S/4HANA ERP system.

Business Challenges Faced by Adidas

Adidas, a behemoth in the sporting goods industry, has faced its fair share of challenges
as it operates on a global scale. The company’s resilience and adaptability have been put
to the test by a variety of factors that impact multinational corporations. From navigating
complex international trade policies that influence its global supply chain and distribution
networks(1), to dealing with the repercussions of geopolitical tensions and economic
fluctuations, Adidas has had to be nimble and strategic in its approach.
The company has also contended with supply chain disruptions, which have been
exacerbated by global crises such as the COVID-19 pandemic. These disruptions have
led to facility closures and reduced working hours, as seen with the significant impact of
closures in Vietnam(2). Such challenges have required Adidas to respond with speed and
agility, taking measures to secure additional capacity, expedite transit modes to avoid
delays, and move production to other source countries to leverage the agility of its global
supply base(2).
Moreover, Adidas has had to manage the availability of shipping containers and navigate
port congestions, acting swiftly to secure air freight and rail capacities, manage ocean
freight carriers, and adjust planning processes for early shipments(2). These actions have
been crucial in limiting the negative impact on product availability and consumer
delivery time, ensuring that the company maintains its reputation for quality and
reliability.
In addition to operational hurdles, Adidas has had to keep pace with the rapid evolution
of consumer preferences and the digital transformation of the retail landscape. The
company’s commitment to sustainability and digitalization has been a focal point in its
strategy to overcome these challenges and remain competitive in the market(3).
Despite these obstacles, Adidas has demonstrated a remarkable ability to adapt and
evolve, underpinned by a strong commitment to innovation and excellence. The
company’s proactive measures and strategic initiatives have allowed it to continue
thriving in the face of adversity, solidifying its status as a leader in the sporting goods
industry. As Adidas moves forward, it continues to leverage its global presence, brand
strength, and operational expertise to navigate the complexities of the global market and
drive future growth.

Supply Chain Disruptions: The disruption of supply chains has indeed been one of the
most significant challenges faced by Adidas, particularly in the Asia-Pacific region,
which serves as a vital nexus for the company’s manufacturing and logistics operations.
The COVID-19 pandemic has been the catalyst for widespread upheaval, with lockdowns
and factory closures causing considerable strain, especially in Vietnam, a key production
location for Adidas(1). The impact of these disruptions has been far-reaching, creating a
domino effect that has led to a shortfall in production capabilities and subsequent delays
in product availability(1).
This situation has not only affected Adidas’ ability to meet consumer demand but has
also had a tangible impact on the company’s financial health, with revenue growth taking
a hit due to these supply chain challenges(1). The loss of 100 million units in the second
half of the year due to factory closures, coupled with ongoing shipping woes, has further
exacerbated the issue, leading to a significant loss in sales(1). The company has had to
navigate a complex landscape of reduced manufacturing capacity, logistical bottlenecks,
and increased costs, all while striving to maintain its market position and customer
satisfaction levels(2).
Adidas has responded to these challenges with a series of measures aimed at mitigating
the impact on its operations and financial performance. These include diversifying its
manufacturing base, exploring alternative supply routes, and investing in digital solutions
to enhance its supply chain resilience(3). Despite these efforts, the lingering effects of the
pandemic continue to pose a threat to the stability of global supply chains, and Adidas,
like many other global brands, remains vigilant in its approach to overcoming these
obstacles.
The company’s proactive stance on managing supply chain risks is reflected in its
commitment to ensuring fair labor practices and safe working conditions throughout its
global supply chain, as outlined in the Adidas Workplace Standards(3). By upholding
these standards and assisting key manufacturing partners in securing financing to weather
the COVID-19 crisis, Adidas has demonstrated its dedication to not only navigating the
immediate challenges but also building a more robust and sustainable supply chain for
the future(3).

Geopolitical and Macroeconomic Challenges: The geopolitical landscape has also

posed challenges for Adidas. Tensions in key markets and macroeconomic fluctuations
have created an environment of uncertainty. Economic downturns, inflation, financial
market turbulence, and currency exchange rate fluctuations have all played a role in
affecting the company’s performance(2). These factors, combined with sociopolitical
issues such as military conflicts and civil unrest, particularly in regions where Adidas has
a strong presence, have had the potential to negatively impact the company’s business
activities and financial outcomes(2).
Market Dynamics: The termination of the Yeezy partnership, a significant contributor to
Adidas’ brand appeal and revenue, has presented a unique challenge. The loss of this
partnership has necessitated a strategic pivot and has led to a reassessment of the
company’s marketing and product development strategies(3). Additionally, Adidas has
had to contend with high inventory levels, which have required increased promotional
activity to balance stock levels, especially in the North American market(4).
Competitive Pressures: In an industry driven by innovation and brand loyalty, Adidas
faces intense competition from other major players like Nike, Puma, and Under Armour.
Keeping pace with these competitors requires constant innovation and the ability to
quickly respond to changing consumer preferences and market trends.
Sustainability and Digitalization: As consumers become increasingly conscious of
environmental and social issues, Adidas has recognized the need to integrate
sustainability into its business model. The company has made strides in this area, but the
challenge remains to do so without compromising profitability. Similarly, the digital
transformation of the retail landscape has necessitated a shift in Adidas’ approach to sales
and customer engagement, with a greater emphasis on e-commerce and digital marketing
initiatives.
In response to these challenges, Adidas has embarked on a journey of transformation,
focusing on streamlining operations, enhancing digital capabilities, and reinforcing its
commitment to sustainability. The integration of the S/4HANA ERP system is a
testament to the company’s dedication to overcoming these obstacles and emerging
stronger.

General Application of ERP Systems ERP Enterprise Resource Planning (ERP)

systems are the backbone of modern business operations, providing a comprehensive
suite of tools designed to integrate and streamline an organization’s core functions and
processes. The concept of ERP systems emerged in the 1990s, and since then, they have
evolved into complex platforms that support a wide range of business activities, including
finance, human resources, manufacturing, supply chain management, services,
procurement, and more(1).
At its core, an ERP system serves as a centralized hub for all critical business data,
eliminating data silos and ensuring that information flows seamlessly across departments.
This integration is crucial for businesses of all sizes, as it allows for more efficient
management of day-to-day operations and supports strategic decision-making. By
automating routine tasks and providing real-time insights into business performance, ERP
systems help organizations increase productivity and profitability(2).
Automation and Efficiency: ERP systems automate critical business processes, reducing
the need for manual intervention and minimizing the risk of errors. This automation
extends across various departments, from accounting and finance to human resources and
supply chain management. For example, in finance, an ERP system can automate
invoicing, payment processing, and financial reporting, leading to faster closing of books
and more accurate financial records(1).
Integration and Collaboration: By providing a single source of truth, ERP systems
enhance collaboration within an organization. Employees from different departments can
access the same data, ensuring that everyone is working with the most up-to-date
information. This level of integration is particularly beneficial for cross-functional
projects and initiatives, where coordination and data sharing are essential for success(2).
Scalability and Flexibility: Modern ERP systems are designed to be scalable and
flexible, accommodating the growth and changing needs of a business. As organizations
expand, add new product lines, or enter new markets, the ERP system can adapt, adding
new modules or functionalities as required. This scalability ensures that the ERP system
remains a valuable asset throughout the company’s lifecycle(3).
Data Analysis and Business Intelligence: ERP systems often include advanced analytics
and business intelligence capabilities, enabling organizations to turn their data into
actionable insights. With built-in dashboards and reporting tools, decision-makers can
monitor key performance indicators (KPIs), identify trends, and make informed decisions
based on real-time data(4).
Support for Global Operations: For multinational companies, ERP systems support
global operations by managing multiple currencies, tax regulations, and compliance
requirements. This global functionality ensures that businesses can operate efficiently
across borders, maintaining compliance with local laws and regulations while
standardizing processes across international subsidiaries(5).
In summary, ERP systems are essential for businesses seeking to optimize their
operations, improve efficiency, and gain a competitive edge in today’s fast-paced market.
The right ERP system can transform an organization, enabling it to achieve its strategic
goals and drive innovation.

S/4HANA ERP in Adidas S/4HANA ERP in Adidas

Adidas’ strategic decision to adopt the SAP S/4HANA ERP system marks a
transformative era in the company’s storied history. This pivotal move aligns with
Adidas’ broader vision of creating a more centralized and streamlined operational
framework, which is essential for driving efficiency and agility throughout its extensive
value chain(1). The implementation of S/4HANA is a clear indication of Adidas’
commitment to innovation and continuous improvement, reflecting its dedication to
maintaining a competitive edge in the dynamic global market.
The S/4HANA ERP system serves as the digital core for Adidas, integrating complex
business processes and providing a unified platform for the company’s diverse
operations. This integration is crucial for Adidas as it seeks to simplify its IT landscape,
reduce redundancies, and eliminate the inefficiencies associated with managing disparate
systems(1). By consolidating its core business processes into a single ERP system,
Adidas can achieve greater transparency, faster data processing, and more accurate
analytics, which are vital for making informed business decisions.
Moreover, the move to S/4HANA is not just about operational efficiency; it’s about
reshaping the entire business model to be more responsive to consumer needs and market
demands. The system’s real-time data processing capabilities enable Adidas to quickly
adapt to changes in consumer behavior, streamline its supply chain, and bring innovative
products to market more rapidly(1). This agility is particularly important in the fast-paced
world of sportswear and fashion, where trends can change overnight and consumer
expectations are continually evolving.
The adoption of S/4HANA also underscores Adidas’ commitment to digital
transformation, a key component of its ‘Own the Game’ strategy. This strategy focuses
on direct-to-consumer engagement, digitalization of channels, and leveraging data to
personalize consumer experiences(1). With S/4HANA at the helm, Adidas is well-
positioned to execute this strategy effectively, ensuring that it remains at the forefront of
the industry in terms of both technological innovation and consumer satisfaction.

Centralization and Simplification: The centralization and simplification of Adidas’ IT

landscape through the S/4HANA ERP system represent a monumental leap in the
company’s digital transformation journey. By consolidating its previously disparate
systems into a unified platform, Adidas has achieved a remarkable simplification of its IT
infrastructure. This strategic move has not only reduced the complexity and maintenance
overheads but has also provided a single source of truth for the entire organization, which
is crucial for maintaining data integrity and consistency across global operations(1).
The benefits of this centralization extend to nearly every aspect of Adidas’ business. With
a unified platform, Adidas has streamlined its processes, enabling faster decision-making
and more agile responses to market changes. The integration of nearly triple the number
of APIs compared to legacy systems has opened up new possibilities for innovation and
integration with third-party services and applications1. This increase in operational
performance has allowed Adidas to be more responsive to consumer needs, adapt to new
business models such as direct-to-consumer, and support the projected growth in its e-
commerce business(2).
Moreover, the S/4HANA ERP system has facilitated improved collaboration and
communication within the company. Teams across different departments and
geographical locations can now work together more effectively, with access to real-time
data that informs their strategies and day-to-day activities. This level of collaboration is
essential for a company like Adidas, which operates on a global scale and needs to
synchronize its efforts to maintain a cohesive brand image and strategy(1).
The centralization has also enabled Adidas to leverage newer technologies more
effectively. The digital core of S/4HANA allows the company to establish a standardized,
more simplistic platform for standalone businesses, improving integration, reporting, and
communication across all standalone businesses(3). This is particularly important as
Adidas continues to grow and expand into new markets, requiring a robust and scalable
system that can support this growth.

Enhanced Performance and Recovery:

Adidas’ implementation of the S/4HANA system on a formidable 9-TB machine

equipped with 448 CPUs has significantly elevated the company’s performance
capabilities. This robust infrastructure is a testament to Adidas’ commitment to
technological excellence, ensuring that even the most complex computations and the
processing of large volumes of data are handled with remarkable ease and efficiency(1).
The ability to swiftly manage and analyze data is crucial for Adidas, as it supports real-
time decision-making and enhances the overall agility of the business.
The enhanced performance of the S/4HANA system is not just about speed; it’s about the
seamless integration of various business processes. With such a powerful system, Adidas
can synchronize its global operations, from supply chain management to customer
relationship management, on a single platform. This integration is key to maintaining a
competitive edge in the fast-paced world of sports apparel and equipment.
Furthermore, the S/4HANA system’s recovery capabilities are equally impressive. With a
recovery time that is 59% faster than the service-level agreement mandate, Adidas
ensures business continuity and resilience(1). In the event of a system outage or other
disruptions, the rapid recovery time minimizes downtime, protecting Adidas from
potential revenue loss and maintaining the trust of customers and partners.
This level of performance and recovery is made possible by utilizing Amazon FSx for
NetApp ONTAP, which allows Adidas to quickly restore large HANA databases and
load HANA data from disk to memory. The recovery process time is a mere 44 minutes,
significantly surpassing the mandated requirements and providing Adidas with the
confidence that its operations can withstand and quickly recover from unforeseen
challenges(1).

Data-Driven Decision Making: The integration of S/4HANA on AWS has been a

pivotal step for Adidas in becoming a more data-driven business. This strategic move has
equipped Adidas with advanced analytics capabilities, data science, and enterprise
reporting tools that are essential for modern businesses to thrive in a data-centric
world(1). With the power of its data now fully harnessed, Adidas is able to make more
informed and strategic decisions that are backed by concrete data insights.
The cloud-based data lake on AWS is a cornerstone of this new data-driven approach. It
provides Adidas with a comprehensive view across its internal operations and consumer-
facing activities, ensuring that every decision is informed by the most up-to-date
information available(1). This visibility is crucial for Adidas as it navigates the complex
landscape of global retail, where understanding consumer behavior and operational
efficiency can make the difference between success and failure.
Moreover, the data lake enables Adidas to delve into new business insights and consumer
intelligence that were previously inaccessible. By analyzing this rich data, Adidas can
identify trends, predict consumer behavior, and tailor its strategies to meet the ever-
changing demands of the market. This level of insight is invaluable for Adidas as it seeks
to maintain its position as a leader in the sporting goods industry.
The use of Amazon SageMaker, AWS’s service that helps developers and data scientists
build, train, and deploy machine learning models quickly, has further enhanced Adidas’
ability to predict seasonal demand for products. This predictive power ensures that the
right product is available at the right warehouse or retail store at the right time, which is
key to increasing customer satisfaction(1). Additionally, this capability extends to sales
data, enabling Adidas to provide personalized product and fit recommendations, thereby
deepening brand loyalty and providing a more personal shopping experience.
In essence, the integration of S/4HANA on AWS has not just been about upgrading
Adidas’ technological infrastructure; it has been about transforming the company’s entire
approach to business. By becoming more data-driven, Adidas is better equipped to meet
the challenges of today’s retail environment and to seize opportunities that arise from a
deeper understanding of its data. This transformation is expected to continue driving
innovation and growth for Adidas, as it leverages the full potential of its data to remain at
the forefront of the sporting goods industry.

Consumer Experience and Personalization at Adidas

The integration of the S/4HANA ERP system into Adidas’ operations has been a game-
changer for enhancing the consumer experience. By harnessing the power of machine
learning and advanced analytics, Adidas has been able to offer a level of personalization
that goes beyond the industry standard. This strategic use of technology enables Adidas
to deliver personalized discounts, provide early access to new releases, and offer priority
customer service, all of which are tailored to the individual preferences and behaviors of
their customers. The sophistication of the S/4HANA system allows for a nuanced
approach to customer engagement, where every interaction is an opportunity to learn and
refine the consumer profile. This continuous learning loop ensures that Adidas not only
anticipates customer needs but also proactively addresses them, fostering a sense of
individual attention and care that strengthens brand loyalty. Moreover, the system’s
predictive capabilities mean that Adidas can optimize its inventory distribution, ensuring
that popular items are readily available to consumers, thereby enhancing the overall
satisfaction with the brand. This level of attentiveness to consumer needs and preferences
is what sets Adidas apart in a competitive marketplace, making the brand not just a
choice, but a personal companion to its customers’ athletic and lifestyle aspirations.

Deepening Brand Loyalty: The ability to personalize the shopping experience is not just
about meeting customer expectations; it’s about exceeding them. Adidas understands that
every customer interaction is an opportunity to strengthen the relationship between the
brand and the consumer. By offering personalized experiences that resonate with the
individual’s style and preferences, Adidas deepens brand loyalty and transforms casual
shoppers into brand advocates(2).
Data-Driven Personalization: At the heart of Adidas’ personalization strategy is a
wealth of consumer data, meticulously analyzed to understand and predict customer
preferences and behaviors. Adidas’ digital strategy focuses on creating personalized
experiences across the consumer journey, ensuring that every touchpoint is an
opportunity to engage the customer with content and offers that are relevant and
timely(2).
Innovative Marketing: Adidas’ approach to personalized email marketing is a prime
example of how the company uses technology to build data-driven customer experiences.
By incorporating dynamic content in its email campaigns, Adidas matches subscribers
with the most relevant content based on data points like language, location, and product
interest. This level of personalization adds value to the lives of consumers by getting
compelling content in front of the right consumer at the right time(2).
Enhancing the Mobile Experience: Recognizing the shift towards mobile, Adidas has
optimized its mobile experience to ensure that consumers have a seamless and
personalized interaction with the brand, whether they are browsing products, making
purchases, or engaging with Adidas’ content. The mobile platform is a critical touchpoint
for Adidas, and the company has invested in making it a cornerstone of the personalized
consumer journey(2).
Leveraging Consumer Insights: Adidas’ growth strategy is heavily influenced by
consumer insights, which are derived from the analysis of digital data. These insights
enable Adidas to tell stories that are not only compelling but also highly relevant to its
consumers. By understanding its consumers better, Adidas can deliver stories and
experiences that resonate more deeply and foster a stronger connection with the brand(3).
Virtual and Augmented Reality: Looking to the future, Adidas is exploring the use of
augmented reality (AR) and virtual reality (VR) to further enhance the consumer
experience. These technologies have the potential to revolutionize the way consumers
interact with Adidas products, allowing them to virtually try on footwear and apparel, and
experience the brand in immersive new ways(1).

Predictive Analytics and Machine Learning at Adidas

Adidas’ foray into predictive analytics and machine learning represents a significant leap
towards a future where data not only informs but also drives business decisions. By
leveraging Amazon SageMaker, Adidas’ data scientists have crafted a sophisticated
ecosystem that can swiftly build, train, and deploy machine learning models(1). This
technological prowess enables the company to anticipate seasonal demand with
remarkable precision, ensuring that inventory levels across warehouses and retail stores
are optimally managed to meet consumer needs(1).
The implications of this capability are profound. It allows Adidas to maintain a delicate
balance between overstocking and stockouts, thus optimizing the supply chain and
enhancing customer satisfaction. The agility afforded by predictive analytics means that
Adidas can respond in real-time to shifting market trends and consumer preferences, a
critical advantage in the fast-paced world of fashion and sportswear(1).
Moreover, the extension of this capability to sales data has opened up new avenues for
personalized consumer engagement. Adidas can now offer tailored product
recommendations and fitting advice, creating a bespoke shopping experience that
resonates with individual consumers. This level of personalization not only deepens
brand loyalty but also elevates the consumer journey to one that is intuitive, responsive,
and deeply satisfying(1).
High-Performance Computing and 3D Design Innovation
The integration of high-performance computing (HPC) on AWS has propelled Adidas
into a new era of product design and development(2). HPC allows Adidas’ design teams,
dispersed across the globe, to collaborate on complex workloads simultaneously,
breaking down geographical barriers and fostering a culture of innovation(2).
This technological advancement has been particularly transformative for Adidas’ 3D
design capabilities. By modernizing these capabilities at scale, Adidas has significantly
accelerated the design and creation process. The ability to rapidly prototype and iterate
designs in a virtual environment has not only reduced costs but also shortened the time-
to-market for new products(2).
Furthermore, HPC has enabled Adidas to engage in greater collaboration with consumers
and designers alike. The creation of digital twins, virtual representations of product lines,
allows for a more interactive and consumer-centric design process. Consumers can now
have a say in the design of the products they love, and designers can experiment with
new concepts without the constraints of physical prototyping(2).
In essence, Adidas’ investment in predictive analytics, machine learning, and high-
performance computing is a clear reflection of its commitment to staying at the vanguard
of technological innovation. These initiatives are not merely about keeping pace with
industry trends; they are about setting new standards, redefining the boundaries of what is
possible, and charting a course for the future of sportswear design and retail.
Future Plans and Strategic Vision
As Adidas gazes into the horizon, its blueprint for the future is marked by a bold and
transformative initiative: the implementation of an SAP S/4HANA system that will
exceed 40 TB by the year 2027(1). This project, aptly named TRANS4RM, is not just an
upgrade but a complete overhaul of the company’s digital backbone. By leveraging the
robust capabilities of AWS, Adidas is poised to create one of the largest SAP S/4HANA
installations globally, a move that will redefine the scale and scope of enterprise resource
planning systems(1).
The TRANS4RM project is a cornerstone of Adidas’ strategic plan ‘Own the Game,’
which outlines the company’s commitment to doubling its e-commerce sales to between
€8 billion and €9 billion by 2025(1). This strategy is deeply rooted in sport and places the
consumer at the heart of everything Adidas does, with a focus on increasing brand
credibility, enhancing consumer experiences, and pushing the boundaries in
sustainability(2).
Revolutionizing Global Operations: The new S/4HANA system will serve as the nerve
center for Adidas’ global operations, providing unprecedented levels of efficiency and
data processing power. With the ability to handle vast amounts of data in real-time,
Adidas will gain insights into every facet of its business, from supply chain logistics to
customer preferences(1).
Optimizing Compute Resources: By harnessing the scalability and elasticity of AWS,
Adidas will optimize its compute resources to handle peak demands and support the
projected growth in its e-commerce business. This flexibility is crucial for adapting to the
seasonality of the sporting goods industry and ensuring that Adidas remains agile in a
rapidly evolving market(3).
Driving Innovation: The TRANS4RM project is a testament to Adidas’ mindset of
innovation, which serves as an enabler across the entire company. By investing more than
€1 billion in digital transformation, Adidas is not only digitizing core processes across the
value chain but also expanding its data and technology expertise internally(1).
Enhancing Customer Engagement: The integration of the S/4HANA system with AWS
will enable Adidas to leverage machine learning techniques to deliver personalized
customer experiences. From product recommendations to fit guidance, Adidas will use
technology to create a more intimate and tailored shopping experience for its
consumers(3).
Sustainability and Climate Neutrality: As part of its commitment to sustainability,
Adidas aims to make nine out of ten articles from sustainable materials by 2025. The
S/4HANA system will play a critical role in achieving this goal by providing the data and
analytics necessary to make informed decisions about materials, production processes,
and supply chain management(1).

Conclusion
The journey of Adidas through the digital landscape has been one of strategic foresight
and bold decision-making. The company’s integration of SAP’s S/4HANA ERP system
on AWS is a testament to its commitment to remaining at the forefront of the sporting
goods industry. This digital transformation is not merely a technological upgrade but a
fundamental reimagining of how Adidas operates, engages with consumers, and
innovates products(1).

Strategic Growth and Consumer Focus: Adidas’ “Own the Game” strategy, which
aims to double e-commerce sales to between €8 billion and €9 billion by 2025,
underscores the company’s shift towards a direct-to-consumer (DTC) business model(2).
This strategy is deeply rooted in sport and places the consumer at the heart of everything
Adidas does. By focusing on brand credibility, consumer experience, and sustainability,
Adidas is poised to capitalize on the acceleration of favorable long-term structural
trends(3).

Sustainability and Innovation: The commitment to sustainability is evident in Adidas’

goal that nine out of ten articles will be made from sustainable materials by 2025(2). This
dedication to environmental stewardship is not only a moral imperative but also a
strategic one, as consumers increasingly demand responsible business practices.

Digital Transformation Investment: The investment of more than €1 billion into digital
transformation supports core processes across the entire value chain, from 3D design
capabilities to sourcing and selling products(1). This investment is a clear indication of
Adidas’ resolve to harness the power of technology to create efficiencies and foster closer
relationships with consumers.

Impact on Business Operations: The digital transformation has enabled Adidas to

leverage machine learning techniques to deliver personalized customer experiences and
create digital twins of products to accelerate the product development process(1). These
advancements have the potential to revolutionize the way Adidas designs, manufactures,
and markets its products.

Looking Ahead: As Adidas continues to navigate the challenges and opportunities of the
digital age, its strategic focus on innovation, consumer engagement, and sustainability
will be critical in driving growth and maintaining its position as a leader in the sporting
goods industry. The company’s ability to adapt and transform will determine its success
in an increasingly competitive and fast-paced global market.
In conclusion, Adidas’ digital transformation, exemplified by the adoption of the
S/4HANA ERP system, reflects a broader trend in the business world towards data-
driven decision-making and consumer-centric approaches. It is a compelling case study
of how traditional companies can reinvent themselves in the digital era, and it offers
valuable insights for other organizations looking to embark on similar journeys.

REFERENCES :
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