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 Introduction

This report provides an in-depth analysis of the digital transformation strategy for

Adidas, a leading global sportswear company. It evaluates the impacts of digital disruption on

Adidas and outlines key opportunities for the CIO to drive digital transformation. The report then

offers recommendations for Adidas to gain digital business agility leveraging emerging

technologies across areas like customer insights, supply chain, and innovation. Creating a digital-

ready organizational culture is discussed along with approaches for customer-centricity,

collaboration, innovation and digital leadership.

Task 1: Change Analysis and Opportunities

a. Introduction of Organization

Adidas is a German athletic footwear and apparel corporation. Its headquarters are

located in Germany. It is a multinational company that designs and produces athletic apparel,

footwear, and accessories. Adidas, which was founded and has its headquarters in Germany, is

the largest active wear manufacturer in Europe and the second largest in the world, behind Nike

(Iglesias et al., 2020). As of the year 2020, Adidas has over 62,285 employees worldwide and

generates approximately €21.5 billion in annual revenue. Alongside significant competitors like

Nike, Puma, and Under Armor, the company operates in the competitive athletic apparel and

footwear industry.

The primary products of Adidas consist of performance sportswear, casual lifestyle

apparel, and athletic footwear for sports such as football, basketball, and running. Adidas

Originals for fashion and subculture, Reebok fitness apparel, and Five Ten outdoor extreme

sports shoes are some of its main brands and subsidiary companies. The company's products are

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sold through the wholesale and consumer-direct channels. Large format retailers, specialized

sports stores, and online retailers are its wholesale partners. The company operates brand stores

and e-commerce platforms as part of its direct-to-consumer channel (Iglesias et al., 2020). In

terms of geographic presence, North America, Europe, Russia, China, and Latin America

account for the majority of Adidas' sales. North America, Greater China, and Europe are key

markets. The company's global supply chain includes Asian and European manufacturing

facilities.

b. Impact of digital disruption on 3 areas of organization

Numerous aspects of organizations like Adidas have been significantly impacted by digital

disruption. Here are three critical areas where digital disruption is impacting Adidas, a global

sportswear company:

Retail and E-commerce approach: Digital disruption has reshaped the retail landscape,

modifying consumer purchasing habits. Adidas has witnessed a shift towards online purchasing

and e-commerce platforms, which are gaining in popularity among consumers. This has

disrupted the traditional brick-and-mortar retail model, posing a challenge for Adidas as

consumer preferences evolve. Adidas invested significantly in its e-commerce capabilities as a

response to this digital disruption. The company has redesigned its online store and mobile app,

augmenting the consumer experience with personalization, product recommendations, and

straightforward online ordering. Adidas has also partnered with prominent e-commerce

platforms such as Amazon to expand its digital reach (Rosenstand et al., 2018). Optimizing the

balance between online and offline retail still presents obstacles, including inventory

management, consumer engagement, and the creation of a seamless omni-channel experience.

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Supply Chain Management and Manufacturing: Through the adoption of technologies like

the Internet of Things (IoT), data analytics, and automation, digital disruption has revolutionized

supply chain and manufacturing processes. These technologies have enabled Adidas to improve

the efficacy of its supply chain, from the procurement of raw materials to the manufacturing and

distribution of its products. However, they have also introduced new challenges, such as the

requirement for cybersecurity measures to safeguard sensitive data. Adidas has adopted digital

technologies to optimize its manufacturing and supply chain operations (Schwetner, 2017).

Utilizing IoT sensors and data analytics, the company monitors inventory levels, tracks product

movement, and accurately forecasts demand. Integration of automation and robotics into

manufacturing processes has increased efficiency and decreased production time. While these

innovations have made Adidas more agile and responsive to market demands, the company must

continue to invest in cybersecurity and data privacy to mitigate the risks associated with digital

disruption.

Marketing and Customer Interaction: The impact of digital disruption on marketing and

consumer engagement strategies has been profound. Digital marketing platforms, social media,

and influencer marketing have either supplemented or replaced traditional advertising channels

such as print and television. Through social media, reviews, and online communities, customers

now have a greater voice, influencing brand perception and purchasing decisions. Adidas has

employed a digital-first marketing strategy, connecting with its target audience via social media

platforms such as Instagram, Twitter, and YouTube (Somro et al., 2020). To reach a larger

consumer base, the company partners with influencers and athletes. In addition, Adidas employs

data analytics to obtain insights into customer behaviour and preferences, enabling it to create

more targeted marketing campaigns. Adidas must continue to respond to evolving digital

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marketing trends and remain receptive to consumer feedback in order to maintain its competitive

advantage.

c. Opportunities for CIO

To successfully digitally transform an organization like Adidas, the Chief Information

Officer (CIO) plays a pivotal role in identifying and capitalizing on key opportunities. Here are

several opportunities that the CIO can leverage to drive successful digital transformation at

Adidas:

Data Insights and Analytics: Utilize the power of data analytics and artificial intelligence (AI)

to obtain a deeper understanding of customer behaviour, market trends, and product

performance. Utilize data-driven decision making to enhance consumer experiences, inventory

management, and marketing strategies. Additionally, the company should invest in sophisticated

analytics tools and platforms, assemble a data analytics team, and establish a data-driven

organizational culture. Implement AI and machine learning algorithms to forecast demand,

optimize supply chain operations, and customize marketing initiatives (Frenkel and Scott, 2002).

E-commerce Improvement: Continue to extend the e-commerce business by enhancing the

online purchasing experience, expanding digital product offerings, and optimizing the check-out

process. In the digital era, e-commerce is a crucial channel for reaching customers. In addition,

the company should invest in user-friendly e-commerce platforms, implement features such as

virtual try-ons, and investigate emergent technologies such as augmented reality (AR) for

improved product visualization. Utilize data analytics to provide individualized product

suggestions and promotions.

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Sustainability Initiatives: Digital transformation can support sustainability objectives by

optimizing supply chains, minimizing waste, and reducing environmental impact. Adidas should

acquire technologies with a concentration on sustainability, including blockchain for supply

chain transparency and IoT sensors for resource optimization. Transparently inform customers of

your sustainability efforts, as eco-conscious consumers increasingly influence purchasing

decisions (Schwertner, 2017).

Innovation and Partnerships in Digital: Stay at the vanguard of digital innovation by

collaborating with startups, technology partners, and innovation centers. Explore emerging

technologies such as 3D printing and virtual reality for customized products and immersive

purchasing experiences respectively. Establish partnerships with tech incubators or accelerators,

invest in in-house innovation laboratories, and monitor industry trends and startups for possible

collaboration opportunities.

Cybersecurity and data confidentiality: As digital transformation expands, it is impossible to

exaggerate the significance of cybersecurity and data privacy. Protecting consumer data and

preserving their trust are crucial. Invest in comprehensive cybersecurity measures, undertake

regular vulnerability assessments, and comply with data protection regulations such as GDPR

(Somro et al., 2020). Develop a comprehensive cybersecurity strategy and provide training to

employees to mitigate risks effectively.

Task 2: Digital Business Agility

Here are some recommendations on how Adidas can leverage digital technologies to gain

business agility across the three components of the Digital Business Agility Model:

Hyperawareness

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  Implement Internet of Things sensors in stores to monitor customer behavior and gather

data on in-store traffic patterns, product interactions, and checkout conversions. This

provides real-time insights into shifting consumer preferences.

 Use machine learning algorithms to analyze social media conversations and online

reviews related to Adidas products. This can identify emerging trends, customer

sentiment, and changes in brand perception.

 Leverage artificial intelligence powered visual recognition in digital campaigns to

evaluate customer engagement and reaction. This gives rapid feedback on the

effectiveness of marketing content (Berman, 2012).

 Conduct virtual focus groups and augmented reality surveys to get direct customer input

on new product concepts and designs. This tests ideas and gathers insights before

committing resources.

Make Informed Decisions

 Create a data analytics platform that consolidates data from various sources across the

value chain. Use dashboard reporting to generate insights and support data-driven

decision making.

 Implement predictive analytics and machine learning to forecast market demand more

accurately. This allows for data-backed decisions on inventory, manufacturing, and

resource planning (Iglesias et al., 2020)

 Use optimization algorithms and scenario modeling to rapidly evaluate multiple decision

variables and simulate different options. This enables fact-based choices that balance

trade-offs.

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Fast Execution

 Digitize fundamental processes such as design, manufacturing, and fulfilment to enhance

speed and adaptability. Simulations of digital twins and other emerging technologies can

accelerate prototyping and testing.

 Leverage cloud computing and platforms to rapidly upscale operations and computing

capacity in response to fluctuating market demands. This expedites the ability to respond

to variations in demand (Somro et al., 2020).

 Implement modular architecture and micro-services to reconfigure operations and

implement new business models rapidly. This allows for flexible systems and agile

delivery.

 Utilize virtual collaboration tools and digital workspaces to link cross-functional teams

with external partners. This allows for rapid iterations and concurrent execution.

Task 3: Creating a Digital Ready Culture

For digital transformation to be successful, Adidas, or any organization, must develop a digital-

ready culture. To accomplish this, it is essential to prioritize the following four factors: placing

consumers first, fostering collaboration, fostering innovation, and becoming a digital leader.

Here is a comprehensive strategy for each of these aspects:

I. Putting Customers First:

 Instill a customer-centric mentality throughout the entire organization. Customers should

be the focal point of every business decision and strategy.

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  Thoroughly comprehend the customer journey, identifying difficulty points and digital

enhancement opportunities. Utilize data analytics and customer input to guide this

procedure (Turner et al., 2018).

 Utilize data and AI to customize the customer experience. Utilize customer data to

suggest products, customize marketing messages, and provide customized purchasing

experiences.

 Develop feedback loops that directly involve customers in product development and

enhancement. Conduct surveys, collect customer feedback, and pay close attention to

customer complaints and suggestions.

II. Creating a Collaborative Culture:

 Assemble cross-departmental teams (e.g., marketing, IT, design, and sales) to execute

digital initiatives. This promotes diverse viewpoints and expertise.

 Promote channels of communication in which employees feel at ease discussing digital

transformation-related ideas, feedback, and concerns. Utilize resources such as electronic

suggestion receptacles and regular town hall meetings.

 Encourage the sharing of knowledge through internal seminars, training sessions, and

mentoring programs. Promote a culture of growth and learning.

 To facilitate remote work and cross-team collaboration, implement collaboration tools

such as project management software, communication platforms, and cloud-based

document sharing (Westerman et al., 2019).

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III. Instilling a culture of innovation

 Establish dedicated innovation hubs or spaces where employees can freely experiment

with new technologies and ideas. Encourage exploration and prototyping without fear of

failure.

 Organize frequent innovation challenges or hackathons to inspire employees to think

creatively and devise digital solutions for existing challenges.

 Acknowledge and reward innovative ideas and efforts. Develop a system that recognizes

employees who contribute to digital innovation.

 Collaborate with external innovation partners, startups, or academic institutions to infuse

the organization with fresh perspectives and cutting-edge technologies (Berman, 2012).

IV. Becoming a digital champion

 Ensure that senior leadership is entirely committed to digital transformation and leads by

example. They should engage actively with digital initiatives and set the tone for the

organization as a whole.

 Offer continuous digital training and development programs for all levels of employees.

Included are digital literacy, a comprehension of emerging technologies, and digital

strategy (Frenkel and Scott, 2002).

 Establish key performance indicators (KPIs) to evaluate the organization's digital

advancement. Assess and report on these KPIs on a regular basis to monitor the impact of

digital initiatives.

 Conduct continuous comparisons with industry leaders and digital pioneers from outside

the organization. Learn from their achievements and modify your strategies accordingly.

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 Task 4: Developing Digital Leadership

Leadership Style

The Emotional Intelligence framework developed by Daniel Goleman describes six

distinct leadership styles: visionary, counselling, affiliation, democratic, pacesetting, and

commanding. To successfully support Adidas' digital transformation, it is necessary to identify

the leadership style that can most effectively facilitate this process (Berg and Kalsen, 2016). In

the context of digital transformation, coaching is an especially advantageous leadership

approach. Adidas must cultivate this leadership approach in order to support its digital

transformation. Coaching leaders focus on enhancing their team members' skills and abilities.

They provide guidance, feedback, and assistance to help individuals realize their maximum

potential and develop (Robertson, 2016). A coaching leadership style can be highly effective in

the context of digital transformation because it encourages learning, adaptability, and continuous

improvement, which are all crucial for traversing the complex and rapidly changing digital

landscape.

Methods and strategies for developing Coaching Leadership

The GROW Model is a structured methodology for developing counselling leadership. This

model can serve as a guide for executives' interactions with team members:

 Encourage leaders to define explicit goals and objectives for digital transformation with

their teams. These objectives should be SMART (specific, measurable, attainable,

relevant, and time-bound) (Turner et al., 2018)

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  Leaders should help team members evaluate their current digital capabilities, identify

their strengths and weaknesses, and comprehend the opportunities and challenges

presented by digital transformation.

 Encourage leaders to facilitate brainstorming and problem-solving sessions with team

members in order to investigate various digital transformation strategies and methods.

Promote dialogue and creativity.

 Leaders should collaborate with team members to develop action plans, set milestones,

and track progress towards digital transformation goals. Monitoring and feedback are

required on a regular basis.

 Effective leaders in counselling practice active hearing with their team members.

Encourage leaders to engage in active listening by giving their full attention, asking

clarifying questions, and demonstrating empathy (Robertson, 2016).

 Leaders can act as mentors, guiding team members in the development of new digital

skills and knowledge. Encourage leaders to identify skill gaps and provide opportunities

for training or professional development.

 Effective coaching executives delegate tasks and responsibilities to team members,

enabling them to take ownership of digital transformation initiatives. Delegation fosters

talent development and confidence (Berg and Karlsen, 2016).

Adidas can nurture a culture of continuous learning, adaptability, and collaboration, which

are all necessary for a successful digital transformation, by cultivating a coaching leadership

style within the organization. The GROW Model and the aforementioned approaches and

techniques can serve as valuable resources to assist organization leaders in becoming effective

coaching leaders and accelerating the digital transformation journey.

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 Conclusion

This report concludes with a comprehensive digital transformation strategy for Adidas

that encompasses business agility, culture transformation, and leadership. The analysis reveals

that Adidas must develop capabilities such as data analytics, e-commerce, and cybersecurity to

be highly responsive to the effects of digital disruption. By implementing the suggested

initiatives in the areas of technology integration, customer focus, organizational collaboration,

and innovation, Adidas can achieve the digitally-ready culture and leadership necessary for

success. The report provides a clear road map for the CIO of Adidas to implement a rapid yet

sustainable digital transformation in line with the company's strategic goals.

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Berman, S.J., 2012. Digital transformation: opportunities to create new business

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Frenkel, S.J. and Scott, D., 2002. Compliance, collaboration, and codes of labor practice: The

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Iglesias, O., Ind, N. and Schultz, M., 2020. History matters: The role of history in corporate

brand strategy. Business Horizons, 63(1), pp.51-60.

Robertson, J., 2016. Coaching leadership: Building educational leadership capacity through

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