Analytical Essay on Adidas As a Multinational, Decentralized Company: The Key Points of Human Resources Practices

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1.0 Introduction

A multinational company is a company that operates simultaneously in many different countries. In other words, it is an enterprise that operates in more than one country. There are four categories of multinational corporations which are:

A multinational, decentralized company with a strong presence in the home country
A global, centralized company with a cost advantage through centralized production wherever cheaper resources are available
An international company building on the technology or R&D of the parent company
A transnational company combining the three approaches of the preceding three.

1.1 Mission, Vision, and Values of Adidas.

Mission

To be the best sports company in the world

Vision

We are innovation and design leaders who seek to help athletes of all skill levels achieve peak performance with every product we bring to market.

We are consumer focused and therefore we continuously improve the quality, look, feel, and image of our products and our organizational structures to match and exceed consumer expectations and to provide them with the highest value.

We are a global organization that is socially and environmentally responsible, that embraces creativity and diversity, and is financially rewarding for our employees and shareholders. We are dedicated to consistently delivering outstanding financial results.

Values

Performance – Sport is the foundation for all we do and executional excellence is a core value of our Group.
Passion – Passion is at the heart of our company. We are continuously moving forward, innovating, and improving.
Integrity – We are honest, open, ethical, and fair. People trust us to adhere to our word.
Diversity – We know it takes people with different ideas, strengths, interests, and cultural backgrounds to make our company succeed. We encourage healthy debate and differences of opinion.

1.2 History of the Adidas Logo

Adidas was famous for its three stripes logo for a long time, but it was not the first company to use the design. Karhu Sports was the original owner of the logo. Karhu Sports was hit hard by the Second World War, however, and short of capital, the owner agreed to sell Adidas the trademark for € 1,600 and two bottles of whisky. The company unveiled the three-strip logo in 1971 in a form similar to a leaf they called the ‘trefoil.’ This version was later replaced by the current logo, which is shaped like a triangle, although some Adidas products still have the trefoil logo.

1.3 Design Elements of the Adidas Logo

Even before Adidas bought the Karhu Sports Trefoil logo, they added three bars to all their products and called themselves the ‘three strip company.’ The three strips were intended to convey the company’s diversity and international appeal by symbolizing the three major land masses in which Adidas shoes were sold – North America, Europe and Asia.

Adidas added even more meaning and symbolism to their latest logo by transforming the logo into a triangle that looks like an uphill mountain. This mountain is intended to symbolize challenges – a popular theme for athletes who sell their clothes to Adidas. Adidas has also chosen to feature the name of their company in all lower-case font on their logo. This choice represents the casual, informal nature of the Adidas brand.

Lastly, since no particular colour scheme is attached to Adidas logo, Adidas is free to alter the colour of the logo anyway they see fit in order to compliment the design of the apparel they are putting it on.

1.4 Popularity of the Adidas Logo

Apparel companies live and die due to their popularity. They not only need their design to appeal to customers, they also need it to be recognized immediately to work on the most important aspects of their marketing strategy.

For instance, Adidas pays massive amounts of money to get its shoes worn by NBA and beyond pro athletes. The aim is to see these athletes wearing these shoes and to be inspired to buy them. When a basketball player in the NBA wears Adidas shoes on the court, however, there is no publicity that they wear them except a prominent logo on the shoe. Therefore, Adidas relies on people to recognize the logo in an instant in order to make these promotions work.

Luckily, the Adidas logo is recognizable immediately. It is a simple design that has changed very little over the years and does not rely on text that is difficult to see to make it recognizable.

While there is no doubt that people buy Adidas apparel for its quality, the Adidas logo is still the company’s primary sales point. All their clothes have the iconic logo in one form or another, making the logo the main element of their design.

Best of all, Adidas has been able to attach a message to its logo. When people see Adidas clothing or see someone else wearing it, they immediately link quality and athleticism to the clothing. This association keeps many customers coming again and again to Adidas.

Although high – quality logos are important for any company, they are particularly important for companies like Adidas and Nike, which anchor their entire marketing strategy to their logo. Given the company’s international success, Adidas is a great example of how successful a logo can bring to a company when it is right.

1.5 Company Profile

Adidas is 61th ranked brand in the World’s Most Valuable Brands and having more than 92 innovative companies which positioned as the leader in the world market. Also, its world renowned for sports-related products like sports clothing, bags, shoes, watches, shirts, eyewear and other accessories. The founder of Adidas is Adolf Adi Dassler who established a shoe factory with his brother in 1924 and named it Dassler Brothers Shoe Factory. The brothers parted ways to form two different companies on their accord, Adidas and Puma.

Adolf Dassler took the company after the parting ways with his brother and focus on strategies to a fierce battle with Puma. The name of the company is a shortening of the name of its founder, Adolf-Adi Das-ler. For early years, a fierce rivalry ensued between Puma which the company established by Adolf’s brother for became successful brands in market. However, Adidas is still blooming with different innovative ideas and strategies to maintain its reputation against leading brands such as Rockport, Taylormade Golf and Reebok.

Besides, Herbert Hainer is the CEO of the Adidas-Group (AG) and their headquarters is in Herzogenaurach, Germany. The slogan and the company both go along with each other as it says, “Impossible is nothing”. This company is in harmony with sports figures and clubs that produce their products in worldwide market. It is because their grown with more innovative ideas, focused on creating brand awareness and other marketing strategies.

1.6 Achievement

The first sportswear adidas made was for Franz Beckenbauer in 1967. There are several figures have been associated with Adidas like Zinedine Zidane, Allyson Felix and Michael Ballack. One of the main focuses of Adidas is football kit and its associated equipment. Also, Adidas supplies team kits for football teams and clubs of international repute such as A.C.Milan, Bayern Munich, Real Madrid and Chelsea. This company strategies have focused on more successful players, brand extension and innovative public focused brands.

Moreover, the company also distributes referee kits used in international matches and club matches. Adidas has risen to extreme heights of success with more than 1000 stores have establish around the world. It has been successful in creating an influential marketing with good advertising and other marketing tools. Its current slogan is “Adidas is all in” which represent the image of sports fashion with attitude and unified image of sports, music, street and pop-culture. This will be creating significant existence through its good communication strategies for increase awareness in market.

Adidas has a few subsidiary companies like Reebok, Ashworth, Runtastic and TaylorMade-adidas. There are 57,000 people from 100 nations that company hired as employees around the world. Every year the company produce over 900 million sports and sports lifestyle products with independent manufacturing partners worldwide. In 2017, Adidas had generated sales of €21.218 billion. As fashion and sportswear industries, Adidas continued to revolutionize with health and fitness merging into a lifestyle concept to new successes in a digital era.

With the divestiture of its hockey brand CCM and its golf brands TaylorMade, Adams Golf and Ashworth will be contributed to its strategy “Creating the New”. Its focused on its core competencies in footwear, apparel and its major brands Adidas and Reebok. The growing number of sales and company that dominant in the industry can help Adidas to survive in the modern market for competition in the sport shoes industry. It will made Adidas became the top brand of choice for most target markets because of their quality satisfying customer’s needs and wants.

1.7 Organizational Chart

Figure 1: Adidas Executive Board

2.0 The Key Points of Human Resources Practices

2.1 Strengths of Adidas

1. Talent Management

Ability administration refers to hold the representative in the ADIDAS. Thus, ADIDAS utilize this system to build up the old workers that have the chances to their vocation. By utilizing this methodology ADIDAS ready to hold the quality representatives remain in the association and developed the dedication of the workers. Other than that, ability administration additionally incorporate recruitment. Recruitment refers to the procedure of enlist and choosing the qualified new individuals that all together fit to the activity.

2. Employee-oriented leadership

Employee-oriented leadership refers to the communication between the administrator and the subordinates. By utilizing this system ADIDAS ready to realize the representatives need and need. This is on the grounds that this technique comprises of worker criticism framework. Employee feedback system refers to the satisfaction dimension of the workers to the activity. The workers are the inward clients of the association, when the representatives satisfy their activity the efficiency of the association will consequently increment. This is on the grounds that the association given a decent domain to the workers with the end goal to satisfy the representatives and the representatives will do the difficult activity to the association to as the repay to the association.

3. Remuneration

Remuneration implies the pay of the representatives get step by step. The compensation identified with market prerequisite and execution level. That implies ADIDAS set the pay agreeing with market necessity and execution level. The ADIDAS on time pay the compensations with the end goal to give the great notoriety of the association. At the point when the association don’t postpone paid the pay rates to the representatives the representatives will faithful to the association this is on the grounds that the workers will feel the security in the association to work.

4. Bonus

In ADIDAS the compensation comprises of reward. In ADIDAS the individual execution will identified with the compensation. Extra means the organization pay additional cash to the workers to spur the representatives. The principle reason for given reward is to rouse the representatives. Inspiration is mental process giving conduct reason and bearing. By given the reward the workers will put more exertion and hardship to the activity.

5. Long-term incentive programmes (LTIP)

This is practicing for senior administrator, this is three year plans dependent on the accomplishment of monetary and in addition consistence target. So the senior director that accomplishes the long haul focus of the organization will get the reward. The extra was relied upon the association whether the reward is cash or others advantage.

6. Performance management

ADIDAS continually searching for the potential workers in this way, ADIDAS will watch the execution of every representative and give the chances to get advance. Other than that, ADIDAS likewise watch the general population that imaginative and innovative. This is on the grounds that ADIDAS require the people groups that contain the high creative ability individuals to give the plan to deliver the structure of the item. So ADIDAS will see about it and pick the general population that have the potential expertise change to the creation and development group. ADIDAS discovered that the general population who are having diverse foundations, points of view and aptitudes can influence the best group with the end goal to accomplish the most extreme making of the structure on the item. Before ADIDAS framing the potential representatives into a group, ADIDAS will send the workers to preparing. This is on the grounds that the group require contains the distinctive creative energy, discernment and culture. This is on the grounds that ADIDAS is a worldwide association inside the diverse observation can developed a multi-ability group. With this the ADIDAS can oversee huge numbers of the nation culture and propensity with the end goal to item appropriate item to general society.

7. Work-life balance

Work-life balance is adaptable working hour. Adaptable time is a booking arrangement in which full-time representatives may pick beginning and consummation times inside rule indicated by the association. Each employee personal satisfaction ought to be enhanced by attempting to the association. So ADIDAS have the duty to address adaptable working hour. The primary reason for work-life balance is give orchestrate of the private and family needs to the representatives. So the association was consider the advantage of the workers. Moreover, this technique ready to give the representatives a happy with working hour and with the fit family the workers will put more exertion in the working hour. For instance the working hour is 8 hours out of every day. The representatives can choose their working hour in the day and the single amount of the working hour 8 hours. On the off chance that the worker begins working at 11:00AM so the representative leave the association in 19:00 PM.

2.2 Weaknesses of Adidas

1. Work culture

As made reference to before despite the fact that Adidas is fruitful at incorporating little organizations it has a lot of inability to consolidate firms that have diverse work culture.

2. Developing players in the business

Interest in Research and Development is underneath the quickest developing players in the business. Despite the fact that Adidas is spending over the business normal on Research and Development, it has not possessed the capacity to contend with the main players in the business regarding advancement. It has appeared to be a develop firm anticipating bring out items dependent on tried highlights in the market.

3. Financial planning

Budgetary arranging isn’t done legitimately and productively. The present resource proportion and fluid resource proportions propose that the organization can utilize the money more productively than what it is doing at present.

4. Organization structure

Association structure is just good with present plan of action subsequently constraining extension in contiguous item portions.

5. New entrants

The organization has not having the capacity to handle the difficulties present by the new contestants in the section and has lost little piece of the overall industry in the specialty classifications. Adidas needs to construct interior input component straightforwardly from deals group on ground to counter these difficulties.

6. High attrition rate in work force

Contrast with different associations in the business Adidas has a higher steady loss rate and need to spend significantly more contrast with its rivals on preparing and improvement of its representatives.

7. Demand forecasting

Not great at item request determining prompting higher rate of botched chances contrast with its rivals. One of the motivation behind why the day’s stock is high contrast with its rivals is that Adidas isn’t great at interest estimating in this way wind up keeping higher stock both in-house and in channel.

2.3 Adidas crisis

Child labor scandal hits Adidas

They are definitive grown-up toys for games stars and road cognizant youngsters. With their trademark three stripes, Adidas garments cost a little fortune to purchase and are advanced by world-celebrated names, for example, England captain David Beckham, Olympic heptathlete Denise Lewis, and Russian tennis player Anna Kournikova.

Be that as it may, the organization will this week wind up entangled in contention when the European Parliament knows about the brutal treatment of representatives in Indonesian sweatshop production lines providing the German combination.

The Parliament will be informed that garments for Adidas were made in two industrial facilities utilizing kid work, constrained additional time and inappropriate behavior. Agents of specialists in two Indonesian industrial facilities providing the German company,will reveal to Euro MPs that in the Nikomax Gemilang and Tuntex processing plants, in the Indonesian capital of Jakarta, kids as youthful as 15 were:

Made to work 15-hour days;
Anticipated that would do something like 70 hours per week and rebuffed for declining to do additional time;
Paid under $60 per month, rates beneath the International Labor Organization’s interest professionally wage;
Punished for disappearing amid therapeutic challenges and had illicit conclusions taken from wages as disciplines for minor misdeeds.

3.0 Recommendation

Adidas needs to make an item separation and improvement methodologies for both unused and existing markets through innovative advancement which is fundamental to accomplishing economical authority in sports industry. As Adidas has the big name it is their responsibility to maintain a clean image. Adidas was looking the proficient as the individuals of the families. Adidas should treat and practice to treat their workers as their families individuals, care around the private division of the workers. So with that condition Adidas was able to perform well within the advertise. Adidas should been doing these since Adidas found out that most of their workers want the cheerful the efficiency of the association will increment quickly. From what have been comment to Adidas, they should recruit individuals that from other competitors.

Next, Adidas team should recruit the qualified people to work with them. Enlist the quality individuals from the competitors can diminish the efficiency of possess. Selecting the quality people was never easy because of some people tend to not their job properly and that make some brands have the bad image because of some of their workers. Adidas an also select the quality people groups from competitors is the great ways to discover the potential representative in the event that the association was need of the potential representative. Adidas also can ensure that all their workers that enough time to rest and have a work balance between works and their own living. This is to make sure that all of them when work are exposed to the positive environment. When workers are in the right mood they will works happily and give the best services to the customers. A good workers always give a pleasant to the customers. It is their duty to make customers feel satisfy and happy before their leave Adidas store.

Besides, the association moreover have to be anticipate the self-workers go to the other organisation. For this, Adidas was did well this can be since Adidas comprise of adaptable of working hours, ability administration and executive administration. These technique might construct up the dependability of the workers in arrange to participate the worker to take off the association and work with the competitors. We can be sure that majority of the customer are quite satisfy with Adidas product and services. Since customer have no question within the strength of fabric that utilized in delivered Adidas item be that as it may in term of cost and design, Adidas might have to be put in more exertion and come and out with the most up to date plan that can pull in more clients. Adidas can moreover dispatch an advancement or give an extraordinary offer of cost in a certain period of times to extend the deals volume and pull in more clients.

4.0 Conclusion

In a nutshell, Adidas is one of the organizations that create the best shoes on the markets. They have created and provide the excellent shoe with varieties of choice when it comes to findings the right shoes that fit for their customers. Each shoes that produced by Adidas has their different description that the customers will find appealing along with different prices. Each customer is very satisfied with Adidas product and services that been provided. Adidas was also one of the organization that prioritize both of their employees and customers. They always give their full attention to their employees in term of giving the benefits in many factors which this could make they receive the loyalty from their employees and make their employees become more motivated than before. Once their employees become more motivated than before, this could lead to the productivity of the organization and increase their profits.

In term of customer services, it could be confirmed that all the customers are quite satisfied with Adidas services that been provided to them. They could improve more and better services in order to satisfied their customers which they could see their customer happy face each time they enter and leave the shop. They might also maximize their profits. So far, all Adidas’s customers have no doubt in the durability of materials that been used in producing Adidas products but they were some dissatisfaction in term of the price and design, which Adidas might ought to put in more exertion and come out with a most up to date plan that can draw in more customers in different range of income. This also could attract more customer which are able to purchase various product offered by Adidas. Adidas also could dispatch an advancement or allow an extraordinary offer of price in a certain period of times to increase the sales volume and pull in more customers.

Other than that, Adidas could also need to differentiate their product from its competitive which they could come out with some new and creative idea in term of their advertisement to promote their products. They could make their products become a memorable brand name in customer mind-set with inviting famous athletes or artists as their brand spokesperson. It can be conclude that Adidas is one of the best organisation which that consists of many benefit both to the employees and customers.

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