adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B)
Supplement to case IMD820. The case series is based on extensive interviews with key executives at adidas Russia/CIS in charge of implementing the radical IT, supply chain and omnichannel initiatives that transformed adidas Russia/CIS from one of the poorest performers to the new standard within the Group. The initiatives included pioneering the rollout and implementation of key new technologies such as click-and-collect, ship-from-store, endless aisle and RFID - all of this in the face of the massive economic crisis that embroiled Russia. With some 1,200 company-owned stores - the Group's largest direct retail footprint globally - adidas Russia/CIS was critical to the financial success of the Group as a whole. The case provides an opportunity to discuss the key challenges in the rollout and implementation of cutting-edge IT, supply chain and omnichannel initiatives in one of the most challenging retail and logistics environments, i.e. Russia during the latest economic crisis.
Authors :: Carlos Cordon, Benoit Leleux, Beverley Lennox
Swot Analysis of "adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B)" written by Carlos Cordon, Benoit Leleux, Beverley Lennox includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cis Russia facing as an external strategic factors. Some of the topics covered in adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) case study are - Strategic Management Strategies, Emerging markets, Innovation, IT, Leadership, Manufacturing, Organizational culture and Technology & Operations.
Some of the macro environment factors that can be used to understand the adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
there is increasing trade war between United States & China, there is backlash against globalization, etc
Introduction to SWOT Analysis of adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cis Russia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cis Russia 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 adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) can be done for the following purposes –
1. Strategic planning using facts provided in adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) case study
2. Improving business portfolio management of Cis Russia
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cis Russia
Strengths adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cis Russia in adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Cis Russia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cis Russia 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.
Training and development
– Cis Russia has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) 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.
Analytics focus
– Cis Russia is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Carlos Cordon, Benoit Leleux, Beverley Lennox can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Technology & Operations industry
– adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) firm has clearly differentiated products in the market place. This has enabled Cis Russia to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Cis Russia to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Cis Russia are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Cis Russia 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 adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Cis Russia has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Organizational Resilience of Cis Russia
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cis Russia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Cis Russia in the sector have low bargaining power. adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cis Russia to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Cis Russia is one of the most innovative firm in sector. Manager in adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Cis Russia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) are -
Slow decision making process
– As mentioned earlier in the report, Cis Russia has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Cis Russia even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– It come across in the case study adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) 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 adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) can leverage the sales team experience to cultivate customer relationships as Cis Russia is planning to shift buying processes online.
Lack of clear differentiation of Cis Russia products
– To increase the profitability and margins on the products, Cis Russia needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B), is just above the industry average. Cis Russia needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Carlos Cordon, Benoit Leleux, Beverley Lennox suggests that, Cis Russia 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B), it seems that the employees of Cis Russia 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.
High cash cycle compare to competitors
Cis Russia has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Cis Russia has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Cis Russia has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Cis Russia has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Increasing silos among functional specialists
– The organizational structure of Cis Russia is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Cis Russia needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cis Russia to focus more on services rather than just following the product oriented approach.
Opportunities adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) | 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 adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cis Russia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cis Russia in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cis Russia is facing challenges because of the dominance of functional experts in the organization. adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Cis Russia 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cis Russia can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Loyalty marketing
– Cis Russia 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.
Building a culture of innovation
– managers at Cis Russia can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Learning at scale
– Online learning technologies has now opened space for Cis Russia 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.
Using analytics as competitive advantage
– Cis Russia 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 adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cis Russia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Cis Russia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cis Russia to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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 Cis Russia in the consumer business. Now Cis Russia can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Cis Russia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) are -
Shortening product life cycle
– it is one of the major threat that Cis Russia is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Cis Russia in the Technology & Operations sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cis Russia.
Regulatory challenges
– Cis Russia needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Environmental challenges
– Cis Russia 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. Cis Russia can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Cis Russia needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Cis Russia 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B), Cis Russia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cis Russia can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) .
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 Cis Russia business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cis Russia in the Technology & Operations industry. The Technology & Operations 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.
Technology acceleration in Forth Industrial Revolution
– Cis Russia has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Cis Russia needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Cis Russia 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.
Weighted SWOT Analysis of adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) 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 adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) 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 adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) 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 adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) 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 adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (B) 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 Cis Russia needs to make to build a sustainable competitive advantage.
