Our goal as a Group is to lead the sporting goods industry with brands built upon a passion for sports and a sporting lifestyle. Inspired by our heritage, we know that a profound understanding of the consumer and customer is essential to achieving this goal. To anticipate and respond to their needs, we continuously strive to create a culture of innovation, challenging ourselves to break with convention and embrace change. By harnessing this culture, we push the boundaries of products, services and processes to strengthen our competitiveness and maximise the Group’s operational and financial performance. This, in turn, will drive long-term value creation for our shareholders.
Reorganisation of Group provides solid platform for growth
In 2009, the adidas Group took the strategic decision to move from a vertically integrated brand structure into a functional multi-brand structure for the adidas and Reebok brands. This led to the creation of a Global Sales function responsible for the commercial activities and a Global Brands function responsible for the marketing activities of both brands. In addition, the Global Sales organisation was split into Wholesale and Retail, to cater more appropriately to the different needs of these two distinctive business models. This new structure follows two important principles: to foster further alignment and strengthen brand management to drive long-term sustainable growth, while at the same time ensuring coordinated and best practice execution in the marketplace.
To transition to the new structure, the Group initiated several measures in 2009 including:
- Establishment of joint operating models for the adidas and Reebok brands in most markets around the globe.
- Elimination of regional headquarters, moving to more direct interaction between local markets and global functions.
- Separation of the responsibility between Global Brands and Global Sales management on the Board level. Herbert Hainer, adidas Group CEO, additionally assumed direct responsibility for Global Sales. At the same time, Erich Stamminger, Member of the Executive Board of the adidas Group, took responsibility for Global Brands.
The new structure will allow us to better leverage the strengths of our management team and deliver best-in-class service to our consumers and customers. Due to the different business models of TaylorMade-adidas Golf, Rockport and Reebok-CCM Hockey, these operating segments are not part of the new matrix structure.
Diverse brand portfolio
Consumers want choice. Whether it is the athlete looking for the best possible equipment, or the casual consumer searching for the next fashion trend, we are inspired to develop and create experiences that engage consumers in long-lasting relationships with our brands. To maximise our consumer reach, we have embraced a multi-brand strategy. This approach allows us to tackle opportunities from several perspectives, as both a mass and a niche player, providing distinct and relevant products to a wide spectrum of consumers. In this way, each brand is able to keep a unique identity and focus on its core competencies, while simultaneously providing our Group with a broad product offering, increasing our leverage in the marketplace.
Investments focused on highest potential markets and channels
As a Group, we target leading market positions in all markets where we compete. However, with almost 180 subsidiaries worldwide, we have prioritised our investments based on those markets which offer the best medium- to long-term growth and profitability opportunities. In this respect, we continue to place a considerable emphasis on expanding our activities in the Emerging markets, particularly China and Russia.
No matter in which market we operate, we recognise that consumer buying behaviour and the retail landscape are unique. Therefore, to fully exploit market opportunities, we tailor our distribution strategy to present our brands to the consumer in the most impactful way. This is achieved by following a distinctive channel approach. We strive to provide our customers with superior service to secure prime shelf space for our brands, while continuing our commitment to building a strategic competency in own retail and e-commerce.
Creating a flexible supply chain
Speed and agility are key to outpacing the competition. We are committed to meeting the full range of customer and consumer needs by ensuring product availability in the correct size and colour, providing game-changing technical innovations and also the latest high-end fashion product to the highest quality standards. We strive to shorten creation and production lead times by continuously improving our infrastructure, processes and systems. By sharing information from point of sale to source and vice versa, we strive to connect and more closely integrate the various elements of our supply chain, to enable quick reaction to changing consumer trends. To this end, we focus on building maximum flexibility. While leveraging the efficiency of common infrastructure and processes, the Group strives to provide tailored solutions for all our business models, be it the wholesale or retail channels, or the performance-oriented or style-oriented businesses.
Leading through innovation
Everyone in the adidas Group is responsible for driving innovation. Therefore, we foster a culture of challenging convention and embracing change, and require all areas of the Group to generate at least one new meaningful innovative improvement per year. In particular, we believe that technological evolution and cutting-edge design in our products are essential to achieving sustainable leadership in our industry. Beyond this, enhancing services for our customers and implementing more efficient and effective internal processes are other areas where our organisation strives to innovate.
Develop a team grounded in our heritage
Our culture is continuously shaped by influences from the past, present and future. We perpetuate our founder’s commitment to the athlete/consumer, pride in what we do, quality and love of sport. We win as a team through open communication, collaboration and our shared values found in sport. Further, we are particularly focused on ensuring best-practice social and environmental standards. We encourage socially and environmentally responsible behaviour, because we know it will generate superior long-term value for our Group.
Creating Shareholder value
Sustainable revenue and Operating profit growth are critical to our success. Creating value for our shareholders through significant cash flow generation drives our overall decision-making process. For each of our segments, we pursue the avenues for growth which we expect to be most value-enhancing, with particular emphasis on improving profitability. In addition, rigorously managing Working capital and optimising our capital structure remain key priorities for us. As always, we are committed to increasing returns to shareholders with above-industry-average share price performance and dividends.