adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) 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 (A)
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 (A)" 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 (A) 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 (A) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, cloud computing is disrupting traditional business models, increasing commodity prices, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, geopolitical disruptions, etc
Introduction to SWOT Analysis of adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A)
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 (A) 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 (A) 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 (A) 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 (A) | 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 (A) Harvard Business Review case study are -
Learning organization
- Cis Russia 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 Cis Russia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Technology & Operations industry
– adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) 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.
Ability to recruit top talent
– Cis Russia is one of the leading recruiters in the industry. Managers in the adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Ability to lead change in Technology & Operations field
– Cis Russia is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cis Russia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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 (A) 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.
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.
Diverse revenue streams
– Cis Russia is present in almost all the verticals within the industry. This has provided firm in adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) 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.
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.
Weaknesses adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) | 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 (A) are -
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 (A) should strive to include more intangible value offerings along with its core products and services.
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 (A), 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.
Interest costs
– Compare to the competition, Cis Russia has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Cis Russia 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.
Aligning sales with marketing
– It come across in the case study adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) 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 (A) can leverage the sales team experience to cultivate customer relationships as Cis Russia is planning to shift buying processes online.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cis Russia needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) 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 Cis Russia 's lucrative customers.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A), 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.
Opportunities adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) | 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 (A) are -
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Cis Russia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cis Russia 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 Cis Russia to hire the very best people irrespective of their geographical location.
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 (A) 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.
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 (A) 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.
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.
Developing new processes and practices
– Cis Russia can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– Cis Russia can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cis Russia 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, adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cis Russia can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Cis Russia can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
Threats adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) 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 (A) are -
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.
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.
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.
Consumer confidence and its impact on Cis Russia 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.
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.
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.
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.
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.
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. Cis Russia 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cis Russia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 (A), 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 .
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.
Increasing wage structure of Cis Russia
– 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 Cis Russia.
Weighted SWOT Analysis of adidas Russia/CIS and the Russian Crisis: Retrench or Double Down (A) 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 (A) 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 (A) 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 (A) 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 (A) 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.
