Business
Question 1
Adidas is a recognised firm in the contemporary world. The company’s name dates back as early as 1920 when a Germany ambitious soccer by the name Adolph (Adi) Dassler at age 20 came up with spiked shoes for both track events as well as the field. Adolph in partnership with his brother Rudi Dassler started to produce shoes in his mother’s laundry room, with the desire to have athletes’ sports footwear around the world. Four years later Adolph founded the company Adidas in Herzogenaurach his hometown (Nielson et al., 2018). One of the main components that unify the globe is the sport. Over the years games have brought cohesive existence creating an arena for peace, love, and unity for all human races. The name Adidas was a short form of Adolph (Adi) (Nielson et al., 2018).
In 1928, in the Olympics season in Amsterdam, Netherlands, Adolph designed sports shoes that made him a world star, that for the first time he gained world reputation. In 1959 Adolph Dassler passed away, but his legacy remained as the sports life changer, he is accredited as one of the founders of the modern sporting platform. In the early 1970s Adidas was ranked top athletic shoe brand in the sports industry as well as the world, and now what was regarded as a family business back in Germany soon became a corporate with amalgamating with Salomon a French Global Concern. Part of Adidas lifetime achievements was in 2005 when it announced to buy American shoemaker Reebok brand as part of its expansion strategy, this to a more declamatory concept, competition is liberated (Nielson et al. 2018).
Question 2
Globalisation is a positive growth of a firm to join the worldwide status. In the case, Adidas started as a family business, it’s now a recognised brand in the world, and this positive growth must be associated with business strategies. Innovativeness among other factors is very significant key for company growth; this proves that globalisation is not a new concept in the ever-changing trends of the business. The company has transformed over the years and attests to humanity on the primary underlying factors such as discovery and innovativeness in the related products. Technology is a significant player in the globalisation mutation process. Over the years it has evolved by world trends especially in sports. Adidas, a sports brand for footwear around the world, started way back in early 1920 as a family business but globalisation has levelled the firm as one of the world top brands (Crane & Matten, 2016).
Adidas growth lies in two main categories; market globalisation and production field globalisation. Market globalisation is when a firm such as Adidas decides to sell its products in the countries’ whose tariffs are lower or have no barriers completely. It can be done in examples such as the member state of European Union has no obstacles for its members; this has made Adidas economically tremendous and revenue graph to shoot to a real scale. Most businesses are created strategically to answer questions dealing with culture and the marketing gap. For example, in Germany Sports has a well-established background in the country which made the market niche of the firm to expand quickly to the outside community alongside with its innovativeness with the sports trending arena.
Product globalisation is the concept of sourcing material and services from other countries for again because of the price difference in various countries. The business strategy deals with productivity levels, and this is done to Adidas Brand because the firm makes their products and sells them alongside justification documents such as logos and certificates (Crane & Matten, 2016).
Adidas has proven its worldwide status by having strategic alliances to a gain of expansion of businesses and mutually benefit mutually. The company create business links that will ensure maximum sells thus maximise revenue and distribution strategies. The establishment of alliances comes along with positive factors that will directly impact a definite number of the firm’s revenues as follows:
Unions improve in total penetration of a foreign market
Sharing market cost for mutual benefits to be achieved
Sharing risks, loss of research and developmental costs
This is a counter-attack strategy for competitors
Syndicate global resources
Knowledge sharing among partners
The factors above can be affected by the contract management standards and the act of business operation (Crane & Matten, 2016). The management contract is an arrangement usually done by two companies which want to ally business growth. It must be according to the laid down business act, that company depends on the other, they must share everything and benefit mutually, the firm is vested by contract separately and performs managerial functions. It reduces risk both in financial and administrative platforms since it creates a platform for potential support from government agencies.
Question 3
Sporting activities can be traced back to the 14th century. But only a few countries can be linked to the sporting activities back then (Kraus et al., 2015). Germany is one of the countries who has actively participated in athletes and other sports in the early years. At the initial stages, one of the Adidas’ pioneer stakeholders, Adolf Dassler invented the spiked shoes for both the track events and the field. As the German’s players were utilising the shoes in the international games, the company was automatically promoted to the international level. The active German participation in the sports both local and global standards have spearheaded the growth Adidas company as the players put on the boots even during the international matches.
The Adidas boots not only are of high quality but also eases the ability to accelerate faster and comfortably in the field. On the other hand, the shoes also exist in very different colours as well as sizes, making them more impressive while at the same time providing unique merits to the user as they unleash their potential(Kraus et al., 2015). The German government also has played a significant role in marketing Adidas to international standards. It encourages sports organisations to promote the local markets by purchasing sports attires from the local industries. Adidas gains competitive advantage through this approach as it comes out as the most dominant shoe producing company with an excellent reputation.
The Adidas shoes are not only significant when it comes to playing but also provides excellent comfort to the players to avoid cases of distractions in the field. Issues of pinched shoes and accidental slipperiness are significantly reduced. Because of the great ability to meet the players’ needs, the products have been of high demand across the globe. The market, however, starts from the host country itself. Other key components are inclusive of affordability as well as stability. The shoes are focused on bringing great experience to the sporting activity in the World.
Question 4
Several factors of the country drove the decision to choose Germany as the host country for Adidas. Firstly, Germany is considered a player in the global arena of sports. It is regarded as the third largest exporter after China and the US; therefore it carries the international image (Kraus et al., 2015). German is also a country considered as a high productivity country. Any investor will not hesitate to invest in such countries.
Germany also comprises of a skilled workforce that enhances quality production, in that, 81% of the population contains well-educated people who have passed through the university system or are qualified in the vocational sectors. Adidas was, therefore, to take advantage of the skilled labour to enhance their productivity through reduced labour cost and achieve competitive advantage. Germany is also a country well equipped with World’s class infrastructure that attracts investors (Forsgren, 2015). There is sufficient power supply across the whole country with useful communication gadgets and first class transport networks. The plan has made Adidas achieve delivery on time and reduce the lead times. The taxation system in Germany also increases its preference to most investors. The corporate levels of tax are significantly reduced. The companies are more comfortable to venture into big businesses and more investment without fear of overpaying tax. Adidas, therefore, took advantage of the reduced tax to lower their fixed costs and increase their profits.
Question 5
Uppsala Internationalization Theory
Uppsala model affirms that firms directly affect its nearby markets with induction of low market commitment. Uppsala theory is widely used in the school of international Business to explain the process of internalization in the contemporary era explicitly (Forsgren, 2015). Developed in Uppsala University and its main argument was that they believed firms to ignore internally or the inbuilt establishments needed so that companies such as Adidas are enabled in handling international activities. The model, therefore, give four central pathways with which a specific company or firm such as Adidas may use to shine in the global market (Forsgren 2015.p 92), they include;
Emphasize a sporadic export system whereby, no regular export activities can be carried out.
Use independent representatives to export, such as agents
Must have, a well established foreign sales subordinates to help in the managerial as well as the sales
Institutionalise different production for maximum production and cash flow.
Adidas has used the model effectively and succeeded because they used its neighbouring market to gain experience and establish foreign trade links all over the world. In the contemporary world, every mall in town has an Adidas outfit; this illustrates its successes over the years. The company have strategically used the above four main steps to have its international status maintained. The fact that in 2005 Adidas was ranked number one brand in sports outfit especially the footwear for athletes and field events Justifies the involvement of the Uppsala model in Adidas Company.
In Germany also there is maximum security offered to the investors. The fair judiciary is independent and professional to ensure the safeguard of rules regarding investments. Agreements through contracts are also monitored and secured as well as the strict keeping of the properties considered intellectual. On the other hand, Germany also provides great incentives to new investors. There are unique programs that are in support of the more significant business spectrum activities in all phases. Incentives are given as reimbursement for investments as well as the labour cost.
The Adidas originated in Germany because of its leading economy in entire Europe. It is considered the 4th largest economy in the World. It offers a broader market and quick access to the expanding markets in the European Union (Forsgren, 2015).
Question 6
In Germany also there is maximum security offered to the investments. The fair judiciary is independent and very professional to ensure the safeguard of the rule regarding investments. Agreements through contracts are also monitored and secured as well as the strict keeping of the properties considered intellectual. On the other hand, Germany also provides significant incentives to new investors. There are unique programs that are in support of the more significant business spectrum activities in all phases. Incentives are given as reimbursement for investments as well as the labour cost.bThe Adidas also went for Germany because of its leading economy in entire Europe. It is considered the 4th largest economy in the World.
Leading in the World’s sports Brand is a projected achievement of Adidas soon. Additionally, it is planning to come up with unique new products on the footwear and apparel for the athletes. It will reduce competition from other markets as well as meeting the consumers’ needs and wants. Its commitment to quality enhancement makes it stand out from its competitors, hence the potential of growth in the future.
More than eighty years Adidas products have formed part of every kind of sports by producing all the required accessories and the footwear. In the Modern World, it is the World best producer of sports shoes with broad varieties. After it started in 1948, it has dramatically expanded to more than 170 countries. While the total employees employed are over 17,000 (Kraus et al., 2015.p 612). Despite the achievements, Adidas is still planning to experience continuous growth. It remains with a static strategy of enhancing the brand as well as product quality to maintain its financial base and competition level. Marketers, however, are faced with an inelastic demand to the globalization. This has at time hindered the quality of the services offered even to a large company like Adidas
Question 7
The contemporary business terrain is featured with modern trends, accelerating and a very complex mix of risks and opportunities all over the world, new markets are coming up with specific financial strategies for positivity in the economic field in different economies around the globe.
On 1st January 2016, world larders met on a summit upon which they agreed on 17 sustainable goals for the world, commonly known as the 2030 Agenda (Amankwah-Amoah, 2016). On the 15th of September 2015, the world leaders adopted the agenda in their respective countries of power. This was with the aim of ending poverty, fighting gender and other forms of inequality and more significantly tackle climate change for a common goal of creating a sustainable world. The Sustainable Development Goals also outline new market opportunities for companies and individual entrepreneurial activities all over the world; this makes the UN Global compact a leading catalyst for the proposed transformation (Amankwah-Amoah, 2016).
The core factor that the UN white paper state on Multi-National corporations is on the issue of creation of opportunity in the pursuit of ending poverty and raising living standards, this has been done successfully by Adidas, in all its branches and outlets, Adidas has created jobs for over 57,000 people, this is actually 57,000 families who directly gain from Adidas company (Amankwah-Amoah, 2016). The second and the principal or primary factor is the company committed to environmental conservation and adjust responsibly to the ever-varying climate change, this means, the products of Multi-National corporations must be environmental friendly thus improving personal health and environment at large.
On the merit of the UN white paper, Adidas has a plan of improving labour force, for the need to produce Adidas sports footwear for the ready market ‘world,’ in so doing it will improve some workers in the proposed abroad companies or amalgamated companies. It will also support entirely environmental conservation strategies and policies around the world. This will ensure the environment is aspect number one for good sport to actualize, this can be demonstrated, Adidas Company has voluntarily sponsored more than ten environmental policies in a maximum of two years, and this illustrates its commitment to environmental conservation (Amankwah-Amoah, 2016).
Adidas Company has since been environmental friendly because they have partnered with other environmental agencies to have a glimpse of a clean; pathogen free world with the objective to make the world a better world than they found it because the environment ‘isn’t just another issue but it’s everything.’ This action drives an influence for the world to enhance possibility and potentials by creating sports innovations, sustainability, and trust. Adidas Company gives everyone an equal chance to succeed and to believe everything is possible.
References
Amankwah-Amoah, J., 2016. Global business and emerging economies: Towards a new perspective on the effects of e-waste. Technological Forecasting and Social Change, 105, pp.20-26.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press.
Forsgren, M., 2015. The Concept of Learning in the Uppsala Internationalization Process Model: A Critical Review. In Knowledge, Networks and Power (pp. 88-110). Palgrave Macmillan, London.
Kraus, S., Richter, C., Papagiannidis, S. and Durst, S., 2015. Innovating and exploiting entrepreneurial opportunities in smart cities: evidence from Germany. Creativity and Innovation Management, 24(4), pp.601-616.
Nielson, J.R., Wester, C.R., Slyfield, C.R., Gardner, R.E., Bazzel, B. and Nunez, R., adidas- Salomon (USA) Inc, 2018. Golf club head. U.S. Patent Application 29/577,152.
Scheyvens, R., Banks, G. and Hughes, E., 2016. The private sector and the SDGs: The need to move beyond ‘business as usual’. Sustainable Development, 24(6), pp.371-382.
Schneider, T., 2015. Development of Market Entry Strategies: An Initial Blueprint for Consulting Processes.