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Adidas: How to keep running fast in a post-COVID-19 world?
By the end of 2019 the Adidas Group was solidly the world’s second largest multinational in the sportswear manufacturing industry. Following the successful implementation of a digital transformation initiated in 2015, the company enjoyed years of sustained growth and high profitability in the 2016-2019 period, strengthening its brand desirability and increasing sales volumes, especially in the online space. It ended fiscal year 2019 stronger than ever and its chief executive officer (CEO), Kasper Rorsted, was very optimistic about what the future would hold.
The outbreak of the COVID-19 pandemic at the beginning of 2020 radically changed the business landscape. Adidas was severely hit by the lockdowns imposed by governments. The new measures of social distancing were expected to have a lasting impact on consumer habits and consequently on the operations of companies such as Adidas.
Thus, unimaginable only few months before, the company’s first earnings call of 2020 led by Rorsted focused on the negative results obtained in the preceding few months and the high degree of uncertainty looking forward. Aware of the many challenges facing the company, Rørsted had to decide which strategic initiatives he should prioritize to future-proof the company and keep it on a steady growth trajectory in a post-COVID-19 world.
QUESTIONS
1. Analyze three ways in which digitalization has changed the retail sector. Provide a local example to support your answer.
2. Demonstrate three ways in which the COVID-19 pandemic has revolutionized the business operations of companies such as Adidas.
3. Describe the need for a retailer’s strategy to be adjusted in view of the pandemic and the ongoing digital disruption of the retail world.
4. With the use of a local example, describe at least two ways in which the COVID-19 pandemic has affected its operations and list some strategies that can be designed to overcome these problems.
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