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 - – competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
increasing household debt because of falling income levels, wage bills are increasing, 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 -
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.
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.
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.
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.
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.
Effective Research and Development (R&D)
– Adidas Labor 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection - 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 Adidas Labor 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 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.
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.
Sustainable margins compare to other players in Global Business industry
– Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection firm has clearly differentiated products in the market place. This has enabled Adidas Labor to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Adidas Labor to invest into research and development (R&D) and innovation.
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 -
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection, it seems that the employees of Adidas Labor 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.
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.
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.
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.
Lack of clear differentiation of Adidas Labor products
– To increase the profitability and margins on the products, Adidas Labor needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Adidas Labor 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.
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.
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.
Slow to strategic competitive environment developments
– As Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection HBR case study mentions - Adidas Labor 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.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Adidas Labor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Adidas Labor 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 Global Business segment.
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.
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.
Manufacturing automation
– Adidas Labor can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Adidas Labor to increase its market reach. Adidas Labor 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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Adidas Labor 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.
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 -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Adidas Labor in the Global Business industry. The Global Business 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.
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.
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.
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.
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Adidas Labor is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Adidas Labor 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 Compliance, Collaboration, and Codes of Labor Practice: The adidas Connection .
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 Labor business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Adidas Labor 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 Labor can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.