Adidas - All Day I Dream About Sports - Case Study Example

ADIDAS Table of Contents Introduction 2 The Six Rights 3 Conclusion 7 References 8 Bibliography 9 Introduction Adidas - the name in the world of branded sportswear that stands for ‘All Day I Dream about Sports’, is an organisational excellence. The household brand across the globe dates back to 1924 when Adolf (“Adi”), after returning from World War I started making shoes in his mohter’s wash kitchen. His brother Rudolf Dassler joined the business and started their company with the name of Gerbuder Dassler Schuhfabrik or Dassler Brothers shoe factory. Before World War II they managed to sell 2000 pairs of shoes every year but unfortunately the bond between the brothers did not worked well and that splited up in the year 1948. Rudi splitted to form the company Puma and Adi formed Adidas. Since the initiation till date, Adidas stands as a unique name and phenomena across the globe and has established itself as the pioneer in the world of brands. In 1924, they first started making with shoes but now they have expanded to produce a quality range of products staring from footwear, sportswear, sport equipments and toiletries. The company record of 2008 says that it has 38,980 employees, and generated a profit of $ 933 million. The Six Rights With this statistics it is obvious that the organisation follows certain disciplined strategies that have lead to their potential growth. The six rights - Quality, Quantity, Place, Time, Item and Price determines the growth of an establishment to a large extent. It would be rather interesting to find out that how one of the largest brands of the world has manipulated these factors to its own benefit to generate profit. Quality - Adidas maintains a TQM phenomena or a Total Quality Control procedure and in doing so Adidas follows a very conservative Kaizen mind set. Kaizen mind set emphasizes upon quality over profit. According to it, an enterprise can prosper only if the customer who purchases its products is satisfied. Quality of a product assures its brand value. Quality can build a brand, similarly can destroy it too. At any point of time, it was not found with Adidas that it has compromised anything with quality. Rather to maintain it Adidas has taken lot of steps. The company has a wide range of products and for different range they have different pricing but the value and the quality of a product was always maintained. With changing fashion and technology they have improved there way of working (Kotelnikov, n.d.). Another vital phenomenon in managing quality comes with the work force of the company. In this sector too, Adidas has always maintained the quality of its work force and could attract and retail best of the industry talents. Stephen Frenkel and Duncan Scott has examined that how Adidas could effectively able to use its code of labor practice to regulate the labor standards of its main manufacturing suppliers (Frenkel & Scott, n.d.) Quantity – The second right of the six rights is that of the quantity. With the increased competition in the global scenario especially that in the industry of sports accessories’ manufactures and marketers, quantity management has been gaining increased importance day by day. Adidas had rightly identified the significance of the effective utilisation of the principle since long. The principle of quantity essentially requires the company to order for materials at the economic level, known as economic order quantity. The concept emphasises that there is no point in having excess of raw materials lying idle at the stock. Also, the company should produce goods in such a way that the finished goods do not remain with the distributors or the retailers for long. Adidas generally get their products made from different smaller units basically located in the Asian nations like India, China and Hong Kong. Therefore, management of quantity is all the more important as there is a complex step involved for the products to reach from the actual producers to the company and again from the distributor to the retailer and then to the end customer (i2, n.d.). Place – Place is one of the most important factors that contributes directly to the growth of the company. All the efforts that the management initiates, from product development to advertising, can fall flat if the products are not available to the potential customers at the time they require it. Like most of the other factors, Adidas have also managed the distribution channel very well. Any incumbent searching for Adidas product can easily find a store and get hold of the desired apparel or the accessory. The corporate website of the company contains the whole list of stores of the company and the prospective customer can easily locate the nearest to his house. Also, in most of the countries, the company have tie ups with many of the leading companies that sale their product. Sponsoring leading sporting organisations and events have made the company a house hold name and the distribution channel of the brand efficiently justifies it. Time – The life of the modern day is becoming increasing fast. And it is more so for such a company that is into the business of sporting accessories. Therefore, efficient time management is crucial for all the concerned parties, the company as well as the customers. Adidas has valued this very aspect since long. It has always provided its customers the desired products with in the shortest time interval. Also, it has tried to maintain efficiency with in the internal process of the company through effective time management. In order to excel further, the company should initiate more prudent measures to save customer’s time. It already has the option of shopping online, to get access of further unexplored markets, the company can think of delivering the products at the customer’s or athlete’s doorsteps. Item - Diversification is the essence of any business and if the diversification can be done in the domain of core competency then it is all the more brilliant thing. Adidas got the golden opportunity to diversify and launch a wide variety of product and their products ranges from sports wear, sports equipments and toiletries. Product is an essential part of the business and determines the fate and future of an organisation. The wide range of products manufactured by Adidas consists of currently manufactured wide range of sports shoes like adiStar Control5, the adiStar Ride which is a replacement of the adiStar Cushion6, the Supernova sequence which is launched as a replacement for the Supernova Control10 and last but not the least, the Supernova Cushion7 which is soon to be replaced by Supernova Glide. Apart from this Adidas also manufactures expensive shoes with the Kangaroo leather. This diversified products with a wide range of price shows that for the product selection Adidas follows the policy of catering a large targeted consumer and which is why they also keep a wide range of pricing so that every strata of consumer is able to reach the product. Following the latest fashion and trend is a mark of a flexibility and good business. Keeping this in mind, Adidas has also ventured into the field of accessories. Adidas designs and manufactures a wide range of watches, eyewear, bags, baseball caps and shocks. Apart from this the company also manufactures male and female deodorants, perfumes and aftershave lotions. Price – Price has been the most vital component of the marketing mix of any product. To have sustainable growth, a company requires having competitive pricing in this era of tremendous competition. At the present economic condition, with the heat of economic recession and global meltdown still on, pricing holds all the more importance. Adidas has performed very well in the pricing segment too. The company is selling many of the products at reduced prices to tap more market share. In the men’s outlet, Predator ‘PowerSwerve TRX FG Cleats’ is now available at $132, much lower than the original pricing of $ 220. The company has the ‘Response Baggy 5 Shorts’ available at $ 21. The pricing has also been reduced in the other segments of women’s segment and kid’s segment. The ‘Trefoil Hoodie’ is available at $ 33, $ 22 less from the normal price. The average pricing of the kid’s product has been approximately around $ 17. Such pricing methodologies helped the company attain new heights and create stiff competition for the competing brands (Adidas, n.d.). Conclusion Adidas after many splits and after passing through trying times has established itself as an established brand. It is a name in the world of sports products and this name was not earned in a single day. Adidas strictly followed the theory of six rights and by implementing these theories it has established itself as one of the leading global brands. References Adidas, No Date. Outlet. Shop Adidas. [Online] Available at: http://www.shopadidas.com/outlet/index.jsp?categoryId=2041575 [Accessed 03 December, 2009]. Frenkel & Scott, No Date. CODE COMPLIANCE AT adidas—THE HUMAN FACTOR. Corporate Citizenship and Human Right. [Online] Available at: http://www.hrichina.org/fs/downloadables/pdf/crf/CodeCompliance1.2003.pdf?revision_id=8737 [Accessed 03 December, 2009]. i2, No Date. Keeping adidas-Salomon One Step Ahead of the Competition. i2. [Online] Available at: http://www.i2.com/assets/pdf/CSS_CPG_adidassalomon_css7185.pdf [Accessed 03 December, 2009]. Kotelnikov, V. No Date, Kaizen & Total Quality Management. [Online] Available at: http://www.1000ventures.com/business_guide/mgmt_kaizen_tqc_main.html [Accessed 03 December, 2009]. Bibliography Baker, M.J. Marketing Theory & Practice (3rd edition) Basingstoke: Macmillan Press, 1995. Boje, D. M., No Date. Academics Studying Adidas. New Mexico State University: College of Business. [Online] Available at: http://business.nmsu.edu/~dboje/AA/academics_adidas.htm [Accessed 03 December, 2009]. Read More