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 f or
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.

19
20
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
21
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
22
 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.

23
 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
24
 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.

25
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.

26
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.
27
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.

28
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

29
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

30
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

31
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.

32
 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.

33
 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

34
 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.

35
 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.

36
 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.

37
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.

38
ISO 14001 CERTIFICATION - INTERNAL COMMUNICATION
As of December 2013, the following sites of the Adidas Group have certified environmental managements systems:

Certified
Name of site Region EMS standard
since

Adidas Group Central Management for Green

GLOBAL ISO 14001 2010
Company, Herzogenaurach, Germany

Adidas Office, Portland, USA AMERICAS ISO 14001 2010

Reebok Headquarters, Canton, USA AMERICAS ISO 14001 2010

T aylorMade-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,

AMERICAS ISO 14001 2010
Canada

Adidas Group Headquarters, Herzogenaurach, Germany EMEA ISO 14001 2011

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

EMAS; ISO
Adidas Footwear Factory, Scheinfeld I, Germany EMEA 1998; 2012
14001

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

39
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.

40
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

42
 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 CO 2 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 CO 2 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.

45
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

48
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
49
in apparel such as Climacool) also creates a complement, making consumers buy adidas
Climacool products.

ADIDAS GLOBAL SALES

50
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.

51
 SWOT ANALYSIS OF ADIDAS
Strengths Weakness
•Good financial position • High cost structure
•Effective Marketing Strategy • Over pricing
•Market Leadership • Low quality products/services
•Strong online presence • Limited product line
•Strong brand  Online customer service not helpful
•Strong international operations
•Strong distribution chain
• Competitive pricing
Opportunities Threats
 cut throat competition from rival apparel
•Change in consumer lifestyles brand
•Available technological innovations  demand forecast for hot market item
•Entering new markets •Competition from foreign markets
•Expand customer base •Competitor's actions
•Expand product/service lines •Change in consumer lifestyles\patterns
•Market Diversification •Growing power of customers to set the price
•Merger or ACQUISITION •Growing power of suppliers to set the price
•Financial slowdown
•Increase in taxation
•New competitors entering the market
•Price war between competitors

External opportunities External

Threat
TOWS
 Bring in innovative products  Meet competition with
Internal  Expand distribution line advanced technology
Strength  Being the market leader it can  Establishing strong brand image
get into Merger or acquisition. to avoid cut throat competition
 Expand with the change in
growth of customers
• Develop products with different • Reduce competition by
Internal price levels developing flexible product line
weakness • Build strong online service • 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.

RECOM M ENDATIONS:

• 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)

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