Case Study Description of "mi adidas" Mass Customization Initiative
Many companies are exploring mass customization as a way to demonstrate market leadership and capture price premiums. Examines Adidas' recent "mi adidas" initiative, aimed at delivering customized athletic footwear to retail customers. Discusses the practical implications associated with expanding the initiative from a small pilot to a wider operation with retail presence. Enables the reader to evaluate an interlinked set of issues, from marketing, retailer selection, and information management through production and distribution, project management, and strategic fit. Offers three alternative routes for moving forward as of October 2001 and challenges participants to decide the future direction of "mi adidas."
Swot Analysis of ""mi adidas" Mass Customization Initiative" written by Ralf W. Seifert includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Adidas Mi facing as an external strategic factors. Some of the topics covered in "mi adidas" Mass Customization Initiative case study are - Strategic Management Strategies, Manufacturing, Marketing, Project management, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the "mi adidas" Mass Customization Initiative casestudy better are - – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing energy prices, increasing commodity prices, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, technology disruption, etc
Introduction to SWOT Analysis of "mi adidas" Mass Customization Initiative
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in "mi adidas" Mass Customization Initiative case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Adidas Mi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Adidas Mi operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of "mi adidas" Mass Customization Initiative can be done for the following purposes –
1. Strategic planning using facts provided in "mi adidas" Mass Customization Initiative case study
2. Improving business portfolio management of Adidas Mi
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Adidas Mi
Strengths "mi adidas" Mass Customization Initiative | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Adidas Mi in "mi adidas" Mass Customization Initiative Harvard Business Review case study are -
Organizational Resilience of Adidas Mi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Adidas Mi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Adidas Mi has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study "mi adidas" Mass Customization Initiative - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Adidas Mi has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in "mi adidas" Mass Customization Initiative HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Adidas Mi is present in almost all the verticals within the industry. This has provided firm in "mi adidas" Mass Customization Initiative case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Adidas Mi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Adidas Mi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Adidas Mi in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Adidas Mi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in "mi adidas" Mass Customization Initiative Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Adidas Mi is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Adidas Mi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in "mi adidas" Mass Customization Initiative Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Adidas Mi is one of the most innovative firm in sector. Manager in "mi adidas" Mass Customization Initiative Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Adidas Mi digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Adidas Mi has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Adidas Mi in the sector have low bargaining power. "mi adidas" Mass Customization Initiative has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Adidas Mi to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Adidas Mi is one of the leading recruiters in the industry. Managers in the "mi adidas" Mass Customization Initiative are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses "mi adidas" Mass Customization Initiative | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of "mi adidas" Mass Customization Initiative are -
Aligning sales with marketing
– It come across in the case study "mi adidas" Mass Customization Initiative that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case "mi adidas" Mass Customization Initiative can leverage the sales team experience to cultivate customer relationships as Adidas Mi is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study "mi adidas" Mass Customization Initiative, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As "mi adidas" Mass Customization Initiative HBR case study mentions - Adidas Mi takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Adidas Mi, firm in the HBR case study "mi adidas" Mass Customization Initiative needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Adidas Mi is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Adidas Mi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Adidas Mi to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Adidas Mi products
– To increase the profitability and margins on the products, Adidas Mi needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study "mi adidas" Mass Customization Initiative has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Adidas Mi 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Adidas Mi has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High bargaining power of channel partners
– Because of the regulatory requirements, Ralf W. Seifert suggests that, Adidas Mi is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Adidas Mi supply chain. Even after few cautionary changes mentioned in the HBR case study - "mi adidas" Mass Customization Initiative, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Adidas Mi vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study "mi adidas" Mass Customization Initiative, it seems that the employees of Adidas Mi don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities "mi adidas" Mass Customization Initiative | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study "mi adidas" Mass Customization Initiative are -
Learning at scale
– Online learning technologies has now opened space for Adidas Mi to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Adidas Mi in the consumer business. Now Adidas Mi can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Adidas Mi has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Adidas Mi can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, "mi adidas" Mass Customization Initiative, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Adidas Mi to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Adidas Mi to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Adidas Mi has opened avenues for new revenue streams for the organization in the industry. This can help Adidas Mi to build a more holistic ecosystem as suggested in the "mi adidas" Mass Customization Initiative case study. Adidas Mi can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Adidas Mi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Adidas Mi can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Adidas Mi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Adidas Mi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Adidas Mi has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study "mi adidas" Mass Customization Initiative - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Adidas Mi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Adidas Mi to increase its market reach. Adidas Mi will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Adidas Mi can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats "mi adidas" Mass Customization Initiative External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study "mi adidas" Mass Customization Initiative are -
Consumer confidence and its impact on Adidas Mi demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Adidas Mi high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Adidas Mi in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Adidas Mi business can come under increasing regulations regarding data privacy, data security, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Adidas Mi will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Adidas Mi needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Adidas Mi can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study "mi adidas" Mass Customization Initiative, Adidas Mi may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing wage structure of Adidas Mi
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Adidas Mi.
Shortening product life cycle
– it is one of the major threat that Adidas Mi is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Adidas Mi with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Adidas Mi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Adidas Mi can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Weighted SWOT Analysis of "mi adidas" Mass Customization Initiative Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study "mi adidas" Mass Customization Initiative needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study "mi adidas" Mass Customization Initiative is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study "mi adidas" Mass Customization Initiative is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of "mi adidas" Mass Customization Initiative is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Adidas Mi needs to make to build a sustainable competitive advantage.