Table of Content

Introduction..................................................................................................................2
Types of Organizations in the Sports Industry...............................................................2
Market Size and Growth of the International Business Environment............................2
Growth Drivers...............................................................................................................3
Critical Analysis of Organizational Complexities.....................................................4
Complexities in Organizational Structure......................................................................4
Size and Its Impact.........................................................................................................4
Scope and Market Dynamics..........................................................................................4
Fact Sheet: Adidas AG.................................................................................................5
Background Details of the Organization........................................................................5
Products and Services.....................................................................................................5
Size and Scope................................................................................................................5
Vision, Mission, and Business Objectives.....................................................................6
Organizational and Legal Structure................................................................................6
Key Stakeholders............................................................................................................6
Business Functions and Organizational Chart................................................................7
Size and Scope of Different Types of Organizations.....................................................7
Analysis of Adidas AG.................................................................................................7
Internal Department Interrelationships and Business Objectives...................................7
Departmental Roles and Interrelationships....................................................................8
Conclusions Based on Critical Impact Analysis........................................................9
Overview of Business Structures...................................................................................9
Impact on Business Objectives.....................................................................................10
Successful Interrelationships........................................................................................10
Challenges and Recommendations...............................................................................11
References...................................................................................................................11
Introduction

Adidas AG is a global leader in the sportswear industry, renowned for its innovative
products and strong brand identity. Founded in 1949 in Herzogenaurach, Germany,
Adidas has grown to become one of the most prominent and recognizable brands in
sports apparel, footwear, and accessories. The company’s commitment to
performance, style, and sustainability has helped it maintain a significant presence in
both the professional sports arena and the broader consumer market. This analysis
will provide an overview of the types of organizations within the sports industry, the
market size and growth of Adidas, and the key drivers fueling its success.

Types of Organizations in the Sports Industry

The sports industry is diverse, consisting of various types of organizations that

contribute to its development and popularity. Adidas operates in this multifaceted
environment, engaging with several key sectors:

Private Sector Companies: Adidas is a leading private sector company, manufacturing

and marketing sportswear, footwear, and equipment. It competes directly with other
global giants such as Nike and Puma, offering products that cater to a wide range of
sports, including football, basketball, running, and training.

Public Sector Collaborations: Although primarily a private entity, Adidas collaborates

with public sector organizations, including international sports federations and local
government bodies. Through partnerships with events like the FIFA World Cup and
the Olympic Games, Adidas contributes to the promotion of sports and physical
activity on a global scale.

Voluntary Sector and NGOs: Adidas actively engages with voluntary sector
organizations and non-profits to support community development and sports
initiatives. Programs like the “Adidas Breaking Barriers” project promote diversity
and inclusion in sports, while partnerships with local sports clubs help foster
grassroots participation and youth engagement in physical activities.

Market Size and Growth of the International Business Environment

Adidas operates in a highly competitive and expansive global sportswear market. As

of 2023, the global sportswear market is valued at approximately $380 billion, with
Adidas holding a substantial share alongside other major players. The company has a
strong presence in key markets across North America, Europe, and Asia-Pacific, with
emerging markets such as Latin America and Africa offering new growth
opportunities.

Global Market Presence: Adidas is the second-largest sportswear brand globally,

behind only Nike. It has over 2,500 stores worldwide and operates in more than 160
countries. The company’s focus on expanding its direct-to-consumer (DTC) business
model, particularly through e-commerce, has contributed significantly to its growth in
recent years.

Product Segmentation: Adidas' product offerings are segmented into several

categories, including footwear, apparel, and accessories. The footwear segment is the
most significant, contributing to over 50% of the company’s total revenue.
Innovations in performance and lifestyle footwear have been key to sustaining its
competitive edge.

Revenue and Financial Growth: In 2023, Adidas reported revenues of approximately

€22 billion, reflecting steady growth despite challenges such as fluctuating demand
and supply chain disruptions. The company’s strategic focus on digital
transformation, sustainability, and brand collaboration has played a crucial role in
driving this growth.

Growth Drivers

Several factors have contributed to the sustained growth and market leadership of
Adidas:

Brand Innovation and Product Development: Adidas invests heavily in research and
development to create innovative products that meet the needs of both athletes and
casual consumers. The introduction of technologies like Boost cushioning and the use
of sustainable materials, such as recycled plastics in its "Parley for the Oceans"
collection, have reinforced its market position.

Digital Transformation and E-commerce Expansion: Adidas has embraced digital

transformation to enhance consumer engagement and streamline its operations. The
company’s e-commerce platform has become a vital growth driver, with online sales
contributing significantly to overall revenue. Digital initiatives, such as the Adidas
app and personalized shopping experiences, have helped increase brand loyalty and
consumer satisfaction.

Sustainability and Corporate Responsibility: Sustainability is a core pillar of Adidas’

growth strategy. The company has set ambitious targets to reduce its carbon footprint,
increase the use of sustainable materials, and promote circular fashion through
initiatives like the “End Plastic Waste” campaign. These efforts resonate with
environmentally conscious consumers and enhance the brand’s reputation.

Strategic Collaborations and Partnerships: Adidas leverages strategic collaborations

with high-profile athletes, sports teams, and fashion designers to expand its market
reach and influence. Partnerships with personalities like Lionel Messi, Beyoncé, and
Kanye West, as well as collaborations with brands like Stella McCartney and Prada,
have elevated Adidas’ appeal across different consumer segments.
Critical Analysis of Organizational Complexities

Complexities in Organizational Structure

Adidas AG operates within a highly complex organizational framework designed to

manage its vast global operations effectively. The company’s organizational structure
is a blend of hierarchical and matrix elements, which allows it to remain agile and
responsive to the dynamic demands of the sportswear market. The structure is divided
into functional and geographical segments, each responsible for specific aspects of the
business, such as product development, marketing, and regional management. While
this approach enables specialization and market-specific strategies, it can also create
challenges in coordination and communication. The alignment of global initiatives
with local market needs can lead to operational silos and inefficiencies, making it
difficult to execute cohesive strategies across different regions. As Adidas continues
to expand, maintaining an effective organizational structure that supports both
innovation and consistency will be critical.

Size and Its Impact

The sheer size of Adidas significantly impacts its operations, presenting both
opportunities and challenges. As one of the largest sportswear companies in the
world, Adidas employs over 60,000 people and manages a network of suppliers,
retailers, and distribution centers across more than 160 countries. This extensive scale
allows the company to leverage considerable bargaining power in negotiations and
achieve economies of scale in production and distribution. However, managing such a
vast workforce and supply chain necessitates robust systems and processes to ensure
operational efficiency and product quality across all markets. The complexity of
managing large-scale operations often leads to bureaucratic processes that can slow
down decision-making. Additionally, the company must continuously invest in
infrastructure and technology to support its expansive business model, which can be a
significant financial and logistical burden.

Scope and Market Dynamics

The scope of Adidas' operations extends beyond traditional sportswear into lifestyle
products and fashion collaborations, creating a broad and dynamic market presence.
The company has successfully positioned itself at the intersection of sports
performance and lifestyle fashion, appealing to a diverse consumer base that ranges
from professional athletes to fashion-conscious consumers. This broad scope requires
a versatile approach to product development, marketing, and branding, which adds
layers of complexity to its organizational structure. Moreover, Adidas must navigate
rapidly evolving market dynamics, including shifts in consumer preferences,
technological advancements, and competitive pressures from both established brands
and new entrants. While Adidas' ability to innovate and collaborate with high-profile
designers and celebrities has enhanced its market position, balancing these diverse
initiatives within a cohesive brand strategy remains a constant challenge.
Fact Sheet: Adidas AG

Background Details of the Organization

Adidas AG, headquartered in Herzogenaurach, Germany, is a leading global

sportswear manufacturer with a rich history dating back to 1949. Founded by Adolf
"Adi" Dassler, the company initially focused on producing high-quality athletic
footwear and has since expanded into a wide range of sports apparel, equipment, and
accessories. Adidas is renowned for its commitment to innovation, performance, and
style, consistently pushing the boundaries of sportswear technology and design.
Today, Adidas operates in over 160 countries and is recognized as one of the most
iconic and influential brands in the sports industry.

Products and Services

Products:
Adidas offers an extensive range of products that cater to various sports and lifestyle
segments. Its product portfolio includes:

 Footwear: Performance and lifestyle footwear, including running shoes, soccer

cleats, basketball shoes, and fashion sneakers.
 Apparel: Sportswear such as jerseys, jackets, training gear, and casual wear for
men, women, and children.
 Accessories: Sports accessories like bags, caps, socks, and athletic equipment.
 Collaborations: Limited-edition products in collaboration with fashion designers,
athletes, and celebrities, enhancing its appeal in the lifestyle and streetwear
segments.

Services:
Adidas provides a range of services aimed at enhancing customer experience and
brand loyalty:
 Customization: The "miadidas" service allows customers to personalize their
footwear and apparel with custom colors, materials, and graphics.
 Digital Services: The Adidas app and website offer personalized shopping
experiences, fitness tracking, and exclusive access to new product launches and
promotions.
 Sustainability Initiatives: Programs like “Adidas Parley” focus on reducing
environmental impact by recycling ocean plastics into high-performance
products.

Size and Scope

Adidas AG is the second-largest sportswear company globally, with annual revenues

exceeding €22 billion as of 2023. The company operates over 2,500 retail stores and
has a robust online presence, reaching consumers worldwide. Its primary markets
include North America, Europe, and Asia-Pacific, with significant growth
opportunities in Latin America and Africa. Adidas employs more than 60,000 people
and maintains a complex supply chain involving over 500 independent factories in 50
countries.

Vision, Mission, and Business Objectives

Vision: “To be the best sports company in the world.” Adidas strives to create
products and experiences that enhance athletic performance and inspire athletes to
achieve their personal best.

Mission: “Through sport, we have the power to change lives.” Adidas aims to make a
positive impact on the world by promoting healthy lifestyles, sustainability, and
inclusivity through its products, services, and community initiatives.

Business Objectives:

Drive growth through innovation and digital transformation.

Expand market share in key regions and product categories.
Enhance sustainability efforts and reduce environmental impact.
Foster brand loyalty and community engagement through strategic partnerships and
collaborations.

Organizational and Legal Structure

Adidas AG is structured as a public limited company (Aktiengesellschaft) under

German law, with shares listed on the Frankfurt Stock Exchange. The company is
governed by a two-tier board system comprising the Executive Board, responsible for
day-to-day management, and the Supervisory Board, which oversees and advises the
Executive Board on strategic decisions. Adidas operates through various subsidiaries,
including Reebok (until its sale in 2022), Adidas America, and Adidas China, each
focusing on specific markets and product segments.

Key Stakeholders

The key stakeholders of Adidas include:

 Shareholders: Institutional and individual investors who own shares in the

company and influence corporate governance and financial strategy.
 Employees: Over 60,000 employees worldwide, from corporate staff to factory
workers and retail personnel, who contribute to the company’s operations and
culture.
 Consumers: A diverse global customer base ranging from professional athletes to
casual sports enthusiasts and fashion-conscious individuals.
 Suppliers and Manufacturers: Over 500 independent factories across 50 countries
that produce Adidas products under strict quality and ethical standards.
 Athletes and Influencers: Sponsored athletes and brand ambassadors who help
promote Adidas products and embody its brand values.
 Non-Governmental Organizations (NGOs): Partners in sustainability and social
responsibility initiatives, such as the Better Cotton Initiative and Parley for the
Oceans.

Business Functions and Organizational Chart

Adidas’ business functions are structured around key areas such as product
development, marketing, sales, finance, and supply chain management. The
company’s organizational chart is designed to support its global operations and
strategic goals, with a clear hierarchy and division of responsibilities:

 CEO: Leads the overall strategic direction and management of the company.
 Executive Board Members: Oversee critical functions such as Global Brands,
Global Sales, Finance, and Human Resources.
 Regional Heads: Manage business operations and market strategies in specific
geographical regions like North America, Europe, and Asia-Pacific.
 Business Units: Focused on specific product categories (e.g., Football, Running,
Originals) to ensure specialized expertise and innovation.

Size and Scope of Different Types of Organizations

Adidas operates across multiple organizational types, each with its size and scope:

 Corporate Structure: As a large multinational corporation, Adidas has significant

influence and resources to invest in research, development, and marketing.
 Retail Operations: Adidas-owned stores and franchises contribute significantly to
its direct-to-consumer strategy, providing a controlled environment for brand
representation and customer experience.
 Supply Chain Network: A vast network of independent factories and logistics
providers supports Adidas' global operations, enabling efficient production and
distribution of its products.

Analysis of Adidas AG

Internal Department Interrelationships and Business Objectives

Adidas AG is structured to support its strategic goals of being a global leader in the
sportswear industry, driving innovation in product development, and fostering a
strong brand presence. The company's internal departments are closely interlinked,
each playing a vital role in achieving its business objectives. Key business objectives
include maintaining market leadership, expanding product lines, enhancing digital
capabilities, and promoting sustainability.
The Product Development and Innovation Department is central to Adidas’ mission to
produce high-performance sportswear and lifestyle products. This department works
closely with the Design and Marketing Department to ensure that new products align
with market trends and consumer preferences. For example, the design team
collaborates with product developers to translate innovative concepts into practical,
market-ready products that resonate with Adidas’ diverse customer base.

The Supply Chain and Operations Department manages the production and
distribution of Adidas products, ensuring that goods are manufactured and delivered
efficiently across global markets. This department interacts frequently with Product
Development to scale the production of new products and with the Marketing team to
align product availability with promotional campaigns and seasonal launches.

The Sales and Marketing Department plays a crucial role in positioning Adidas’
products and enhancing brand equity. It collaborates with Product Development to
craft compelling product narratives and with Operations to ensure timely delivery to
retailers and consumers. The department’s strategies are informed by insights from
the Consumer Insights and Analytics Department, which gathers and analyzes market
data to identify emerging trends and consumer behavior.

The Finance Department is integral to Adidas’ strategic planning and resource

allocation. It works with all other departments to develop budgets, assess the financial
viability of new product lines, and evaluate potential investments in technology and
innovation. Finance also ensures that Adidas remains financially agile, able to invest
in growth opportunities while managing operational costs effectively.

The Human Resources (HR) Department supports the organization by managing

talent acquisition, development, and retention. HR collaborates with all departments
to ensure that each has the necessary talent and skills to meet their objectives. It also
plays a key role in fostering a culture of innovation and inclusivity, which is essential
for Adidas to remain competitive in the dynamic sportswear industry.

The strong interrelationship between these departments enables Adidas to innovate

continuously, maintain operational efficiency, and strengthen its market position. By
working collaboratively, the departments ensure that strategic goals are met, and the
company remains responsive to changing market dynamics.

Departmental Roles and Interrelationships

Each department within Adidas AG plays a specialized role, contributing to the

company's overall success. Their interrelationships are essential for the seamless
execution of strategies and achieving business goals.

The Product Development and Innovation Department is responsible for creating new
and improved products that enhance athletic performance and appeal to lifestyle
consumers. This department collaborates closely with the Design team to ensure that
technical innovations are effectively incorporated into product designs. It also works
with the Marketing team to align product features with consumer desires, thereby
enhancing the overall brand experience.
The Supply Chain and Operations Department is tasked with managing the
production, quality control, and distribution of Adidas products. It works with Product
Development to understand the specifications of new products and with Sales to
forecast demand and plan production schedules. This collaboration ensures that
Adidas can meet market demand without overproducing, reducing waste and
improving operational efficiency.

The Sales and Marketing Department is critical for driving brand awareness and
consumer engagement. It coordinates with Product Development to understand the
unique selling points of new products and with Operations to ensure that marketing
campaigns are timed with product availability. This alignment is essential for
successful product launches and promotions, helping Adidas maintain a strong
presence in competitive markets.

The Consumer Insights and Analytics Department provides valuable data that informs
decision-making across the organization. By analyzing consumer behavior and market
trends, this department helps Product Development identify opportunities for
innovation and guides Marketing in crafting targeted campaigns. The insights
generated by this department are crucial for adapting strategies in real-time and
staying ahead of competitors.

The Finance Department plays a strategic role in resource management and

investment planning. It works with all other departments to allocate budgets and
assess the financial implications of new projects and initiatives. Finance ensures that
Adidas’ growth strategies are financially sustainable and aligned with its long-term
goals. By maintaining financial discipline and supporting innovation investments,
Finance helps the company navigate economic fluctuations and competitive
challenges.

The Human Resources Department supports organizational growth by recruiting and

retaining top talent across all departments. HR works closely with each department to
understand their specific staffing needs and provide training and development
programs that enhance employee capabilities. HR also fosters a collaborative work
environment, which is essential for cross-departmental projects and innovation.

Conclusions Based on Critical Impact Analysis

Overview of Business Structures

Adidas AG operates with a complex, yet well-organized business structure that

supports its global presence and market leadership in the sportswear industry. The
company’s structure is designed to facilitate effective communication and
collaboration across multiple departments, including Product Development, Supply
Chain, Marketing, Finance, and Human Resources. Each department plays a specific
role in achieving Adidas’ strategic goals, and their interdependence is a key factor in
the company’s ability to innovate, maintain operational efficiency, and respond to
market demands.

The business structure of Adidas is hierarchical, with clear lines of authority and
responsibility. This structure enables efficient decision-making and coordination of
activities across different functional areas and geographic regions. The company’s
decentralized approach allows for flexibility and responsiveness at the regional level,
while maintaining overall strategic alignment with corporate objectives. This balanced
structure supports Adidas’ dual focus on performance sports and lifestyle segments,
enabling the company to address diverse consumer needs and preferences effectively.

Impact on Business Objectives

The business structure and departmental interrelationships at Adidas have a

significant impact on its ability to meet business objectives. The alignment between
Product Development, Marketing, and Operations ensures that new products are not
only innovative but also market-ready and supported by effective promotional
strategies. This integrated approach is crucial for achieving the company's objective
of maintaining a strong brand presence and expanding its market share in key regions.

The collaboration between Finance and other departments supports informed

decision-making regarding resource allocation and investment in new initiatives. This
enables Adidas to pursue growth opportunities, such as expanding digital capabilities
and enhancing its sustainability efforts, without compromising financial stability. The
Human Resources department’s role in talent management further reinforces these
objectives by ensuring that all departments have access to skilled personnel, fostering
a culture of innovation and continuous improvement.

Successful Interrelationships

Successful interrelationships between departments are a cornerstone of Adidas’

operational effectiveness and strategic success. For instance, the close collaboration
between the Product Development and Marketing departments has resulted in
successful product launches, where innovative designs are effectively communicated
to consumers through targeted campaigns. This synergy enhances brand loyalty and
drives sales, particularly in competitive segments such as performance footwear and
lifestyle apparel.

The interrelationship between the Supply Chain and Operations departments with
Sales ensures that production schedules align with market demand, reducing
inventory costs and optimizing distribution efficiency. This coordination is essential
for maintaining product availability and meeting customer expectations, particularly
during high-demand periods like major sporting events or new product releases. The
effective partnership between Finance and other departments also ensures that
strategic initiatives are supported by sound financial planning, enabling sustainable
growth and long-term profitability.
Challenges and Recommendations

Despite its strengths, Adidas faces several challenges that could impact its ability to
achieve business objectives. One of the main challenges is the complexity of
managing a global supply chain, which is susceptible to disruptions from geopolitical
factors, trade policies, and environmental regulations. To address this, Adidas should
consider investing in supply chain resilience strategies, such as diversifying its
supplier base and adopting advanced supply chain technologies for better visibility
and risk management.

Another challenge is maintaining the balance between innovation and cost efficiency.
While the focus on innovation is crucial for maintaining market leadership, it can also
lead to increased costs and operational complexities. To mitigate this, Adidas could
enhance its cross-functional collaboration between R&D, Operations, and Finance to
ensure that new product developments are both technologically advanced and cost-
effective.

Lastly, the growing emphasis on sustainability and ethical business practices presents
both opportunities and challenges. Adidas has made significant strides in this area, but
further integrating sustainability into all aspects of its business operations is necessary
to meet evolving consumer expectations and regulatory requirements. Strengthening
partnerships with environmental organizations and investing in sustainable materials
and production methods can enhance Adidas’ reputation as a responsible and forward-
thinking brand.

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