Adidas Turnaround Plan Brings Production Back to Europe
German sportswear company, Adidas, is working on a new strategy to bounce back from previous unmet goals in European markets
In a bid to gain market share are rebound from a previous business plan that did not achieve its goals, popular German sportswear firm Adidas has outlined a new strategy that includes manufacturing some of its apparel in Europe rather than Asia.
The company's Chief Executive, Herbert Hainer, said that he intends to bring production back to “where the main markets are", hoping that the changes will help it make new products available with a much quicker route to market.
In a blog on the company's website, Mr Hainer wrote: “We had to accept in late 2014 that we'd not met all our financial ambitions which we'd set ourselves in the light of the strategic business plan Route 2015 five years ago.”
Adidas says the initiative will help increase net income by 15 percent a year from now through to 2020 and will keep rivals such as Nike from eating into its market share. The company said it was testing automated production units that would speed up manufacturing and allow customers to personalise their purchases.
One marketing expert called the shift to strategic cities a sensible move. “Those areas are important because they are opinion leaders,” said Vince Mitchell, Professor of Marketing at Cass Business School. Mr Mitchell added that “swift production speed” was the secret to the success of such High Street retailers as Zara.
As part of Adidas’ strategic business plan, called ‘Creating the New’, the company will invest in talent and marketing in Los Angeles, New York, London, Paris, Shanghai and Tokyo.
The company's executive board member in charge of global sales, Roland Auschel, said: “Global brands are created in global cities. If we win running in New York and Los Angeles, we will win running in the US.”