Assignment Sample on Leading Through Digital Disruption
Task 1: Change analysis and opportunities
Organisational introduction
Figure 1: Global Distribution of Net Sales for Adidas
(Source: Tighe, 2022)
Adidas is a major player of global retail industry with selling products such as sports equipment, clothing with sports shoes being the most popular brand. As per statistical surveys, Adidas has an overall of 37% distributions regarding net sales in EMEA countries such as Europe, middle east and Africa (Tighe, 2022). This is helpful to make Adidas as one of the major global players to enhance sales revenue of retail products especially related to sports shoes and wears. In 2019, Adidas had an overall 2533 number of outlets in different parts of the world that was decreased to 2185 stores in 2020 (Tighe, 2022). This number changed a bit with possessing 2184 stores around the world just after negative impacts of COVID-19 pandemic. Adidas distributes its products through “own-branded shoes”, “wholesale shoes”, “retail shoes”, “sporting goods chains” and “franchise stores” (GLOBALDATA, 2022). An overall of 60,661 number of employees are working in this organisation and helping to increase net revenue for this company. 25.1 billion USD was recorded to be total revenue of Adidas in 2022 with a 326.1% increase in net profit margins after COVID-19 pandemic (GLOBALDATA, 2022). Due to these numbers, Adidas is a leading retail organisation, not just in UK but all over the world.
Areas of organisation impacted by digital disruption
Figure 2: Group Worldwide Sales of Adidas
(Source: Tighe, 2022)
Adidas is a global organisation which produces footwear, sunglasses, bags and different fitness equipment with an increased customer base. According to statistical reports, group sales of Adidas was 23,640 million Euros in 2019 which decreased in 2020 with reaching 18,435 million Euros (Tighe, 2022). However, sales were further increased in 2021 with reaching 21,234 million Euros which is still lesser than pre-covid times. According to Thukral (2021), COVID-19 pandemic led to business disruptions because of successive lockdowns and enforcement of social distance norms ruled by different country based governments. Due to this issue, supply chain problems and sales of products successively decreased for Adidas which is evident (Figure 2) in terms of worldwide sales in 2020. Furthermore, during industry 4.0, there are an increased number of technologies being used by people which is leading to change in consumer demands (Kurt, 2019). Customers are expecting more online product availability rather than offline and traditional buying experience. Due to these issues, there are threats to decrease sales and revenue for Adidas in near future.
Opportunities to receive with a successful digital transformation
A successful digital transformation has a potential to increase sales because of better customer experience and data driven decision making. Sahija (2021) asserted that digital transformations such as using “Machine Learning”, “Artificial Intelligence” or “Augmented Realities” are effective to automate business management. For instance, using technological developments Adidas would be able to enhance its sales with applications such as 3D printing and online product deliveries. This resulted in more customers buying scenarios of these sports shoes and clothing from this company which would further be effective to improve sales and market shares. Ubiparipovićet al. (2020) noted that digital business agility such as hyperawareness are advantageous to remain active in knowing about other competitors with data driven decision making activities such as predictive analytics. Hence, using business agility models followed by technological developments, Adidas would be able to regain its business profit which was lost during COVID-19.
Task 2: Digital business agility
Hyperawareness
Hyperawareness is a highlighting factor of an ability which detects and monitors changes in business environments. According to Mercanet al. (2021), hyperawareness helps to receive benefits of knowing the competitors and thereby changing business operations to retain profits and customers. Choosing hyperawareness would be advantageous for Adidas to know better about its competitors such as Nike and Puma in global retail industries. Thus, better and sound monitoring changes in business environments and customer demands, Adidas would be able to make better customer retention.
Making informed decisions
Making an informed decision refers to gathering relevant information about a problem domain to solve it with improved effectiveness and reaching to an optimal solution. Jöhnket al. (2021) noticed that informed decision making provides a continued organisational growth with a better and advanced knowledge about innovations. Adidas would be able to enhance its decision making with better communications with customers that would increase new business opportunities. In this case, adoption of Machine Learning would be effective to create a better data analysis platform and predictive analysis to achieve an informed decision making process.
Executing fast
Executing fast or speed of execution refers to improving facts such as opportunities, responsiveness and speedy internal mobilisation process. As inferred from the study by Madhani (2020), faster execution leads to a better organisational throughput that is effective to provide faster delivery to customers with increased customer satisfaction. In case of Adidas, faster execution of business and production processes would be beneficial to enhance the customer base with better market share.
Selection of a component
According to digital business agility models, choosing hyperawareness would be most effective for Adidas with receiving quality knowledge about business competitors. As asserted by Udovita (2020), a better decision making would be possible by choosing to use hyperawareness in digital business agility models. Hence, Adidas would be able to increase both online and offline product selling process especially in UK with a selection of hyperawareness.
Machine Learning
Machine Learning reflects a development of computer systems that are able to learn and adapt to sudden changes without a specific requirement of explicit human instructions. Statistical and complex self-learning algorithms are used to analyse previous datasets and making an outcome of predictive decision making are generally done by machine learning algorithms (Eloranta and Boman, 2022). Using Machine Learning algorithmic models, Adidas would be able to optimise product searching techniques in its official websites and online selling platforms. Digital modifications and innovations such as cyber security and robotics would further be developed by Adidas because of using Machine Learning tools and algorithms.
Internet of Things
Internet of Things (IoT) describes physical objects such as sensors and software with using a basic model of Client Server Architecture using networks and active internet connections. Khan et al. (2020) asserted that reduced costs and operational efficiencies are the major benefits of IoT in manufacturing business. Internet of Things has a further benefit of improving customer experiences with smoother offline services and fast product delivery experiences. In case of Adidas, applications of Internet of Things would bring better revenues due to enhancement of active manufacturing capabilities with robotics. Internet of Things has a further potential to be used as programmed chips that possess a similar capability of a computer. This would be enhancing business operations management for Adidas with a better and automated supply chain management.
Artificial Intelligence
Artificial Intelligence (AI) is a simulating platform of human intelligence using high-end machines such as computers and standard laptops. According to Sharma et al. (2022), Artificial intelligence provides a 360-degree view to companies related to plants, lines, warehouses and supply chains. A cheaper and faster process of production and supply chains with active robots are possible to be designed with applications of AI in business platforms. Adidas would be able to automate its stores using AI tools that would be beneficial for this company to receive a better customer base with customer attractions. Hence, this company would be obtaining an advanced market share with a successful digital innovation process such as AI development.
Augmented Reality
Augmented Reality (AR) is a platform for creating a superimposed image and live experience of customers and users by taking a view from the real world. As per the views of Angelopoulos and Mourtzis (2022), Augmented Reality has a potential to improve the quality of production process with a minimal workforce. Furthermore, AR is able to automate manual business activities to achieve increased perfection in terms of product design and quality. Adidas would be able to receive better productivity and throughput because of using AR in business operations management.
Selection of a technology
Artificial Intelligence would be effective for making business innovations of Adidas and this would lead to an increased customer base just after the COVID-19 pandemic. It has been found that Adidas started to use AI to improve its 3D printing capabilities to boost sales during COVID-19 pandemic (Nagarajan, 2020). Therefore, an addictive manufacturing process of sports shoes has already been started by this company and this has the potential to make a further improvement. Improvement of 3D printing to 4D printing in case of shoe manufacturing, would be possible for Adidas to boost sales after negative impacts of COVID-19 pandemic. Due to this fact, Artificial Intelligence would be more appropriate for Adidas to create a digital ready culture in retail industry.
Task 3: Creating a digital ready culture
Putting customers first
Putting customers first is an effective aspect to grow a business by understanding customer needs about organisational products and services. Shanahan et al. (2019) noted that creating distinctive value for customers is required to build deeper relationships with customers that enhances brand awareness of organisations. Hence, customer feedback and inclusive practices with customers are beneficial to maintain a better productivity with an advanced product quality. A global beta program was arranged by Adidas with 200 global customers that is effective for customer engagement process (ADIDAS-GROUP, 2019). As per consumer demands, Adidas is manufacturing recycled shoes which are still remaining 100% recyclable and this is being effective to enhance customer demands. In this approach, Adidas has continued to play as a major player of global retail sector with meeting consumer demands and putting consumer choices first.
Creating a collaborative culture
Creation of collaborative culture is necessary to improve business operations management and creating a digital ready culture with proper training and developments. As observed by Nikolovaet al. (2019), a collaborative environment in a business helps to boost employee engagement with expansion of skills and learning. Apart from these, a collaborative culture in business environment helps to create a more efficient operations management with greater employee motivation that leads to better productivity and quality. Adidas has an optimistic team setup that enables this company to work on its productivity and quality with successful team efforts. This company inspires its team members to improve their skills with training and development schemas. Bonus programs, short-term incentives, long-term incentives, stock purchase plans and attractive retirement plans are continued to be offered by Adidas to improve team motivations (ADIDAS-GROUP, 2020). Adidas company further provides attractive pension schemes for retired employees to boost productivity and quality of manufactured products. A continuous improvement of remuneration approach is being effective to maintain a collaborative and positive workforce culture in operations management.
Instilling a culture of innovation
Culture of innovation is an aspect which is required to make an advanced and developed workforce to design a technologically advanced workplace. According to Nayalet al. (2022), a culture of innovation has the potential to embrace a culture of upskilling that is required to adapt to a change in consumer demands and market positions. A culture of innovation further refers to generating a better feedback friendly business that leads to an increased customer satisfaction. Adidas is working its workforce with hiring more young people and its goal is to achieve 75% of the workforce aged between 18 to 34 by 2025 (ADIDAS-GROUP, 2023). A better focus on Genz would be possible for this workforce changing activities that would be bringing more customers to Adidas. Furthermore, this company is focusing on different activities such as quality material, energy, warehousing, logistics and labour force to make a better organisational culture with advanced productivity.
Becoming a digital-champion
Digital champion refers to being adapted to changing market demands by using technological aspects and promoting more about benefits of technological tools and softwares. As asserted by Yassa (2019), smooth onboarding of technologies is referred to as a digital-champion business in industry 4.0. In this context, Adidas is continuing to be increasing financial investments in technological domains to become a digital-champion. Adidas has invested more than 1 billion Euros for technological development for receiving a better production rate with quality profits (Mixson, 2022). In 2021 alone, this company hired more than 1000 talented employees possessing skills of technologies and deployment of SAP and AWS software are also considered. Apart from these, S/4HANA would be fully integrated with AWS and applications of these would bring a better supply chain process. Blockchain technology is also being adapted by Adidas to enhance data safety by reductions of cyber-crimes and data breaching.
Task 4: Developing digital leadership
Goleman’s leadership styles
Leadership is an effective aspect for conducting digital changes in organisations and according to Goleman there are six different styles of leadership. Affiliative leadership style would be most appropriate for Adidas to lead towards a digital change after negative impacts of COVID-19 especially in terms of sales. Benefits of affiliative leadership style include an ability to create quality teamwork with strong and cohesive teams with collaborative environments (Riivariet al. 2021). Due to this application, Adidas would be able to make successful changes in its operations management and thus leading to enhanced productivity. Employee morale enhancement with receiving employee trusts are another two advantages of affiliative leadership style which would be effective for Adidas to improve production quality. As noted by Van Vugt and Smith (2019), conflict resolving process is a major benefit of imposing affiliative leadership style in operations management. Adidas would be able to improve working environment that would further be supportive for digital transformation process. Hence, reduction of workplace stress would be taking place and that would ensure enhanced share equity for Adidas products.
Grow Model
GROW model is a framework to receive realistic and achievable goals related to customer satisfaction with enhanced and improved organisational services. Adidas is trying to achieve a digital leadership practice that would be ensuring upskilling employees with technologically innovative measurements. As identified by Alam (2022), a major resource for adapting with Artificial Intelligence is related to high-end computers and costly AI algorithms that is a concern for companies. Due to maintaining this goal, Adidas is hiring more technically sound employees which would be effective to process and maintain complex algorithms and their working principles. Providing more investments in technological aspects is a proper idea to achieve technological development in operations management (Li et al. 2021). After making financial investments in technological developments, upskilling of existing workforce is mandatory for Adidas to cope with advanced technologies such as AI and 3D printing. However, adoption with AI would be a concerning factor because of multiple cybercrime attempts made by hackers’ trackers in industry 4.0. Hence, this technological upgradation is required to be done by experts of Computer Sciences and IT specialists. Due to achieving this goal, Adidas is continuing to hire more technological specialists as found from this study.
References
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