Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection
Comprising networked organizations that span advanced and developing countries, the athletic footwear sector is at the cutting edge of globalization. An important dimension of corporate responsibility is setting and maintaining labor standards for contractors' employees in countries where workers have little or no legal protection against exploitation. This article examines how adidas, the industry's No. 2 firm, has utilized a code of labor practice to regulate the labor standards of its main manufacturing suppliers. A comparative analysis of a matched sample of two contractors in China shows that although the code requirements were met in both cases, relationships with adidas not only differed but also made a difference. Compared with compliance-type relationships, collaborative global firm-contractor ties encourage higher workplace performance and better employment relations in contractor factories.
Swot Analysis of "Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection" written by Stephen J. Frenkel, Duncan Scott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Adidas Labor facing as an external strategic factors. Some of the topics covered in Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection case study are - Strategic Management Strategies, Globalization, Labor, Social responsibility and Global Business.
Some of the macro environment factors that can be used to understand the Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection casestudy better are - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, cloud computing is disrupting traditional business models,
increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Adidas Labor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Adidas Labor 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection can be done for the following purposes –
1. Strategic planning using facts provided in Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection case study
2. Improving business portfolio management of Adidas Labor
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Adidas Labor
Strengths Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Adidas Labor in Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection Harvard Business Review case study are -
Highly skilled collaborators
– Adidas Labor 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Adidas Labor 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 Stephen J. Frenkel, Duncan Scott 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.
Low bargaining power of suppliers
– Suppliers of Adidas Labor in the sector have low bargaining power. Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Adidas Labor to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Adidas Labor
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Adidas Labor does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Adidas Labor is one of the leading recruiters in the industry. Managers in the Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Adidas Labor in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Global Business field
– Adidas Labor 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 Adidas Labor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Adidas Labor is one of the most innovative firm in sector. Manager in Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Adidas Labor has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Adidas Labor to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Adidas Labor 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.
Training and development
– Adidas Labor has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Adidas Labor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Adidas Labor 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.
Weaknesses Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection are -
Low market penetration in new markets
– Outside its home market of Adidas Labor, firm in the HBR case study Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection, in the dynamic environment Adidas Labor has struggled to respond to the nimble upstart competition. Adidas Labor has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Adidas Labor 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.
Increasing silos among functional specialists
– The organizational structure of Adidas Labor is dominated by functional specialists. It is not different from other players in the Global Business segment. Adidas Labor needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Adidas Labor to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection, it seems that company is thinking about the frontier risks that can impact Global Business 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection 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 Labor 's lucrative customers.
Products dominated business model
– Even though Adidas Labor 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 - Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection 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 Adidas Labor 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Stephen J. Frenkel, Duncan Scott suggests that, Adidas Labor 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.
Need for greater diversity
– Adidas Labor 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.
Capital Spending Reduction
– Even during the low interest decade, Adidas Labor 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.
Opportunities Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection | 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection are -
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 Labor 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 Adidas Labor 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Adidas Labor 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, Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Adidas Labor in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Adidas Labor 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.
Leveraging digital technologies
– Adidas Labor 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.
Creating value in data economy
– The success of analytics program of Adidas Labor has opened avenues for new revenue streams for the organization in the industry. This can help Adidas Labor to build a more holistic ecosystem as suggested in the Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection case study. Adidas Labor can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Adidas Labor can use these opportunities to build new business models that can help the communities that Adidas Labor operates in. Secondly it can use opportunities from government spending in Global Business sector.
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 Labor in the consumer business. Now Adidas Labor can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Adidas Labor can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Adidas Labor 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 Labor to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Adidas Labor 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Adidas Labor to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Adidas Labor is facing challenges because of the dominance of functional experts in the organization. Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection 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.
Threats Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection are -
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.
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 Labor 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Adidas Labor with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Adidas Labor 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 Labor 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Adidas Labor can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Adidas Labor has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Adidas Labor needs to keep up with the evolution of technology in the Global Business 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.
Increasing wage structure of Adidas Labor
– 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 Labor.
Stagnating economy with rate increase
– Adidas Labor 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.
Regulatory challenges
– Adidas Labor 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 Global Business industry regulations.
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. Adidas Labor needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Adidas Labor.
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 Adidas Labor in the Global Business sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection 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 Labor needs to make to build a sustainable competitive advantage.