Stratergic Paper-Addidas_sample 2

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Change Analysis 1 CHANGE ANALYSIS: ADIDAS By [Name] Course Professor's Name Institution Date

Change Analysis 2 LO 1: Change analysis Proposal Adidas AG, popularly known as Adidas, is a German-based manufacturing company specializing in footwear and apparel. It's headquartered in Herzogenaurach, Germany. The company is among the leading sportswear producer in Europe and holds the second position globally after Nike. Adidas brand products are marked by the iconic three stripes and have been kept as the company's trademark for decades. Adidas AG is involved in designing, manufacturing, and marketing a wide variety of athletic and sport lifestyle products. The company's product portfolio generally includes sports wears, footwear, and apparel such as bags, accessories, and fitness equipment. Company brand products are distributed through a wide variety of chain routes. For instance, the company may distribute through its own branded stores, wholesale stores, retail stores, department stores, sporting goods chains, organizations (NGOs), lifestyle retail chains, and e-retailers(Tighe, 2022). The list is not exhaustive and indicates the company's size and how much demand for its products is across the market. All products are offered under the iconic brand; Adidas. It also undertakes various product franchises. Adidas has constantly maintained market credibility for its stylish products. The scope of the firm's operations cover multiple continents; America, Europe, Africa, Asia-pacific, and the middle east. In a report released by Statistica, the number of employees at Adidas currently stands at 61, 401 employees globally (Tighe, 2022). The Adidas Group's annual net sales in 2021 were around 21.2 billion Euros. Much of it came from North America's greatest market, which accounted for 25% of overall sales. The company, however, experiences competition from companies in the market that offer similar brand products, such as Nike, Puma SE, Reebok, and Lulu lemon Athletica. Inc and ASICS, both locally and internationally.

Change Analysis 3 According to Tucci (2019), Digital disruption is the change that happens when new digital technologies or business models affect and shift the value proposition of the current goods and services in the market. For instance, with the rise of digital waves, a late entrant Netflix has become a poster child of disruptive innovation. The company pushed a once-market leader, Blockbuster, from the market, which dealt with DVDs and VHS tapes by introducing new web- based/streaming platforms (Zaman,2022). In this case, the focus is pinned on the implications of digital disruption in Adidas Company. There are many drivers for digital disruption: technology, market behavior, demands, innovation, the emergence of new business models (cutthroat), changes in customer tastes, and new production/distribution channels. According to TechTarget report, the rapid increase of mobile devices for personal use and work, popularly known as the consumerization of IT, is the reason for the rising potential of digital disruption across the vast majority of industries (Tucci, 2019). This disruption affects how customer expectations and behaviors evolve, causing organizations to shift how they create products and services and marketing strategies. The biggest transformations in the sportswear market were witnessed in 2021 following the Covid pandemic. The pandemic served as a wake-up call not only to Adidas but other companies with similar offerings and revealed that the ability to adapt to market uncertainties is invaluable (Intelligent Node, 2022). So what will the sportswear market look like through 2022 and beyond? Perhaps the most prominent to the individual buyer, direct-to-customer channels (DTC) will unquestionably become the new normal. Beyond the customer, Adidas and other sportswear companies have seen first-hand the benefits of relying on flexible supply chains. And perhaps no market adjustment is quite as stark as the adoption of digital distribution channels (Intelligent Node, 2020). Consequently, Adidas

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Change Analysis 4 has dramatically pivoted its operations to build up its eCommerce and digital marketing avenues. This direction came before 2020, but the pandemic expedited the process out of necessity. The sportswear market is "cutting out the middleman" or rather doing what is popularly known as disintermediation. The company has completely altered its multichannel distribution channel, transforming into eCommerce capabilities rather than physical stores and third-party vendors (Intelligent Node, 2020). According to Statistical, Adidas saw a DTC account for a greater share of their 2021 sales than in 2019 (Tighe, 2022). The company now attributes over 40% of sales to DTC, projected to surpass 50% by 2025 (Intelligent Node, 2020). Save for convenience, DTC channels have huge benefits for Adidas and other retail manufacturers by embracing the new-age technology. DTC has opened a new door for personalization. For instance, it provides access to user data from individual and demographic groups, enabling better recommendations and product assortment for Adidas. Tectonic shifts in the sportswear market call for a quick resurgence after the Covid- induced dip in sales. With a new profound commitment to online channels, Adidas sales through such channels ballooned magnificently. However, more efforts need to be applied so that the sales margin will be signed by the next five years. This can be done by investing more in digital marketing. Adidas has been hosting its ads on Snapchat and has seen a significant rise in ROI. It is, therefore, safe that the company continues to expand its digital advertising through other platforms, such as Twitter, Instagram, and the most populous one Tik Tok. The rationale for these new interventions is that DTC is a long-term marketing strategy. It provides direct access to communicate with consumers and thus builds on customer relationships and brand loyalty.

Change Analysis 5 LO2: Data Decision Process. Digital transformation requires an organization to develop a strategy to help the business achieve the desired goals. Most companies globally are adopting digital transformations after being challenged to improve their business processes and models. Information and data have become the main sources of revenue, asserting valuation and critical drivers in the contemporary information age (Tucci, 2019). There are various techniques that Adidas can use to detect changes that are appending in the market area. Such tools include implementing automation tools, cloud infrastructure, Artificial intelligence, and consumer engagement software. This shift proves cost-effective are an improvement from the traditional mediums like TV that were costly, ineffective in terms of coverage, and time-consuming. One strategy that Adidas could employ going forward is process transformation. Much focus within the corporate environment has been on devising new business processes that lower costs, improve quality, or minimize redundancy processing (Dieffenbacher, 2022). This is evidenced by the rising popularity of data analytics, APIs, IOTs, and machine technology. Adidas should leverage digitizing its sales strategy such that customers can order sportswear on any device. This process transformation could potentially place the organization at a competitive advantage and perhaps overtake its rivals like Nike. Robotic processing is another automation process that can help the company improve much on legal accounting and other back-end office processes. Another prominent strategy involves domain transformation. Companies like Amazon have experienced how this strategy works in the mega online retailer. By launching AWS, amazon has become the largest cloud computing service formerly in the hand of Microsoft. Amazon is a clear example of how new technologies redefine products and services and blur

Change Analysis 6 industry boundaries by creating new sets of non-traditional competitors. I believe Domain transformation can offer Adidas the most significant growth opportunities moving forward. In conclusion, companies operating in the modern business landscape are experiencing dramatic changes in management strategies due to digital transformation. New technology results in sudden appearances of new market opportunities and shifts in how customers choose, interact, and apply standards to their brands. As a result, modern organizations must be able to manage change effectively. This is evident in Adidas AG, which has established flexible supply channels, and eCommerce and is gradually migrating into the digital marketing arena.

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Change Analysis 7 References Dieffenbacher, S. F. (2022, November 29). Digital Transformation Strategy Framework, Tips & Examples . Digital Leadership. Retrieved December 9, 2022, from https://digitalleadership.com/blog/digital-transformation-strategy/ Intelligent Node, (2022, June 30). Here's what brands can learn from Nike & Adidas' Digital Disruption . Blog. Retrieved December 9, 2022, from https://www.intelligencenode.com/blog/what-brands-can-learn-from-nike-adidas-digital- transformation/ Tighe, D. (2022, March 21). Number of employees of the Adidas Group Worldwide 2000- 2021 . Statista. Retrieved December 8, 2022, from https://www.statista.com/statistics/268427/number-of-employees-of-the-adidas-group- worldwide-since-2000/ Tucci, L. (2019, July 31). What is Digital Disruption? Definition from whatis.com . CIO. Retrieved December 9, 2022, from https://www.techtarget.com/searchcio/definition/digital- disruption Zaman, R. (2022, December 4). Netflix disruptive innovation - renting to streaming . THE WAVES. Retrieved December 9, 2022, from https://www.the-waves.org/2022/03/15/netflix- disruptive-innovation-renting-to-streaming/

Stratergic Paper-Addidas_sample 2

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