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Dated: 20-5-14

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TABLE OF CONTENTS Executive summary

Introduction

Company Mission

Adidas Group Values

Adidas General Approach

Sustainability Strategy

Company History

Company Logo

Adidas Brands

Organizational Structure of Adidas

Organizational Chart of Adidas

Organizational Culture of Adidas

Working at Adidas

Adidas Workplace Standards

Executive Board Members

Supervisory Board Members

Supply Chain Approach

Supply Chain structure

Supply Chain training

Adidas Green Company

CERTIFICATION TO ISO 14001

Privacy Policies

Awards and Recognitions

Adidas Six Force Analysis

Adidas Global Sales

SWOT and TOWS Analysis

Conclusion

References

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EXECUTIVE SUMMARY

The adidas Group is one of the global leaders within the sporting goods industry, offering a broad range of products around the core brands: adidas, Reebok, TaylorMade, Rockport and Reebok-CCM Hockey. Headquartered in Herzogenaurach, Germany, the Group has more than 46,000 employees and generated sales of € 13.3 billion in 2011.

INTRODUCTION Established in post-war Germany in 1949 (in its current form) by Adolf Dassler, the adidas Group has been synonymous with sports and sportswear for the last 60 years. The company has been part of many significant sporting moments, including but not restricted to the 1954 and 1974 German victories in the football World Cup, the recently in news Boston and Vancouver Marathons, and all World Cup and Euro Cup footballs since 1970. The phenomenal growth of the company has been primarily off the back of clever sponsorships of key athletes and teams, and also through the design of innovative new technologies. For example, adidas was the first footwear brand to develop football boots with removable studs in the 1954 World Cup, and more recently in 2005, the design of the first shoe with an in-built microprocessor that can adjust itself as per the runner’s needs. Alongside this, their revenues have been growing roughly at 11% year-on-year with the latest financial reports of 2012 showing Revenues of €14.9 billion and Net Income of €526 million. Adidas Group counts amongst its brands the flagship “adidas marque”, “adidas Originals” and “TaylorMade-Adidas” (golf range), amongst many others. In 2005, adidas acquired Reebok for $3.8 billion, thus bringing it closer to its largest rival Nike in terms of Sales, and making it the number two athletic shoemaker in the world. Apart from Nike, other competitors for adidas include Puma, Deckers, Crocs and Callaway Golf (competing with adidas’ golf range – TaylorMade). The operating environment of adidas is the sportswear and fashion industry, which has seen outstanding growth since the economic recession. Worth less than $200 billion in 2008, it is projected to grow to $300 billion in 2017. This growth provides tremendous opportunities for sportswear firms, both large and small, to expand and establish their business in this arena. Most of the growth in this segment is provided for by the United States, Brazil, China and Russia, who together account for 60% of the total growth. However, challenges for the industry still remain in the form of market saturation in developing countries and the subdued economic environment.1

In the following report, they analyze the corporate structure of adidas AG, and

look at the firm’s Capital Structure, Dividend Policy and the Firm Valuation. They

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use their analysis to determine the stock value of the firm and they compare that

to the actual price at which the stock is trading.

Mission

The adidas Group strives to be the global leader in the sporting goods industry

with brands built on a passion for sports and a sporting lifestyle. They are

committed to continuously strengthening their brands and products to improve

their competitive position.

Authentic: adidas is the first genuine sports brand. They were founded by a true athlete whose one guiding principle was to make equipment that makes

athletes better. This is what made Adi Dassler Authentic then, this is what

makes Adidas authentic today, and this is what will always make them

authentic.

Passionate: Passion is at the heart of sport and of every true athlete. Passion

knows know borders, no age, no race and not time. Passion is what drives

athletes to succeed and is what drove Adi Dassler to make his first pair of

athletic shoes in 1920. It is this same passion that will always guide adidas.

Innovative: There is continuous innovation in every area of their business –

from product technologies that help athletes perform better to communications

that help athletes understand their brand and their products. New ideas and

solutions can be found in every office and department around the world.

Inspirational: Being inspirational helps build and maintain relationships with

the athletes adidas support. It is their emotional connection to their heritage,

their athletes and to sport that inspires them to create products and

communications that, in turn, inspire others.

Committed: Adidas commitment to their athletes and sport is

uncompromising, unwavering and forever. They will continue to sponsor,

advice, listen to and support athletes with the same resolve as Adi Dassler.

Honest: At all times and in all relationships, adidas is genuine, ethical and

fair.

Consumer focused: and therefore Adidas continuously improve the quality,

look, feel, and image of their products and their organizational structures to match and exceed consumer expectations and to provide them with the

highest value.

Global organization: that is socially and environmentally responsible, that

embraces creativity and diversity, and is financially rewarding for their

employees and shareholders.

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They are dedicated: To consistently delivering outstanding financial results.

Adidas Group Values Performance

Sport is the foundation for all adidas do and executional excellence is a core

value of their Group.

Passion

Passion is at the heart of their company. They are continuously moving

forward, innovating, and improving.

Integrity

They are honest, open, ethical, and fair. People trust them to adhere to their

word.

Diversity

Adidas know it takes people with different ideas, strengths, interests, and

cultural backgrounds to make their company succeed. They encourage

healthy debate and differences of opinion.

ADIDAS GENERAL APPROACH The ambition of the adidas Group is to be a sustainable company.

SUSTAINABILITY PROGRAMME

Being a sustainable business is about striking the balance between shareholder

expectations and the needs and concerns of their employees, the workers in their

supply chain and the environment. Adidas truly believe that acting as a responsible

business in society is not only an ethical obligation, but will also contribute to lasting

economic success.

Adidas have been working towards sustainability for many years and recognize that

the task ahead of them is a marathon, not a sprint. It is about preparedness and setting

the right pace, having both the drive and stamina to make the distance. And most of all, it is about endurance: overcoming setbacks and difficulties, keeping the finishing

line always in the forefront of their minds.

SUSTAINABILITY STATEMENT

Adidas commitment to manage their business in a responsible way is rooted in the

Group’s values and principles. Their understanding of becoming a sustainable

company is outlined in the adidas Group Sustainability Statement:

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PERFORMANCE, PASSION, INTEGRITY, DIVERSITY

These are the adidas Group values.

They help adidas to create brands that their customers believe in and they commit

them to playing by the rules that society expects of a responsible company. Unlike

sport, society’s rules are not always written down.

Adidas discover them by engaging with the people that their business touches,

learning above all that companies are expected to be accountable for their actions. So

adidas is committed to reporting publicly on the steps that they take to have a more

positive impact on society and the planet.

For the adidas Group, this means designing products that are environmentally sound,

and reducing the environmental impacts of their day-to-day operations and in their

supply chain.

It is about setting workplace standards for their suppliers to meet and helping them to

ensure fair, safe and healthy conditions in their factories. Importantly, it also means

looking after the well-being and careers of their employees – the company’s biggest

asset – and making a positive contribution to the communities where they operate.

Adhering to all applicable laws, directives and guidelines is a business imperative. But

that is not enough. Adidas is continuously striving to improve their performance and

their standing in society. They set themselves targets that stretch them, regularly

review their progress and set themselves new goals.

That is what the world’s leading athletes do, and it is what Adidas must do as a global

leader in the sporting goods industry.

The Sustainability Statement outlines the guiding framework for becoming a more

sustainable company, and provides information on Adidas individual missions in

Social and Environmental Affairs, Environmental Management, Human Resources

Management and Community Affairs.

Adidas proactive approach in managing sustainability issues is an inherent part of the

Group’s Corporate Governance framework and risk management system.

SUSTAINABILITY STRATEGY

In 2010, the adidas Group presented the most comprehensive and aligned Strategic

Business Plan ever created: Route 2015. Over these five years, they want to achieve

qualitative and sustainable growth by building desirable, leading brands in the

consumers’ and customers’ perception. Consumers want the products they buy to be

the best, helping them perform at their best. However, nowadays they increasingly

expect companies to do more than only consider social and environmental issues.

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They want to buy products from companies that are at the leading edge in terms of

making a difference to the world at large.

Adidas know that they can only follow this route if they are fully committed to

managing their business operations in a sustainable way. While they have made big

progress in laying the foundations for success in previous years, they must continue to

drive innovations and to strengthen their systems and processes.

To become a truly sustainable company, Adidas have taken a mature approach for the following five areas:

Products and planet: The adidas Group strives to integrate environmental thinking and acting into its daily operations. They empower their own employees to develop

smarter solutions in product creation and be more resource efficient. The goal is to

substantially improve the Group’s environmental footprint by changing their

processes across every part of their value chain, from innovation and product design

via development and manufacturing operations to their own stores and other sales

channels. They have set measurable targets to be achieved by 2015 and progress

against these targets will be measured on an annual basis.

Compliance in the supply chain: They acknowledge that they have a responsibility to the workers in their suppliers’ factories. Respecting their rights and

ensuring health and safety and environmental protection is important to us. It was

concern for their welfare and rights that led us to write a supplier code of conduct they

call their "Workplace Standards". The Standards are a contractual obligation under the

manufacturing agreement the adidas Group signs with its business partners. They help

us select manufacturing partners and serve as guiding principles in the early identification and treatment of potential issues of concern at their suppliers’ sites.

Over the years, they have developed a detailed approach to ensure that their suppliers,

as well as those suppliers used by their licensees and agents adhere to their Workplace

Standards.

Partnerships and stakeholder engagement: As a company they do not operate in isolation; they rather seek feedback from internal and external stakeholders by

carefully listening, responding and engaging with them. To develop appropriate and

innovative ways of embedding sustainability thinking and processes within their

organization, they interact with their own employees. Externally, they look for

innovative forms of partnerships and collaboration that drive change in the industry.

To achieve this, they engage in multiple ways with peers, civil society, governments,

investors, analysts, customers, industry alliances and others.

Their employees: They are the most important asset of their company! Becoming the leader in the sporting goods industry depends upon the potential, dedication,

knowledge and performance of their employees and excellence of their leaders. As such, they place considerable effort into creating a work environment that stimulates

innovation, team spirit, engagement and achievement. They promote a performance

culture based on strong leadership and therefore link employee compensation to

Group and individual achievements. They aim to continuously develop their

employees with opportunities for career progression, while upholding a culture that

celebrates diversity and encourages global mobility. They also know how important it

is to continue to attract and recruit new people to the adidas Group. To become a

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world-class recruiter they have launched innovative programs to raise their profile

with potential employees.

Community engagement: As a multinational enterprise, the adidas Group is present in many countries around the world and its business operations impact

people’s lives in those communities. While there are many possible ways to get

involved in aid or community programs, the challenge is to know the local needs of

the communities. They therefore have chosen a largely decentralized and brand-

oriented approach for community involvement, recognizing that people in the local offices best understand the needs and cultural sensitivities of their communities. Brand

programs are managed under the adidas Fund, the Reebok Corporate Responsibility

Programme and the TaylorMade-adidas Golf Charity Programme. At Group level,

they continue to support their suppliers’ communities as they make contributions to

organizations that promote sustainable development practices within the industry.

Performing well on these critical issues will help Adidas in their ambition to be the

global leader in the sporting goods industry.

HISTORY Adidas started in a wash room and conquered the world. And in-between, they have scored big and also, sometimes, struggled to reach their goals. They have done their

best for the best. They have improved and grown. Looking ahead to the future, always

remembering where they came from. This is their story.

THE EARLY YEARS

Every great story has a beginning. This one started in a small town in Bavaria,

Germany. After first steps in his mother’s wash kitchen, Adi Dassler registered the

“Gebrüder Dassler Schuhfabrik” in 1924 and embarked on his mission to provide

athletes with the best possible equipment. Gold medals in Amsterdam (1928, Lina

Radke) and Berlin (1936, Jesse Owens) were first rewards and milestones – and only

the start of their story.

FIRST GOLD MEDALS

FOUNDING FATHER

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On August 18, 1949, Adi Dassler started over again at the age of 49, registered the

“Adi Dassler adidas Sportschuhfabrik” and set to work with 47 employees in the small

town of Herzogenaurach. On the same day, he registered a shoe that included the

Registration of the soon-to-become-famous adidas 3-Stripes. From humble beginnings

to a global success story – this was accelerated by a miracle …

A MIRACLE IN BERN

Who would have thought that screw-in-studs on lightweight football boots would help

write history? When the German national football team faced the unbeatable

Hungarians in the 1954 World Cup final, they won so much more than just a trophy.

Their unbelievable victory would be heard around the world for decades to come. And

it made adidas and its founder a household name on football pitches everywhere.

"WHAT A DASSLER"

REEBOK: A BROTHER-TO-BE, STILL MILES AWAY

Two brothers working together for the best of the athlete. Sounds familiar? Well this

story started across the channel, miles away from Herzogenaurach. While adidas

continued to grow after its own 1954 miracle, two British men by the names of Joe

and Jeff Foster gave their grandfather’s company “J.W. Foster and Sons” (founded in

1895) a new name: Reebok. Keep it in mind for now; they will get back to this later.

FINE FEATHERS MAKE FINE BIRDS

What’s in a name? Everything, when you name it after a “Kaiser”. When the Franz

Beckenbauer tracksuit model celebrated its debut, it became the first piece of apparel

for adidas and opened a whole new business to a company that, so far, was famous for

shoes.

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THE ATHLETES’ TRUST

How do you consistently earn the trust of world-class athletes through the decades? Produce innovative products that make them better for once. Adi Dassler’s secret to

success had an additional personal ingredient: he met with athletes (some of them

even as visitors in Herzogenaurach), listened carefully to what they said and

constantly observed what can be improved or even invented to support their needs.

The best of the best trusted adidas and its founder from the beginning. And that would

not change throughout the decades to come.

THE ATHLETES' TRUST

ONE BALL FOR ALL

Footwear for gold medal winners? Check. Apparel for record breakers? Check. Now,

how about something to kick with? Consider it done. In 1970, adidas conquered yet

another branch of the sporting goods industry, delivering the official ball, TELSTAR,

for the 1970 FIFA World Cup™. As the name TELSTAR already tells, the ball was

designed to improve visibility on Black and White TV. It was the beginning of a

wonderful partnership, with adidas providing the Official Match Ball to every FIFA

World Cup™ that followed.

OUT OF THE TRUNK, INTO THE WORLD – THE BIRTH OF ROCKPORT

The best businesses seem to come out of family. Across the pond, a father and son hit

the US roads to sell shoes out of their trunk. Saul and Bruce Katz started the first

company to ever combine advanced materials and technologies in casual footwear:

Rockport. Again, this will be important later on.

THE TREFOIL AND THE OLYMPIC IDEA

In 1972, the world turned to Germany when the Olympic Games opened in Munich.

Just in time for the event, adidas presented a new logo that was here to stay: the

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Trefoil. Then, symbolizing performance. Today, the adidas Originals collection

stands for lifestyle and street. Times may change, but trefoil quality will always

remain

BECOMING A TRUE MULTI-SPORTS SPECIALIST

From Herzogenaurach to the world: the 3-Stripes kept expanding to more and more sports throughout the years. This is reflected in the broad range of athletes who trust

adidas to make them better: besides the usual suspects such as the world’s best

football players, like the Argentinean national team, outdoor icon Reinhold Messner

climbed mountains in adidas shoes and gymnast Nadia Comaneci scored a perfect 10,

repeatedly. BECOMING A MULTI-SPORTS SPECIALIST

DEATH OF A SHOEMAKER

Adi Dassler died on September 6, shortly before his 78th birthday. The man who

almost single-handedly redefined the sporting goods industry and lifted the benchmark

by a mile left behind a flourishing company. The end of one Dassler era became the

start of another: Adi’s son Horst, with support from his mother Käthe, took over and –

among many other things – continued to master his invention, the modern sports

marketing.

THREE IS NOT A CROWD – TAYLORMADE’S FIRST STEPS

What can you do with just three employees? Lay the foundation for a future market

leader, for example. While adidas continued its flourishing ways, Gary Adams and

two colleagues started a company in California that will produce metalwoods tailored

to make players better. TaylorMade will eventually become market leader, proving

that three is not always a crowd.

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A BROTHER-TO-BE FINDING ITS WAY – REEBOK ON THE MOVE

30 years after Joe and Jeff Foster renamed their grandfather’s company, Reebok was

fit to lead. Literally. Following the booming fitness trend, women around the world

work out in the Reebok Freestyle while fitness professional Gin Miller became the

face of Step Reebok. And that’s not all: THE PUMP innovation hits markets in 1989,

making Reebok a household name in other categories as well.

REEBOK ADVERTISING

A COMPUTER FOR YOUR FEET

It sounds quite common today, but back in the ‘80s, a computer did not belong, much

less fit, in your shoe. Didn’t stop adidas from putting it in there. An innovation ahead

of its time, the Micropacer featured a system – known today as miCoach – providing

performance statistics to athletes.

THE MERGE OF ARTS AND SPORTS

When US-based hip hop group Run DMC released “my adidas” it was about setting

the record straight about hard working people in troubled neighborhoods and about pure enthusiasm about their sneakers. Adidas itself only found out about this love

story when the band held up the 3-Stripes shoes during a concert in front of 40.000

fans – one of these concertgoers was an adidas employee. The song became a hit and

Run DMC and adidas unexpected and unique partners. This merge of art and sports

not only set the everlasting street fashion trend off but also marked the birth of non-

athletic promotions in the sporting goods industry.

RUN DMC AND ADIDAS

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END OF THE FAMILY BUSINESS

Horst Dassler’s sudden death in 1987, two years after his mother Käthe passed away,

meant troubled waters for adidas. After the Dassler family exited the company, it is

changing leadership and questionable strategic decisions that caused a record loss in

1992 and brought the company near bankruptcy. But who does not love a comeback

story?

A SLEEPING GIANT’S NEW MASTER

Robert Louis-Dreyfus. The new CEO made an almost impossible job seem easy.

Together with his partner Christian Tourres, he understood that the almost bankrupt adidas did not need to be reinvented; it simply needed a new direction. He turned the

sleeping giant from sales- to a marketing-driven company and steers adidas back on

the growth path. In 1995, six years after becoming a corporation, adidas went public

and its new marketing slogan could not sum it up better: “They knew then, they know

now”.

INNOVATION NEVER SLEEPS

While the company was still dealing with financial challenges, a new marketing team refocused adidas on what it has been known for years: making athletes better. Some of

the most famous adidas innovations, such as Torsion (1989), the Equipment concept

(1991), the Streetball campaign (1992) and the Predator football boot (1994), were

born in this era.

A NEW TEAM MEMBER – SALOMON JOINED THE GANG

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Back on the right track, adidas added a new member to its team. With the acquisition

of the Salomon Group and its brands Salomon, TaylorMade, Mavic and Bonfire, the

company changed its name to adidas-Salomon AG.

HOME SWEET HOME

The year the company’s share is admitted to the DAX, comprising Germany’s 30

largest quoted companies, adidas-Salomon AG committed itself to its roots and moved into new headquarters just outside Herzogenaurach. The “World of Sports”, a former

US military base turned campus, is constantly renewed, extended and modernized

over the following years to house the growing company and its employees. As of

2013, the World of Sports is home to more than 3,000 adidas employees, offers

outdoor sports facilities, a cafeteria, a kindergarten and a gym.

AN INNOVATIVE LEADER

Herbert Hainer became the new CEO of adidas-Salomon AG and, with him; the

company’s focus went even more to innovation. ClimaCool (2002), adizero (2004)

and the F50 football boot, launched just in time for the 2006 FIFA World Cup™ in

Germany, became market hits – as did the new CEO. Herbert Hainer will lead the

adidas Group from one record to the next and will become the longest-standing CEO

of all DAX companies in 2011. Herbert Hainer is surrounded by a very international team of Executive Board members. It currently consists of Robin

J. Stalker from New Zealand (Finance), Eric Liedtke (Global Brands) and Glenn Bennett (Global Operations), both from the USA, as well as Roland

Auschel from Germany (Global Sales).

NEW CENTURY, NEW DIVISIONS

As the new century started, the adidas Group reinvented the game again. In addition to

its sport performance offering, adidas is the first in the industry to introduce a new

lifestyle segment, focusing on sports-inspired street wear. In the years to come, new

partnerships with Yoshji Yamamoto (2002) and Stella McCartney (2004) were born

along with exciting labels such as Y-3 (2003) and Porsche Design Sport (2007).

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IMPOSSIBLE? JUST A BIG WORD.

In one of its most memorable marketing campaigns, adidas lets its biggest athletes

including David Beckham, Haile Gebrselassie and Muhammad and Laila Ali face

their fears, defeats and challenges only to prove that, indeed, impossible is nothing.

The slogan became the synonym for reaching one’s goals.

SALOMON LEAVES THE TEAM, REEBOK JOINED THE FAMILY

One year after adidas and Salomon go their separate ways, when the latter and its

brands (excluding TaylorMade) were sold to Amer Sports, adidas acquired Reebok,

including the brands Rockport and Reebok-CCM Hockey, and brought together two of

the world’s most respected and best-known companies in the sporting goods industry.

In June, the company was re-named adidas AG.

FINDING NEW TEAMMATES

When you are already great, how do you become even better? You keep on training.

Or join forces with someone who complements you and your strengths.

In 2011, the adidas Group acquired the outdoor specialist Five Ten, and TaylorMade

first the golf company Ashworth in 2009 and then, three years later, the golf

equipment company Adams Golf – making the Group even stronger for the road

ahead.

ON ROUTE TO NEW HEIGHTS

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At the end of 2010, the adidas Group presented the most comprehensive strategic

business plans in its history. “Route 2015” incorporates special targets for all brands,

sales channels and Group functions globally. That same year, TaylorMade reached

market leadership and became the biggest golf company worldwide.

WHAT BELONGS TOGETHER COMES TOGETHER

From the court to the catwalk and the stadium to the street. The adidas brand offers

apparel and footwear for every sport, every fashion, every style, whether you are an

athlete or fashionista. And in 2011, adidas brought together sport, street and style for

the first time in one campaign to tell the world what it means to go all in, heart

overhead, inclusion over ego. “All in” (featured by Lionel Messi, David Beckham,

Katy Perry and Derrick Rose) lived from the idea that, no matter your goals or

challenges, you have to go all in for the ultimate success.

REEBOK FOCUSES ON ITS FITNESS ROOTS

If it is already in your DNA, why reinvent the wheel? After Reebok dominated the fitness and aerobics wave / movement in the 1980s with groundbreaking products and

marketing, the company signs a long-term partnership with CrossFit, core strength and

conditioning program, in 2011. Two years later, the studio categories Yoga, Dance

and Aerobics followed and Reebok has been back on track to become THE fitness

brand with the goal to empower consumers to be fit for life. Or should they say

REEbecome?

2013 ENDLESS INNOVATION

Running changed forever. Big words. History will tell us if it is true. Adidas

introduced the Energy Boost running shoe which featured a completely new

cushioning material. Created in cooperation with the German chemical company

BASF, the material combines former contradictory benefits of soft and responsive

cushioning for a running experience unlike any other.

WELCOME TO THE NEW WORLD – A NEW DIGITAL FOCUS

As the world changes, so do they. While a computer in your shoe seemed a bit weird

in the ‘80s, it now is a professional training system: miCoach allows athletes to track record and improve their performance in sports, including football, running or

basketball. It becomes a category of its own. On top, adidas launches a new sub-

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brand: adidas NEO targets the young generation with social tools such as a social

mirror and the opportunity to, literally, shop at the window with the touch of a

button. And the 2012 London Olympic Games become a happening on the adidas

social channels, bringing behind-the-scenes events, competitions and athlete news to

the young consumer.

They do not know what the future in sports will bring but it will not stop us from

shaping it. They will keep pushing the envelope with continuous innovations. And

more importantly: they will make sure that they give you the tools you need to be the

best athlete possible. Just how Adi wanted it.

Company Logo’s

An Intriguing History

The Three Stripes

the evolution of Adidas logo and its popularity as imagery has an interesting history. Adi Dassler had a unique idea in mind. He thought about a logo design that

could give its brand a unique look so that it retains longer in the memory of the people. He then came up with those iconic three stripes. In 1967, the first official

logo looked like this:

The three stripes went well with the masses and complemented the slogan of the

company: “The Brand with the 3 Stripes.” Even Adi Dassler would not have known then that the three stripes would gain such massive recognition.

The Trefoil

it was not until 1972 that the Adi Dassler designed another and the most iconic one of the Adidas logos: The Trefoil. As the company spread its business in apparel and

leisure industry, Adi Dassler realized the need for a more apt logo design that

could demonstrate industrial diversity of his company. Adi Dassler did some creativity with the overall design and transformed the original “three-striped” logo

into the “trefoil”. The idea made sense to the diversity of the brand and the new logo became an instant hit with the masses.

The Triangle

In 1990, Adidas did one more makeover with the logo design. Creative director Peter Moore had an interesting idea in mind. He proposed that the three stripes

should be slanted like a triangle. Adi Dassler liked the idea and approved it. The

first version of the logo was visible on the equipment products of the company. Finally in 1997, the logo became the corporate symbol of the Adidas Company,

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while the classic Trefoil made exclusive for the traditional products.

The Interesting Fact

The three slanted stripes of Adidas logo implicitly suggest a meaningful message to the audience. The triangular shape is symbolic of mountain which stands for the

challenges to be overcome. It goes with the type of product line of the Adidas that mainly sells the shoes for the athletes.

Adidas brands

REEBOK

At Reebok, they love fitness. It's what wakes them up in the morning, what they think about all day and what drives them toward tomorrow. They want to invite people to see fitness the way they do, to be passionate about it the way they are. They believe fitness can be surprising, amazing and fun. They are so inspired by the impact fitness can have and they want to bring it to the world in a fun, intriguing way.

TYLORMADE

TaylorMade pioneered the metalwood in 1979 with a driver so dramatically superior to wooden woods in terms of distance, accuracy, and forgiveness that metal rapidly overtook wood as the driver material of choice among both tour professionals and amateurs. Since then, the determination to create innovative golf club designs has led us to create numerous metal woods, irons, wedges, putters, and balls throughout the past three decades that appeal to the specific needs of all types of golfers, from tour pros to skilled amateurs to handicap golfers. The game-enhancing performance and fashion-forward style of adidas Golf footwear and apparel appeal widely to tour pros and recreational golfers alike. Across the globe, the world-renowned 3-Stripes are worn by an ever-growing legion of athletes, making adidas Golf the fastest-growing golf footwear and apparel brand in the world. Ashworth is an authentic golf apparel brand recognized across the world for quality, comfort, and distinctive design that moves effortlessly from the course to the clubhouse and all points beyond.

ROCKPORT In 1971, Rockport started with a simple philosophy: Engineer comfortable shoes using the latest in advanced technologies. Rockport was the first to engineer performance walking comfort in casual and dress shoes. 40 years later, Rockport continues to make style comfortable for metropolitan professionals around the world. They create collections that are sophisticated and stylish without compromising comfort or functionality. Today, their philosophy is simple: Walkability. They are about making the most walk able shoes in the industry. Their shoes deliver on their

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promise to make style comfortable and enable metropolitan professionals to look good longer.

Organizational Structure of Adidas

In 2000, Adidas announced revolutionary new three divisional structures. This structure

had never been followed by any other organization before. In this structure, Adidas

divided its products into three divisions. The divisions were named as “The Forever

Sports Division”, “The Original Division” and “The Equipment Division”. The divisions

are dealt as separate organizations as all the three divisions produce different product to

cater the different segments of the society. The competitors of these divisions are also

different. Furthermore, these divisions have a network structure within them. This new

structure of Adidas is a very powerful tool to handle all sorts of uncertainties of the

different markets.

Forever Sports Division

The forever sports division spotlights “sports performance” products that Adidas aims at

fashion oriented customers. Forever Sports offers products that compete with Nike,

Reebok, Fila and Puma.

Original Division

Original Division focuses mainly on leisure products. The division offers three product

segments: Re-introduced, or limited volume remakes of the classical goods; Re-

interpreted, or updated products based on Adidas’ “sport” version; and Re-designed,

based on older Adidas styles, but as the company explains, “put in today’s fashion

context.” Adidas wants this division to compete with retailers such as Polo, Abercrombie

& Fitch and GAP.

Equipment Division

The equipment division will be launched in winter 2002. This division will create

multifunctional sports products. The distribution of these products will be in chosen

markets like Germany, France and the US.

Adidas has undergone this structural change but one of its divisions has still not hit the

markets. This new structure of Adidas will provide Adidas with the dynamic framework

that it needs to aggressively expand its businesses and will enable it to deliver significant

growth rates in the coming years.

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Organizational Culture of Adidas

Before 1993, that is when Louis-Dreyfus joined as the CEO of Adidas, Adidas was a very

formal and centralized company. All the top management was German and as Louis-

Dreyfus recalls, “it was a very self-centered German company which was absolutely sure

that it was right.” There was a lot of bureaucracy in the company which had built up over

several generations. Louis-Dreyfus realized this fact on the very first day when he joined

as the President of Adidas, when he was asked to approve a salesman expense account

for $ 300. He soon realized that this was the company’s biggest enemy.

Adidas more or less tried to follow the lines of its rival Nike. Nike has a strong sports-

oriented culture and is promoted through company practices such as paying employees

extra for biking to work instead of driving. Nike is recognized worldwide as an athlete’s

company which, hire former college, professional and Olympic athletes to design and

market its shoes and clothing for sports enthusiasts. The company chooses to call its

headquarters a "campus" instead of an office. Employees are called "players,"

supervisors are "coaches" and meetings are "huddles."

Nike has been striving towards an inner culture that reflects this mantra. Employees are

given an hour and a half for lunch to play sports or simply workout. The new Nike is not

just about shoes and slam-dunks, but about promoting a lifestyle. All new employees

view a video of sports highlights accompanied by a soundtrack that discusses the soul of

the athlete and the competitive spirit. In addition, management sends weekly emails to

update employees on the recent successes of Nike-sponsored athletes, and often hosts

spokespeople to motivate and thank its staff for contributions to the sports world.

Adopting a new culture is not an easy job. The primary steps taken by Louis-Dreyfus

were, that as soon as he joined Adidas as its CEO, he replaced nearly all of the senior

managers and brought in young managers. He slashed the company's bureaucracy,

adopted American accounting rules and brought in international management talent. In

a matter of weeks, the entire German senior management had been fired. The company's

chief financial officer was Australian and the international marketing manager was a

Swede. English became the official language of the head office and no Germans remained

on the managing board of the company other than himself and some other trusted aides.

In another break with the traditional German workplace, corporate life was made almost

gratingly informal. Unlike other German managers, the managers of Adidas show up for

work wearing sweatshirts and sneakers. A lot of freedom is now given to the employees

working there. None of the decisions are interfered with and no complaints are made

about any decision.

The culture of Adidas does not only care for the internal environment but also the external

environment. Its culture now emphasizes on socially responsible, safe and environmentally

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sustainable practices in the company and its supply chain to enhance the value of its brands.

Adidas emphasizes on the fact that athletes need a healthy planet, just as they need the best

products, as it is hard to run when the air is poisoned.

Globally, Adidas has made, or is in the process of making the following commitments

towards reducing its impact on the environment:

1. Preparation of a Germany-based global technology center dedicated to developing

environmental friendly footwear manufacturing technologies.

2. ISO 14000 (a set of international standards which help make the world a better place to

live) Certification.

3. Cutting wastes and conserving resources.

4. Promoting a culture of responsible outdoor athleticism and an athletic, healthy lifestyle

5. teaming up with other organizations and companies to help Adidas develop sustainable

socially responsible business practices.

The brand values of the company are authenticity, inspiration, honesty and commitment that

are derived from sports. They form the basis of its Standards of Engagement, the company’s

code of conduct that aims to ensure that its suppliers´ factories are safe, fair places in which

to work.

Adidas vows to adhere to social and environmental laws, directives and guidelines while

continually improving upon its own contribution to a sustainable society.

Adidas aims to communicate with all stakeholders in an atmosphere of mutual trust and

respect. It provides them with appropriate information related to the social and environmental

performance of the group on a regular basis.

WORKING AT ADIDAS Working at adidas is more than just a job. It's a mindset. A way of life. It's a place where your passion for sport and a sporting lifestyle integrates seamlessly with your

working life. It's a place where the rules of the game are clear and they play fair. It's a place where work and play are one and the same. Where passionate and dedicated people from all walks of life come together to deliver one shared goal—to

be the best. Adidas founder, Adi Dassler, was an athlete. He was inspired by a single idea: to provide every athlete with the best footwear for his or her respective

discipline. And 85 years later, they have more than 40,000 employees worldwide who still follow the same principles. Adidas employees, regardless of stature, put this same passion and commitment to innovation into each concept, component,

process, and product they produce, as Adi did on his very first pair of shoes. For adidas to continue to evolve and grow, they offer each and every employee

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throughout the global organization the chance to demonstrate and improve their capabilities. They provide empowerment and training to help them achieve their

goals, on and off the court. They reward performance, offer opportunities on a global level and encourage open communication at every level. Working as a team to

achieve our goals is natural at Adidas. Supporting and celebrating each other's successes give employees of adidas a sense of being. It's a place where people feel inspired and start each working day as excited as you were on your first. At adidas

they have the opportunity to unite the world through sport!

BENEFITS WORKING AT ADIDAS

Adidas provide their full- and part-time employees with a generous, comprehensive,

and individualized benefits package. Here is a sample of the premium benefits you can look forward to receiving while working for the adidas Group. *These benefits

may vary depending on location and position.

The Basics

Health Insurance (Medical, Dental, Vision & Prescription Drugs) Retirement Plans (Pension/401K) Supplemental Insurance (Disability/Life/Accident)

Compensation

You can rest assured that the adidas Group total compensation package is

effective in attracting and retaining top candidates and employees. Why? They

compare our plans side-by-side with those offered by other companies and

also listen to employees and new prospects for their reactions to our benefits

package.

Vacation & FlexiTime

Adidas motto, "As few rules as necessary, as much flexibility as possible" also applies to our vacation policy. The adidas Group offers generous vacation &

FlexiTime programs to ensure our employees can comfortably balance their

work and life needs.

Learning & Development

"Fit for Today" and "Fit for Tomorrow" training courses are offered to equip

employees with the skills necessary to perform in our constantly changing and competitive landscape. Our "Fit for Tomorrow" courses prepare our

employees for their next adventure here within the Group-whether that's

moving into a leadership position or taking on new global opportunities.

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The Perks

Adidas also believe in doing things a little differently. In addition to the

traditional benefits, adidas Group offers a unique and diverse range of perks

that makes working here not just another job. *Perks vary by location.

Lifestyle:

Personal trainers

Onsite gyms

Track and field, basketball, tennis and volleyball facilities

Cross-Fit Facilities

Discounted travel and organized sporting and adventure weekends

Company-wide sporting events

Opportunities to meet visiting athletes and celebrities

Competitions and celebrations

Tickets to world sporting events and games

Product discounts for you, friends and family

Culture:

Free language courses

Strong global career opportunities

Full-service kitchens offering international cuisine (discounted rates for employees)

Company cafes

Remote connectivity and employee collaboration platforms

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Balance & Community Involvement

Adi Dassler Fund global volunteering opportunities

Wellness support

Daycare in selected locations

Commuter Programs

Bicycle share programs

It's not uncommon during lunch hour to find adidas employees engaging in

their favorite sport at one of their athletic facilities or traveling to one of their

170+ locations worldwide for a business meeting. One thing is certain for

adidas Group employees; they are always ready for an adventure, in life, in

work and in giving back!

ADIDAS WORKPLACE STANDARDS General Principle

Business partners must comply fully with all legal requirements relevant to the conduct of their Businesses Employment Standards:

Forced Labour

Business partners must not use forced labour, whether in the form of prison labour, indentured labour, bonded labour or otherwise. No employee may be compelled to

work through force or Intimidation of any form or as a means of political coercion or as punishment for holding or expressing political views.

Child Labour

Business partners must not employ children who are less than 15 years old, or less than the age For completing compulsory education in the country of manufacture

where such age is higher than 15.

Discrimination

Business partners must not discriminate in recruitment and employment practices. Decisions About hiring, salary, benefits, training opportunities, work assignments, advancement, discipline And termination must be based solely on ability to perform the job, rather than on the basis of Personal characteristics or beliefs, such as race, national origin, gender, religion, age, disability, marital status, parental status, association membership, sexual orientation or political opinion. Additionally, business partners must implement effective measures to protect migrant employees against any form of discrimination and to provide appropriate support services that reflect their special status. Wages & Benefits

Wages must equal or exceed the minimum wage required by law or the prevailing industry wage, whichever is higher, and legally mandated benefits must be provided. In addition to compensation for regular working hours, employees must be compensated for overtime hours at the rate legally required in the country of manufacture or, in those countries where such laws do not exist, at a Rate exceeding the regular hourly compensation rate. Wages are essential for meeting the basic needs of employees and reasonable savings and Expenditure. They seek business partners who progressively raise employee living standards through improved wage systems, benefits, welfare programs and other services, which enhance quality of life.

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Working Hours Employees must not be required, except in extraordinary circumstances, to work more than 60 Hours per week including overtime or the local legal requirement,

whichever is less? Employees must be allowed at least 24 consecutive hours rest within every seven-day period, and must receive paid annual leave.

Freedom of Association & Collective Bargaining Business partners must recognize and respect the right of employees to join and

organize Associations of their own choosing and to bargain collectively. Business partners must develop and fully implement mechanisms for resolving industrial

disputes, including employee grievances, and ensure effective communication with employees and their representatives.

Disciplinary Practices Employees must be treated with respect and dignity. No employee may be subjected

to any Physical, sexual, psychological or verbal harassment or abuse, or to fines or penalties as a Disciplinary measure. Business partners must publicize and enforce a non-retaliation policy that permits factory employees to express their concerns about

workplace conditions directly to factory management or to us without fear of retribution or losing their jobs.

Health & Safety

A safe and hygienic working environment must be provided and occupational health

and safety Practices which prevent accidents and injury must be promoted. This includes protection from fire, Accidents and toxic substances. Lighting, heating and ventilation systems must be adequate. Employees must have access at all times to

sanitary facilities which should be adequate and clean. Business partners must have health and safety policies which are clearly communicated to Employees. Where

residential facilities are provided to employees, the same standards apply. Environmental Requirements

Business partners must make progressive improvement in environmental performance in their own operations and require the same of their partners, suppliers

and subcontractors. This Includes: integrating principles of sustainability into business decisions; responsible use of natural Resources; adoption of cleaner production and pollution prevention measures; and designing and Developing

products, materials and technologies according to the principles of sustainability.

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EXECUTIVE BOARD Adidas Executive Board is composed of five members. Each member is responsible for a major business area within the Group.

HERBERT HAINER - CHIEF

EXECUTIVE OFFICER

I have been a passionate athlete and

sports fan ever since I was a little boy, playing football in my hometown. I also

have a passion for business. I used to work in my parents’ butchery as a kid and opened my own pub when I was a

student.

BORN // 1954 in Dingolfing (Bavaria), Germany.

NATIONALITY // German

EDUCATION // Degree in Business Studies

CV - Herbert Hainer

ROLAND AUSCHEL - GLOBAL SALES

One of the adidas Group’s strengths is to

value partnerships and to bring them to new levels – be it with athletes, clubs or

customers. Helping my global team to develop such strategic customer relationships as well as a future-oriented

distribution approach is a very exciting task for me.

BORN // 1963 in Bad Waldsee, Germany

NATIONALITY// German

EDUCATION // Degree in Business Studies (“Diplom-Betriebswirt”),

BA European Business Studies (UK),

MBA (US)

CV - Roland Auschel

GLENN BENNETT - GLOBAL OPERATIONS

Change is inevitable in just about

everything we do in our company. Having

been associated with their brands for 30

years, I remain inspired and motivated by

their team’s ability to continually evolve

and react to new business opportunities

and challenges in this ever-changing

environment we work in.

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BORN // 1963 in New Hampshire, U.S.A.

NATIONALITY // American

EDUCATION // Degree in Computer Science

CV - Glenn Bennett

ERIC LIEDTKE - GLOBAL BRANDS

BORN // 1966 in Dayton, U.S.A.

NATIONALITY // US-American

EDUCATION // Bachelor of Arts – Journalism

CV - Eric Liedtke

ROBIN J. STALKER - CHIEF FINANCIAL OFFICER

BORN // 1958 in Palmerstone North, New

Zealand

NATIONALITY // New Zealand

EDUCATION // Degree in Business Studies,

Chartered Accountant

SUPERVISORY BOARD The Supervisory Board of adidas AG - in accordance with the German Co-Determination Act (Mitbestimmungsgesetz) is composed of twelve members.

The core functions of the Supervisory Board include the appointment and dismissal of Executive Board members, the supervision and consultancy of the Executive Board, the approval of the financial statements as well as the authorization of important operative planning and corporate decisions.

The term in office of all members of the Supervisory Board started with the end of the Annual General Meeting of adidas AG on May 8, 2014. By rotation, the next Supervisory Board elections will be held in 2019. In accordance with the German Co-Determination Act (Mitbestimmungsgesetz - MitBestG) six of its members are elected by the Annual General Meeting and six members are elected by the employees. For further information on the Supervisory Board members, please see below.

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IGOR LANDAU, CHAIRMAN

BORN // 1944

NATIONALITY // French

EXERCISED PROFESSION // Pensioner, Member of the

Board of Directors, Sanofi-Aventis S.A., Paris, France

MANDATES

SABINE BAUER, DEPUTY CHAIRWOMAN

BORN // 1963

NATIONALITY // German

EXERCISED PROFESSION // Chairwoman of the Central

Works Council, adidas AG

WILLI SCHWERDTLE, DEPUTY CHAIRMAN

BORN // 1953

NATIONALITY // German

EXERCISED PROFESSION // Independent Management

Consultant, Partner, WP Force Solutions GmbH (in the

course of incorporation), Bad Homburg v.d. Höhe, Germany

MANDATES

DIETER HAUENSTEIN

BORN // 1957

NATIONALITY // German

EXERCISED PROFESSION // Member of the Works

Council, Herzogenaurach, Germany

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DR. WOLFGANG JAEGER

BORN // 1954 NATIONALITY // German

EXERCISED PROFESSION // Managing Director,

Hans-Böckler-Stiftung, Düsseldorf, Germany

DR. STEFAN JENTZSCH

BORN // 1960

NATIONALITY // German

EXERCISED PROFESSION // Corporate Finance

Consultant, Partner, Perella Weinberg Partners UK LLP,

London, Great Britain

MANDATES

HERBERT KAUFFMANN

BORN // 1951

NATIONALITY // German

EXERCISED PROFESSION // Independent

Management Consultant, Stuttgart, Germany

MANDATES

KATJA KRAUS

BORN // 1970

NATIONALITY // German

EXERCISED PROFESSION // Managing Partner Jung

von Matt/sports GmbH, Hamburg, Germany

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KATHRIN MENGES

BORN // 1964

NATIONALITY // German

EXERCISED PROFESSION // Executive Vice President

Human Resources and Infrastructure Services, Henkel AG & Co.

KGaA

MANDATES

ROLAND NOSKO

BORN // 1958 NATIONALITY // German

EXERCISED PROFESSION // Trade Union Official, IG

BCE, Headquarter Nuremberg, Nuremberg, Germany

MANDATES

HANS RUPRECHT

BORN // 1954 NATIONALITY // German

EXERCISED PROFESSION // Sales Director Customer

Service,

Central Europe West, adidas AG

HEIDI THALER-VEH

BORN // 1962 NATIONALITY // German

EXERCISED PROFESSION // Member of the Central

Works Council, adidas AG

*Employee Representative

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SUPPLY CHAIN APPROACH Besides their own employees, workers in their suppliers’ factories play a central role in

their sustainability programme.

It was concern for their working conditions and well-being that led us to establish their "Workplace Standards", the supply chain code of conduct which also covers workers’ health and safety and provisions to ensure environmentally sound factory operations. As their supply chain is large, multi-tiered and varied, they have a detailed and systematic approach to managing the relationships with their suppliers. To enforce compliance with adidas Standards they have a multi-level monitoring and enforcement process in place, including the use of an innovative rating system for the assessment of their suppliers. The rating results are shared with adidas Sourcing teams which then decide whether and to which extent they continue the business relationship with a specific supplier.

WORKING WITH SUPPLIERS

Checking the rules are followed

In order to check if suppliers comply with adidas Workplace Standards, the adidas Group SEA team and commissioned third-party experts visit and audit the factories they work with. In addition, independent auditors verify compliance and evaluate their programmatic activities to implement adidas supply chain code of conduct. To facilitate workplace improvements in factories adidas support their suppliers with training and capacity-building initiatives, either conducted by their own staff or by other stakeholders and third-party service providers. Selecting new suppliers

in close cooperation with adidas business function Global Operations and other Sourcing entities, all potential new suppliers are assessed by the adidas Group’s SEA team. The goal is to ensure that new suppliers meet adidas Standards. Adidas Sourcing teams can only place orders with a new supplier if the SEA team has given approval. If factories do not meet adidas standards, adidas reject them, but if the issues are ones that can be fixed adidas give them a rigorous timeline to correct the issues, and go back and check again to see if they have improved. If they have improved, they are approved as a supplier producing for the adidas Group. By setting a high entry bar for potential and new suppliers, adidas avoid getting into business relationships with suppliers that have serious workplace issues and insufficient means of improving unacceptable conditions. Rewarding good performance

once a factory is approved, adidas continue to check working conditions there. For those suppliers who manufacture directly for the adidas Group, adidas regularly check how the factory is performing: is it continuing to make an effort to improve, to provide training and to meet adidas expectations with regard to the fair treatment of the workers and safety in the workplace? At the end of each year, the factory gets a score and that score is given to their Sourcing managers, who add it to their own scores for quality and delivery, etc. They then decide how many orders the factory should receive in the future. They want their factories to know that if they do well and are meeting their Standards they will remain their partner and continue to receive orders. This is a carrot. They also have a stick.

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Taking action over poor performance

when adidas check factories and find that the factory management is not treating their workers fairly or if they don't have a safe and healthy workplace or are not meeting environmental requirements, adidas take action. Adidas issue warning letters asking that the problems which they have found be fixed. If the problems are not fixed after the first letter, adidas send a second letter to stop orders, and if they have to send a third letter, adidas ask their Sourcing team to stop working with the factory. If adidas find very serious issues at a factory, such as life-threatening safety issues, they may immediately end their business relationship and write to the local government and ask for their help to fix the issues that they have found. This whole process is called enforcement. Providing information for workers

Giving workers the opportunity to air grievances in confidence is a key element in helping us to ensure fair, safe and healthy workplace conditions. An approved factory has to place open letters on the notice boards that tells workers whom they can contact to address issues of concern. The letters inform workers that they will help them find solutions to factory issues, if they cannot find solutions through the factory’s usual mechanisms. Workers are also provided with local numbers to call and addresses to write to. In some cases the telephone hotlines that they use are run by non-profit organizations and in other cases their own field staff take the calls and respond to the workers' concerns. A lot of their time is spent following up on calls or requests from workers about hard-to-fix issues, such as the wrong salary payment, working too many hours, or being unfairly let go. In 2012, they piloted a new management-worker communication project with one of their suppliers in Indonesia: workers can now send SMS text messages to hotlines to raise the alarm if they think their rights are being compromised. Workers' mobile numbers are being anonymously gathered so factory management can send out group texts reminding workers of safety issues or letting them know about changes in policy. Working with Licensees

The adidas Group continues to grow, and one way it grows is by entering agreements with other ‘specialty’ businesses to make, sell or distribute their products. This is what adidas call licensing. Because of licensing and the use of agents, the adidas Group also has many indirect suppliers. These are factories working not directly for adidas, but for other customers. To manage this part of their supply chain adidas ask their agents and licensees to copy their own ‘in-house’ monitoring approach and have people check the factories and help them stay true to adidas rules. In many cases, the companies managing adidas indirect suppliers use external social auditing firms to do the checking. Adidas call these consultants external monitors.

ENVIRONMENTAL SOURCING STRATEGY

Since 2010, adidas have a dedicated Environmental Sourcing Strategy (ESS) in place to align the sustainability efforts and activities in their supply chain with those of the overall adidas Group Environmental Strategy 2015. The key goals of their ESS are to:

Have sound management systems in place at a supplier level which reduce and eliminate environmental hazards

Have environmental and resource management embedded in their sourcing decisions and the selection and retention of suppliers

Reduce the overall environmental footprint of material sourcing and the manufacture of their products.

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In order to be able to manage the environmental risks within their supply chain, they developed and implemented a Supplier Risk Assessment Tool and an Environmental Assessment Tool, which rank their footwear, apparel and accessories & gear suppliers, but also selected

material suppliers, according to their level of environmental risk. This in turn has helped us to develop targeted training and capacity-building programs for their suppliers as well as appropriate standards and policies.

SUPPLY CHAIN STRUCTURE The adidas Group has outsourced most of its production. Overall, they work with

more than 1,200 independent factories from around the world that manufacture their products in 65 countries.

Adidas supply chain is global and multi- layered, with many different types of business partners, some of whom are directly contracted factories, while others are not.

In 2013, the top five countries per region by number of supplier sites were:

The Americas: United States, Brazil, Canada, Argentina and Mexico

Asia: China, Vietnam, Korea, Japan and Indonesia EMEA: United Kingdom, Germany, Italy, Turkey and Spain.

The adidas Group is one of the very few companies in the industry that has fully disclosed its

global supplier list,

Adidas influence in terms of social and environmental compliance is linked to the strength of

their partnerships, and is often proportional to the scale and stability of the orders placed with their suppliers.

SUPPLIER FACTORIES BY REGION IN 2013

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DIFFERENT SOURCING RELATIONSHIPS Direct sourcing model The adidas Group holds direct contractual relationships with its core suppliers who are

centrally supervised by Global Operations. Global Operations is a Group function which manages product development, commercialization, distribution and supervision of the

manufacture of apparel, footwear and accessories for the adidas, Reebok and TaylorMade-adidas Golf segments. These suppliers produce the predominant share of the total sourcing volume of the Group.

Indirect sourcing model the other part of their product volume, which is a minor portion, is sourced by agents or is made under license. Agents place orders with their preferred suppliers. Licensees may either

place orders directly with their suppliers or use agents as intermediaries. Adidas indirect supply chain complements their direct sourcing by meeting specific requirements that cannot

be serviced through Global Operations.

Local market production

In order to quickly seize short-term opportunities in their local markets, to satisfy a niche market requirement, or in some cases to react to certain trade regulations, adidas Group

subsidiaries may also source from local suppliers in a specific country that are not overseen by Global Operations; these suppliers do require authorization from the Social and Environmental Affairs team for production.

TYPES OF SUPPLIERS

Adidas suppliers fall into five broad categories:

Main suppliers. They have a direct contractual relationship with the adidas Group for the supply of products, whether for export or domestic market consumption.

Subcontractors. These are factories that have been subcontracted by their suppliers to

perform manufacturing operations the main suppliers are not capable of doing in their own

facility.

Material and other service providers. These suppliers may not have a direct business relationship with the adidas Group, but supply goods and services to their main suppliers.

Licensees. Independent companies which manage the design, production and distribution of

specific products, under license to the adidas Group. In 2013, the adidas Group worked with

57 licensees whose suppliers sourced products from 401 factories in 50 countries.

Agents. Independent companies that act as intermediaries to source product manufacturing, manage the manufacturing processes, and sell finished products to the Group.

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SUPPLIER RELATIONSHIP OVERVIEW

SUPPLY CHAIN TRAINING As part of their continuous efforts to achieve more effective and sustainable practice within the supply chain, they have initiated a system of multi-level and cross-functional

training sessions with their global supplier network.

In 2013, they trained nearly 3,000 staff and personnel through 148 training sessions. They have three main approaches to training content:

Fundamental training: includes introductory training for the Workplace Standards, Fair

Factories Clearinghouse (FFC) data entries, new factory approval process and the SEA operating guidelines.

Performance training: includes detailed training on specific issues on labor, health, safety and environmental practices, as well as initial assessment monitoring methods.

Sustainability training: includes training in the KPI and rating tools, sustainable compliance

planning and supplier self-assessment methods.

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SUPPLIER TRAINING SESSIONS BY TYPE IN 2013

ADIDAS GREEN COMPANY Green Company is the name which adidas gave to its environmental programme at their own sites around the globe.

It was launched in 2008 and builds on years of environmental initiatives, drawing them together into a coherent programme to improve the environmental performance of their administration offices, manufacturing sites and distribution centers.

Adidas Green Company vision is to become a zero-emission company by:

Embedding environmental best practice in everything they do Maximizing environmental efficiency gains Supporting and harnessing their people’s passion for a greener planet.

Adidas set ambitious targets in the areas of energy, water and paper consumption, carbon

emissions and reduction of household waste, and each individual site – be it one of their offices, distribution centers or their own factories around the globe – contributes to meeting these targets. Adidas knows this cannot be done without the active involvement of their

people. It is in their daily working lives where they need to make the changes that will result in the adidas Group being a more sustainable company, one that achieves its environmental

ambitions. So adidas have established the Green Team concept.

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CERTIFICATION TO ISO 14001 In order to manage and influence environmental impacts at their own sites, adidas have implemented a global Group headquarter-based environmental management system that is certified according to the international standard ISO 14001. Twelve major locations around the globe already have certified systems in place which are linked into the global Group system. More sites plan to join this system and to become certified within the next years.

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ISO 14001 CERTIFICATION - INTERNAL COMMUNICATION

As of December 2013, the following sites of the Adidas Group have certified environmental managements systems:

Name of site Region EMS standard Certif ied

since

Adidas Group Central Management for Green

Company, Herzogenaurach, Germany GLOBAL ISO 14001 2010

Adidas Office, Portland, USA AMERICAS ISO 14001 2010

Reebok Headquarters, Canton, USA AMERICAS ISO 14001 2010

TaylorMade-adidas Golf Headquarters, Carlsbad, USA AMERICAS ISO 14001 2010

Adidas Group Distribution Centre, Spartanburg, USA AMERICAS ISO 14001 2010

Reebok-CCM Hockey Headquarters and Distribution Centre, Montreal,

Canada AMERICAS ISO 14001 2010

Adidas Group Headquarters, Herzogenaurach, Germany EMEA ISO 14001 2011

Sports Licensed Division Factory, Indianapolis, USA AMERICAS ISO 14001 2011

Adidas Footwear Factory, Scheinfeld I, Germany EMEA EMAS; ISO

14001 1998; 2012

European Distribution Centre, Scheinfeld II, Germany EMEA ISO 14001 2013

Distribution Centre Uffenheim, Uffenheim, Germany EMEA ISO 14001 2013

Adidas Office, Stockport, United Kingdom EMEA ISO 14001 2013

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Privacy policy The Companies in the adidas Group (together ‘adidas’, "we" and "us") respect the privacy of the visitors to the adidas.com website and the local websites connected with it, and take great care to protect your information.. This privacy policy tells you what information they collect from you, how they may use it and the steps they take to ensure that it is protected.

What kind of information does adidas collect?

There are cases where adidas may ask you for personal information, such as your name, address, date of birth, gender, email address, etc. They do this for instance when you register for contests/promotions, respond to communication such as e-mail, and for services that require registration or subscription. If you would like to be on their mailing list, they will ask you to actively opt-in. They might also collect personal information from you about a third party, for instance if the website allows you to send an e-postcard, in which case they need to know the name and e-mail address of the recipient. That information will only be used for the specific purpose (delivering the e-postcard) and adidas will not further contact the third party unless the third party contacts us.

They use 'cookies' to gather information about your visits to their website and enhance your experience. You can find more information on how they use cookies in the section.

When you visit their website they collect so called ‘click stream’ data (server address, domain name etc.). This information can be combined with information you have provided to us (for instance by registering), which will enable us to analyze and better customize your visits

Use of Visitors’ Information

All personal information that they obtain about you will be recorded, used and protected by us in accordance with current data protection legislation and this privacy policy. They will primarily use your personal information to provide products and services to you and, for example:

To send you information/materials via e-mail or sms-messages about products, offers and news they think could interest you. This information may relate to products, offers and news of adidas and/or its licensees or carefully selected commercial partners. They only send you this if you have opted-in to receive adidas e-mails and/or sms messages. In case you do not want to receive any e-mails and/or sms messages from us anymore, or if you want to modify your personal data or want your personal data to be deleted from their database, they refer you to the 'Opt-out, delete or modify personal information' section below

To analyze visits to the website and learn about the interests of their visitors in aggregate and also on personal level to better understand your interest and need, so they can improve their products and services and deliver to you the type of content, features and promotions that you are most interested in.

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Who manages Visitors’ Information

The global and local websites of adidas and the information collected, are managed and controlled by adidas AG (Adi-Dassler-Platz 1-2, 91074 Herzogenaurach, Germany. The servers that make the global and local websites of adidas available are located in the USA. If you are located outside the USA please note that the information you provide will be transferred to the USA and by submitting the information you authorize this transfer. Adidas has entered into an agreement with the hosting company in the USA to provide sufficient safeguards for the protection of your data. Personal information will be handled in accordance with current data protection legislation and this Privacy Policy.

Protection of visitors’ information

In order to protect the information you provide to us by visiting their website they have implemented various security measures. Your personal information is contained behind secured networks and is only accessible by a limited number of people, who have special access rights and are required to keep the information confidential.

Please keep in mind though that whenever you give out personal information online there is a risk that third parties may intercept and use that information. While adidas strives to protect its user's personal information and privacy, they cannot guarantee the security of any information you disclose online and you do so at your own risk.

Children’s’ privacy

Adidas encourages parents and guardians to spend time online with their children and to participate in the activities offered with the multitude of sites the World Wide Web (WWW) offers.

When a child tries to submit his/her registration he/she will be asked to submit the same kind of information as indicated in the above section ‘Information they collect from visitors’. Furthermore the information provided by the child and gathered (for instance through the use of cookies) during his/her visit may be used as indicated in the said above section.

Adidas is committed to protect the privacy of children and has no intention of collecting personal data from children under the age of 13. If you are a child under the age of 13 and you try to submit your registration, the registration will be rejected and they will inform you that they do not accept registrations from children under 13. They encourage parents and guardians of children under 13 to regularly check and monitor their children’s use of e-mail and other activities online.

Third Parties

Disclosing personal information to third parties

Other than to the companies belonging to the adidas Group for the purposes set out above, and except as described below they do not sell, trade or otherwise transfer your personal information to third parties without informing you in advance and in accordance with applicable data protection law. All members of the adidas Group value the privacy and protection of your personal information and have similar privacy policies in place. Your data may be transferred to web site hosting partners and other parties who assist us in designing and operating the website, executing services (for instance prize fulfillment) or help us analyze collected data. These parties will only use your data for the purpose of carrying out the work as indicated and will be required to keep the information confidential. They will also release personal data if such is required by law.

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Links to Third Parties

For your convenience and to improve the usage of the website they insert links to third parties, for which this privacy policy does not apply. These links take you outside their service and off the adidas site and are beyond their control. This includes links from partners that may use adidas' logos as part of a co-branding agreement. The sites you can link to have their own separate privacy policy and although they seek to protect the integrity of their site, adidas is not responsible and cannot be held liable for the content and activities of these sites. Your visit/access to these sites is therefore entirely at your own risk. Please note that these other sites may send their own cookies to users, collect data or solicit personal information

Use of cookies

A cookie is a small string of information that the website that you visit transfers to your computer for identification purposes. Cookies can be used to follow your activity on the website and that information helps us to understand your preferences and improve your website experience. Cookies are also used to remember for instance your user name and password.

You can turn off all cookies, in case you prefer not to receive them. You can also have your computer warn you whenever cookies are being used. For both options you have to adjust your browser settings (like internet explorer). There are also software products available that can manage cookies for you. Please be aware though that when you have set your computer to reject cookies, it can limit the functionality of the website you visit and it’s possible then that you do not have access to some of the features on the website.

Opt-out, delete or modify personal information

You may cancel your registration at any time, and you can choose to opt-out of receiving any e-mails and/or sms messages from adidas. Additionally you can choose to have all your personal information deleted from their database.

If you want to opt-out, delete or modify your personal information, please visit the registration page. They encourage you promptly to update your personal information if it changes.

Changes to the policy and how to contact adidas

Changes to the policy

They may from time to time need to amend this policy, due to changes in regulations and to keep up with new developments and possibilities on the internet. They therefore reserve the right at their discretion to make these changes and ask you to check this page periodically, as you are bound by these changes when visiting their website.

The local adidas websites, accessible through the adidas.com site have similar privacy policies in place, but there could be some differences due to local regulations. We therefore encourage you to read the privacy policy of each adidas site you visit.

How you can contact adidas

If you have any questions or comments relating to their website and/or the privacy policy, please write to us: adidas AG, Adi-Dassler-Str. 1-2, 91074 Herzogenaurach, Germany

Your consent

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By using the adidas websites you signify that you agree to the terms of this Privacy Policy as well as to their Terms and Conditions. If you do not agree with the terms of their Privacy Policy and their Terms and Conditions please do not provide us with personal information and leave this website.

Online policy

The Privacy Policy does not extend to anything that is inherent in the operation of the internet, and therefore beyond adidas' control, and is not to be applied in any manner contrary to applicable law or governmental regulation. This online privacy policy only applies to information collected through their website and not to information collected offline.

AWARDS AND RECOGNITION Feedback and positive recognition is important to us.

Adidas value feedback from their stakeholders about their programme and they appreciate positive recognition from international institutions and rating agencies, non-governmental organizations (NGOs) and socially responsible investment (SRI) analysts. These

organizations evaluate adidas work through in-depth analysis of the company’s social and environmental programme, including document review and interviews with employees and

management. The following awards demonstrate external recognition and acknowledgement of the adidas

Group’s sustainability initiatives worldwide:

2014 – adidas Group among the "Global 100 Most Sustainable Corporations in the

World" for the 10th time in a row; first time in top 10 - ranked 8th 2013 - adidas AG included in Dow Jones Sustainability Indices for 14th time - Industry

Leader for 10th time

2013 - adidas AG again included in the STOXX® Global ESG Leaders indices 2013 – Continued inclusion in the FTSE4Good Index

2013 - Reconfirmed inclusion in the Ethibel PIONEER and Ethibel EXCELLENCE Investment Registers

2012 - Inclusion in the Carbon Disclosure Leadership Index for Germany, Austria and

Switzerland Inclusion in the Vigeo Group Indexes

Inclusion in the ECPI Ethical Index EMU 2011 – Silver medal for adidas AG as 'Sustainable Retail Company 2011' 2009 - Best rating by European consumer organizations

2008 – Re-accreditation by the Fair Labor Association 2007 – B.A.U.M. Environmental Award

2006 – Product rated best for quality and CSR by Stiftung Warentest 2006 – adidas Group among Top Employers of the Year 2005 – Environmental Manager of the year

2002/2004 – Best Sustainability Reporting

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2014 – ADIDAS GROUP AMONG THE "GLOBAL 100 MOST SUSTAINABLE CORPPORATIONS IN THE WORLD" FOR 10TH TIME IN A ROW; FIRST TIME IN TOP 10 - RANKED 8TH

In January 2014, the adidas Group made it for the tenth consecutive time into the ranking of the Global 100 Most Sustainable Corporations in the World. For the first time ever, the

company made it into the top 10 of the list - it is ranked 8th. The Global 100 is an annual project initiated by Corporate Knights, a Toronto-based media and investment advisory company. The media arm publishes Corporate Knights Magazine,

the world’s largest circulating magazine focused on responsible business. The investment advisory arm, Corporate Knights Capital, builds indexing solutions and market-beating

portfolios for institutional clients. Launched in 2005, the Global 100 is announced each year at the World Economic Forum in

Davos. More information about the Global 100 Most Sustainable Corporations in the World.

2013 - ADIDAS AG INCLUDED IN DOW JONES SUSTAINABILITY INDICES FOR 14TH TIME - INDUSTRY LEADER FOR 10TH TIME

For the 14th consecutive time, adidas AG has been selected to join the Dow Jones Sustainability Indices (DJSI), the world's first global sustainability index family tracking the performance of the leading sustainability-driven companies worldwide. In the “Textiles,

Apparel & Luxury Goods Industry”, adidas AG was rated as industry leader in sustainability issues and corporate responsibility for the tenth time.

The indices serve as benchmarks for investors who integrate sustainability considerations into their portfolios, and provide an effective engagement platform for companies who want to

adopt sustainable best practices.

The annual review of the DJSI family is based on a thorough analysis of corporate economic, environmental and social performance, assessing issues such as corporate governance, risk management, branding, climate change mitigation, supply chain standards and labour

practices.

More information can be found at Dow Jones Sustainability Indexes.

2013 - ADIDAS AG AGAIN INCLUDED IN THE STOXX® GLOBAL ESG LEADERS INDEXES

As of September 2013, adidas AG is once again included in the STOXX® Global ESG

Leaders indexes. The index family is made up of three specialized indices for the categories environmental, social and governance, and one broad index which sums up the specialized indexes. These indexes are: STOXX® Global ESG Environmental Leaders, STOXX®

Global ESG Social Leaders, STOXX® Global ESG Governance Leaders and STOXX® Global ESG Leaders.

The index family is based on relevant key performance indicators (KPIs) provided by the index partner Sustainalytics, a leading global provider of ESG research and analysis. More information about STOXX.

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2013 - CONTINUED INCLUSION IN THE FTSE4GOOD INDEX

In 2013, the adidas Group was again included in the FTSE4Good Index, which selects companies that demonstrate ongoing commitment to environmental sustainability, strong financial performance, a positive relationship with stakeholders and dedication to upholding

and supporting human rights.

FTSE Group confirms that adidas AG has been independently assessed according to the FTSE4Good criteria, and has satisfied the requirements to become a constituent of the FTSE4Good Index Series. Created by the global index company FTSE Group, FTSE4Good is

an equity index series that is designed to facilitate investment in companies that meet globally recognized corporate responsibility standards. Companies in the FTSE4Good Index Series

have met stringent environmental, social and governance criteria, and are positioned to capitalize on the benefits of responsible business practice. More information on FTSE4Good.

2013 – RECONFIRMED INCLUSION IN THE ETHIBEL PIONEER AND ETHIBEL EXCELLENCE INVESTMENT REGISTERS

Adidas AG has been selected for inclusion in the Ethibel PIONEER and Ethibel

EXCELLENCE Investment Registers since June 20, 2013. This selection by Forum ETHIBEL (www.forumethibel.org) indicates that the company can be rated as a sector

leader in terms of Corporate Social Responsibility (CSR).

2012 - INCLUSION IN THE CARBON DISCLOSURE LEADERSHIP INDEX FOR GERMANY, AUSTRIA AND SWITZERLAND

Every year, they report their CO2 emissions, their reduction targets and strategies to achieve these targets, via CDP, which is an independent not-for-profit organization that holds the

largest collection globally of self-reported climate change data. In 2012, they improved their scores considerably from 64C to 91B, and are therefore listed in the Carbon Disclosure

Leadership Index for Germany, Austria and Switzerland for 2012. On a voluntary basis, CDP requests information on CO2 emissions, reduction targets, risks

and opportunities of climate change from the world’s largest companies on behalf of 722 institutional investor signatories. The information provided is evaluated and published by

CDP to increase transparency around climate-related investment risk and commercial opportunity, and to drive investments towards a low-carbon economy.

More information can be found at CDP.

INCLUSION IN THE VIGEO GROUP INDEXES

Adidas AG is included in the Vigeo Group Indexes – the Euronext Vigeo Indexes (Euronext

Vigeo Eurozone 120, Euronext Vigeo Europe 120 and Euronext Vigeo World 120) as well as the Ethibel Sustainability Indexes Excellence Europe & Global. The Euronext Indexes are released in partnership with Euronext and are composed of companies with the most

advanced performance in corporate responsibility. The Ethibel indexes consist of companies that meet financial and sustainability criteria established by the independent organization

forum Ethibel.

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The Vigeo Group measures companies' performance in the field of sustainable development and social responsibility to supply this information to asset managers.

More information on the Vigeo Group.

INCLUSION IN THE ECPI® INDICES

Since December 2009, adidas AG has been included in the ECPI® Indices.

ECPI is dedicated to environmental, social and governance (ESG) research and index development, calculation and publication. ECPI offers a wide range of ESG indices built using its proprietary ESG

Rating Methodology (positive screening) and controversial sector exclusion (negative screening).

More information about ECPI.

2011 – SILVER MEDAL FOR ADIDAS AG AS 'SUSTAINABLE RETAIL COMPANY 2011'

As part of a project called "Sustainable Retail Company 2011", the VERBRAUCHER

INITIATIVE e.V. (a federal consumer association) awarded the adidas Group the silver medal.

The project, which was supported by the Federal Environment Ministry and the Federal Environment Agency, assessed the social and environmental activities of the retail business

in a comprehensive and cross-sectorial way. The survey (developed by Öko-Institut e.V.) included industry-specific questions related to the sustainable engagement of companies

along their supply chain, from the production of raw materials to transport and waste disposal.

Further information is available at www.nachhaltig-einkaufen.de (in German only).

2009 - BEST RATING BY EUROPEAN CONSUMER ORGANISATIONS

In a running shoe test by nine leading European consumer organizations, the adidas Group

was rated first for managing corporate responsibility issues. Under the leadership of the International Consumer Research & Testing (ICRT) organization, nine European consumer organizations – including the German consumer organization STIFTUNG WARENTEST –

carried out a comprehensive research project into the social and environmental production context of running shoes from different brands, including adidas and Reebok.

the excellent rating of the adidas Group related to labour, health, safety and environmental conditions in the manufacturing process is the result of an in-depth evaluation by ICRT and the independent monitoring organization ENGAGED which reveals the consistent

performance of the adidas Group and its suppliers.

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2008 – RE-ACCREDITATION OF THE ADIDAS GROUP'S MONITORING PROGRAMME BY THE FAIR LABOR ASSOCIATION

In 1999, the adidas Group joined the Fair Labor Association (FLA), a non-profit multi-

stakeholder coalition of private corporations, non-governmental organizations and universities. As a member, the adidas Group is subject to external monitoring by independent

monitors, participation in the FLA third-party complaint system and public reporting. In 2005, their monitoring programme was among the first to receive FLA accreditation. The

accreditation signifies that they are in substantial compliance with FLA requirements to implement a rigorous workplace code of conduct in factories making their products. Re-

accredited in October 2008, the Group’s next accreditation is planned for 2013. More information about the FLA.

2007 – B.A.U.M. ENVIRONMENTAL AWARD 2007 FOR FRANK HENKE, SOCIAL & ENVIRONMENTAL AFFAIRS, ADIDAS GROUP

In June 2007, Frank Henke received a B.A.U.M. Environmental Award on behalf of the adidas Group. His personal contribution and adidas’ commitment to improve the social and

environmental conditions in its international supply chain were given special mention. The award is granted only to citizens who have been working extensively towards better

environmental protection and who deal with social issues and sustainable development. B.A.U.M. was founded in 1984 by a group of German entrepreneurs who wanted to support

each other in implementing environmental management within their companies. Since then, more than 500 companies as well as non-profit organizations, institutions and individuals

have become members of B.A.U.M. Today B.A.U.M. is the European business community's largest environmental initiative.

For further information visit www.baum-umweltpreis.de.

2006 – PRODUCT RATED BEST FOR QUALITY AND CSR BY STIFTUNG WARENTEST

Before the 2006 FIFA World Cup™ in Germany, the adidas +Teamgeist match ball obtained

the best rating of all ball products tested by the German consumer organization STIFTUNG WARENTEST. Their +Teamgeist match ball was chosen not only for its functionality,

quality and material safety but also for the suppliers’ working conditions and the overall CSR (Corporate Social Responsibility) performance of the adidas Group.

STIFTUNG WARENTEST has been assessing the social and environmental performance of companies in product manufacturing since 2004. During the evaluation process they provided

detailed CSR information about the Group’s social and environmental programs and initiatives, the products and the supplier sites. Part of the rating approach was the external validation and verification of information they submitted. Verification audits were conducted

at the two supplier sites in Thailand and Pakistan, following a verification visit to their Headquarters in Herzogenaurach, Germany.

More information about STIFTUNG WARENTEST.

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2006 – ADIDAS GROUP AMONG TOP EMPLOYERS OF THE YEAR

The adidas Group is voted one of the Top Employers in Germany by "karriere" magazine.

The overall ranking, which was conducted by the Corporate Research Foundation, listed adidas AG as number six in the list of Top Employers in Germany. In the category "Job

Security", adidas AG came second; in the category "Market Leader", adidas ranked third. Also in 2006, they ranked second in a list of the 100 most attractive employers for business

students according to “The European Student Barometer”, a survey of university students across 14 European countries.

2005 – ENVIRONMENTAL MANAGER OF THE YEAR

The World Wide Fund for Nature Germany (WWF) and German business magazine Capital named adidas Group’s CEO Herbert Hainer "Ökomanager des Jahres" (Environmental Manager of the Year). The jury valued the company’s efforts in improving the ecological and

social conditions in the factories producing its products.

2002/2004 – BEST SUSTAINABILITY REPORTING

The German Chamber of Public Accountants awarded the "Best sustainability

reporting" prize to the adidas Group for its 2002 and 2004 social and environmental reports. The jury especially emphasized the consistently high quality of the sustainability reports and the proactive management of specific issues.

ADIDAS Six Forces Analysis Rivalries:

Adidas largest rival is sporting apparel giant Nike, which controls over 33% of the Worldwide market for athletic shoes, a large but surmountable lead against adidas. In addition, 6 other much smaller rivals in the United States and Europe include Puma, Asics, and New

Balance. In China, adidas faces competition from Li Ning, China’s biggest athletic shoe Manufacturer. All these companies hope to eke out a piece of the market from adidas but with a more focused strategy adidas can easily counter its rivals, large and small.

Substitutes:

Substitutes for adidas products come from rival manufacturers such as Nike, Puma, Asics,

And New Balance. The price differential between manufacturers is not big and consumers can Easily change from one product to another. As athletic footwear is many times a premium Product, consumers are willing to spend more money with the belief that they can get a higher

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Quality and more durable shoe capable of handling different playing conditions . So, consumers Are looking to buy quality and value. In addition to large rivals, substitutes for adidas’ products Especially in the apparel market come from smaller and more localized companies around the world. Almost 75% of the global athletic apparel market and 18% of the global footwear market belongs to local apparel manufacturers such as China’s Li Ning.

New Entrants:

Typical entry barriers for new companies in the sporting apparel and footwear industry

Are high due to the large economies of scale needed for manufacturing, distribution, research and development, and other operations. Entering the apparel and footwear

business requires initial capital investments in order to acquire land, build factories, and develop new product. Furthermore, developing and selling highly innovative products

requires large marketing and advertising costs that make the barriers to entry even steeper.

In addition, as consumers are looking to purchase premium products, manufacturers must carry strong reputations that take several years to develop and in the meantime, consumers

will tend towards manufacturers with already strong brand names.

Customers bargaining power:

Customers carry large bargaining power as they can always threaten to buy rival Products. Switching costs are typically very low and many due switch to a rival’s products if the rival offered trendier or hotter products or if the rival’s reputation for footwear in a specific sport (e.g. soccer) is very high. Large selection among several brand names, in addition to large price variations, allow consumers to choose shoes suited to their preferences in design, comfortability, and price. The lack of complements also increases buyer bargaining power as the buyer is never locked to a specific product.

Suppliers bargaining power: The suppliers’ bargaining power is high as well, since adidas makes contracts with Famous athletes or teams (such as Chelsea FC, Liverpool FC, NY Giants, LA Lakers, David Beckham), to promote and advertise its products. But famous teams and athletes most of

the times dictate the terms of the contract thus increasing the suppliers bargaining power. Moreover there is great competition observed to sign contracts with famous sporting events

(Olympic Games, NBA, FIFA World cup and Eurocup), which is a fact that makes supplier’s bargaining power bigger. If they can choose among several competitors they can easily

threaten to pick the one with the best offer.

Complements: Currently, adidas partners with Samsung in producing a shoe plus a phone scheme that Uses wireless biometrics to display information on an adidas-branded Samsung phone. In

Addition, packaging shoes with other products, such as apparel, eyewear, basketballs or golf Clubs creates another complement for adidas. Moreover, selling different products which

are signed by its contracted athletes or teams create another complement. Technology used

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in apparel such as Climacool) also creates a complement, making consumers buy adidas Climacool products.

ADIDAS GLOBAL SALES

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Adidas enjoys second position in World global sales

SWOT & TOWS ANALYSIS OF ADIDAS

SWOT Analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses,

Opportunities, and Threats inside a company. It identifies the internal and external

factors that are favorable or unfavorable for business.

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SWOT ANALYSIS OF ADIDAS

Opportunities •Change in consumer lifestyles •Available technological innovations •Entering new markets •Expand customer base •Expand product/service lines •Market Diversification •Merger or ACQUISITION

Threats cut throat competition from rival apparel

brand demand forecast for hot market item

•Competition from foreign markets •Competitor's actions •Change in consumer lifestyles\patterns •Growing power of customers to set the price •Growing power of suppliers to set the price •Financial slowdown •Increase in taxation •New competitors entering the market •Price war between competitors

Strengths •Good financial position •Effective Marketing Strategy •Market Leadership •Strong online presence •Strong brand •Strong international operations •Strong distribution chain

• Competitive pricing

Weakness • High cost structure • Over pricing • Low quality products/services • Limited product line

Online customer service not helpful

TOWS

External opportunities External Threat

Internal Strength

Bring in innovative products

Expand distribution line

Being the market leader it can get into Merger or acquisition.

Meet competition with advanced technology

Establishing strong brand image to avoid cut throat competition

Expand with the change in growth of customers

Internal weakness

• Develop products with different price levels

• Build strong online service

• Reduce competition by developing flexible product line

• Fluctuation in price and hire pricing can be avoided

• Quality products equal to competitors can be manufactured

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CONCLUSION

IN VIEW OF THE FOLLOWING DATA ADIDAS IS ONE OF THE MANUFACTURING SECTOR WHO NEED TO PRODUCE MORE OUTPUT BY IMPLEMENTING NEW TECHNOLOGIES, NEW TARIFFS, AND NEW CONSUMER SATISFACTION VALUE ADDED SERVICES. FURTHER, IT IS STILL THE LARGEST MANUFACTURER IN THE

WORLD IN TERMS OF GEOGRAPHIC REACH & QUALITY.

RECOMMENDATIONS:

• THEY SHOULD ENCOURAGE NEW PRODUCTS.

• BRING INNOVATIONS IN THE EXISTING PRODUCTS.

• THEY SHOULD CONDUCT MORE SURVEYS IN ORDER TO KNOW ABOUT CUSTOMER SATISFACTIONLEVEL.

• EASY ACCESS FOR COMMUNICATION SHOULD BE PROVIDED IN THE RURAL AREAS.

SUGGESTED STRATEGIES:

• Market Development

• Market Penetration

• Product Development

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REFERENCES

Adidas official site (www.adidas.com.en)

Wikipedia (www.wikipedia.com)

Slideshare (www.slideshare.com)