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Adidas supply chain strategy

Starting with the manufacture of the first pair of sneakers in 1920, the manufacturing plant in 1927, and the clover brand in 1972, Adidas has been at the forefront of sporting goods. However, the establishment of the leading edge has to be counted from 1995 to 1996. With the launch of the new logo and the listing of the company in Paris and Franconia, Adidas has basically established the prototype of the Kingdom of Sporting Goods.
The company has business in the global market. Market Segmentation: Asia, Europe, America. The main subsidiaries of the company are all over the world and are directly or indirectly controlled by various means. They are mainly divided into Germany, the Americas, Europe, Latin America and Asia Pacific.
Through its worldwide network of affiliates, wholesalers, licensed operators and agents, ADIDAS makes products available for sale in almost every country in the world. Its branch offices spread over more than 50 countries worldwide and its products are sold in more than 160 countries and are the number one sporting goods company in the world. ADIDAS many products, the most important one is soccer shoes, more than 500 varieties produced more than 280,000 pairs each year, in more than 150 countries occupy the first place in the sales of sporting goods. ADIDAS has built a successful architecture in the marketplace, including clearly defining ownership and management, product-based management, centralized management and design and development centers in Europe and North America, setting up a regional sales subsidiary structure ; And the establishment of joint ventures with the original distributors, directly enhance the market position.

Related imageOutsourcing logistics to protect the kingdom running
If NIKE’s success is the combination of brand, marketing and logistics, Adidas’s success stems from the cost savings when the brand strategy is not very good. This is reflected in the supply chain vividly.
ADIDAS logistics strategy and NIKE is not the same. After long-term development, NIKE has established a good logistics infrastructure and uses its own logistics system. After cost accounting, ADIDAS prefers to outsource its logistics operations in order to reduce operating costs.
As early as the mid-1996, ADIDAS paid more attention to controlling logistics costs without affecting its service to customers. After repeated weigh-ups, ADIDAS decided in 1996 to outsource its apparel distribution business in the United States to UPS Worldwide Logistics company commitment; the first half of 1997 and CALIBER logistics company cooperation, the United States SPARTANBURG factory in its production of sports shoes distribution outsourcing to CALIBER. The logistics cooperation with these companies makes ADIDAS produce good benefits, which not only saves the cost but also improves the quality of logistics service so that its products can be quickly delivered to customers.
In 1996, ADIDAS continued to adjust its sales channels to turn some of the franchisees and distributors into subsidiaries of the Group. As a result of this shift, ADIDAS ‘royalties in 1996 decreased slightly from 100 million in 1995 Mark reduced to 97 million marks. However, the proceeds from the remaining concessionaires and distributors still increased by 8% over 1995.
In 1997 in Latin America, in order to achieve full control of the ADIDAS brand, it is estimated that in 1998 the regional management will continue to take over the distribution of ADIDAS products wherever feasible.
ADIDAS strives to reduce costs through cost control. In countries where SALOMON sells its products through distributors, the company uses ADIDAS to sell its products in agencies in these countries, thus reducing costs and increasing efficiency. ADIDAS will rationalize sales channels, coordinate the sales and distribution channels of ADIDAS and SALOMON, and leverage the strong collaboration between ADIDAS and its retailers in footwear products to promote SALOMON sales such as sales of SALOMON products in the skating industry. TAYLOR MADE’s strength in the retail of golf products also helps ADIDAS apparel and footwear sales.
In 1998 in the ADIDAS-SALOMON group of logistics operations carried out a comprehensive restructuring. The strategic focus of ADIDAS 1998 is first to complete the merger with SALOMON. In 1998, the new golf and bicycle business unit brought together TAYLOR MADE’s advanced equipment and ADISAS’s outstanding experts in apparel and footwear. These two organizations promoted their sales by using existing sales channels to jointly develop yeezys products.
In group reorganization, ADIDAS American Golf Company merged with TAYLOR MADE’s golf facility and moved to CARLSBAD, California, where TAYLOR MADE is located. In Europe, a UK-based organization specializing in the sale and distribution of golf products is set up to establish a base to better serve the region’s sales channels.
In the strategic focus, the second is to establish a wholly-owned subsidiary in Japan to take over the distribution of clothing and footwear products in the region. ADIDAS originally commissioned DESCENCE to undertake the sales and distribution of apparel and footwear products in the Japanese market. Due to the expiration of the entrustment agreement with the company by the end of 1998, ADIDAS vigorously established its distribution subsidiary in order to guarantee Japan, an important market in Asia. The work began in 1997 and on April 19, 1998, the company was formally established with 113 employees. ADIDAS seeks to make the company a base for its penetration into Asia. In the first quarter of 1999, it will take over DESCENCE’s former sales and distribution business for ADIDAS.
In 1999, the cost of ADIDAS increased by 16%, slightly higher than its net sales. Despite the increase in gross profit, the cost increase in the long run hindered the development of the Group. As a result, ADIDAS has taken a number of strategies to reduce costs and increase efficiency to meet the needs of an effective organization. These strategies include improving the efficiency of the supply chain; reorganizing the European logistics system; restructuring and optimizing the organizational structure of ADIDAS, especially the marketing department; making full use of the Internet to strengthen contacts with suppliers and customers, not just for sales and development market. Through these measures, ADIDAS yeezys for sale reduced its operating costs as a percentage of sales by 2 percentage points.
In 1999, fixed assets increased by 16%, mainly due to increased investment in IT technology, which was partly used to save on logistics costs.
TAYLOY MADE by increasing investment in logistics, product development, manufacturing, sales in the third quarter of 1999 than the 1998 level has greatly improved.
In 1999, ADIDAS faced a difficult retail environment in North America. For sportswear companies, ADIDAS’s contract sales channels experienced short-term difficulties as retailers needed to sell off their excess inventory and tended to reduce new product orders, resulting in a reduction in sales of ADIDAS in North America. However, in the medium to long term, the current dilemma will lead to a healthier retail environment and will most likely stimulate a new round of development for sports product companies.

Image result for adidasSales of ADIDAS in Europe increased by 13% in 1999, largely due to the transformation of TAYLOR MADE’s sales from a sale through independent distributors into an entity wholly owned by TAYLOR MADE. Overall, Adidas adjusted its marketing strategy in 1999, a substantial increase in global revenue, compared with 99.1 billion in 1998 rose nearly 500 million marks, even more alarming is that it achieved sales revenue of 12.8 in Asia in 1999 Mark billion, an increase of nearly 80% over 1997.
Can also be seen from another set of data, Adi logistics strategy adjustment. In 1996, ADIDAS held 43% of the shares in ADIDAS Distribution Centers, LLC, Lansing, the capital of Michigan. In 1997, the shareholding ratio was 46%, while in 1998 it increased to 63% and in 1999 it was 61%.
Beginning in 2000, ADIDAS embraces and adapts to the “three pillars” of electronic transactions in the Internet era. First, to globalize the market with Sportsline.com, the world’s leading Internet sports media company, and Sports.com, its European affiliate, that is, to work extensively with these two companies in the field of electronic transactions and through them The website cbs.sportsline.com and sports.com promote the ADIDAS brand and its products. This global partnership has penetrated Asia from the United States and Europe. This collaboration will enable ADIDAS to benefit from the experience of its two partners in the field of electronic transactions, enabling the three companies to use each other’s brands, offering great potential for online sales of ADIDAS products. Secondly, the joint operation of electronic transactions with some important retailers serves as a significant complement to the above electronic trading strategy. Finally, sell your own  cheap yeezys  on your own website. In order to ensure the effective implementation of the pillar strategy, ADIDAS Company transformed the existing warehouse to establish a modern large-scale distribution center in Germany, providing distribution services for the sales of enterprises throughout Europe and the Middle East, and improving the efficiency of logistics and distribution.
Expand outlets and guarantee supply chain strategy with foundry
In the new century, sports goods companies are more and more cost-sensitive. Due to the very large volume of supply, slight changes in unit costs can cause significant changes in total costs. In addition, sales of one style of sports shoes have been reduced to 8-9 months, more than half the level of the previous generation. Previously foundries were the next half-month orders, and now it is becoming the next order every week; the life cycle of shoes has been reduced from the previous 5-6 months to about 3 months.
In order to cope with this adjustment, the supply chain security function is still important. On the one hand, every family is increasing its production network. Nike, for example, stepped up the layout of its local production facilities in Asia and in South America, Australia, Canada, Italy, Mexico, Turkey and the United States. According to the Social Responsibility Report released earlier this year, Nike employed a total of 650,000 workers. The list of overseas producers announced by Nike includes 124 in China, 73 in Thailand, 35 in South Korea and 34 in Vietnam. In addition, there are other regions in Asia as well as South America, Australia, Canada, Italy, Mexico, Turkey And other places of the factory. The same is true of ADIDAS, crazy layout throughout. This advantage is also evident. Like the EU and China that started the quarrel this year, because of the diversification of origins, some of their products originally ordered by China could be quickly diverted to Indonesia, Vietnam and other countries. According to Spain’s quotation from Indonesian Trade Minister Marie Elka Pangestu, Adidas has placed orders with several Indonesian companies for 140 million U.S. dollars. The conversion to Indonesia, Vietnam and other countries is estimated at about 20% of the company’s current output in China. This directly reduces the pressure on the business.
On the other hand, Adidas and foundry business research and development to maintain interaction to solve this dilemma. There is a distance between the development of shoes and the production process. After the shoes are not designed, they can be put into production immediately. Instead, they must undergo processes of mold making, sample shoes making, costing, modification and improvement. In this process, because brand companies only have the ability to design and sell, they must work closely with manufacturers.
Adidas and his foundry Pou Chen are unparalleled in this cheap yeezys, Take Baidu’s Adidas R & D center in Gaobo Industrial Park, Dongguan as an example. The center is Adidas in the world’s largest jogging shoes research and development center, the development of shoes by Adidas designers and researchers in the R & D center staff together, Adidas is mainly responsible for product design, and R & D center is responsible for the production process of the various processes .
Product Development First, Adidas company to determine the shoes, soles, upper design and material, and then research and development center responsible for the development of mold, according to the requirements of the procurement of raw materials, R & D center in the factory to make shoes. Sample shoes developed later, the first high-level review of the internal Adidas, put forward feedback after the modification, after key customer evaluation, and then through the final evaluation of the product.
In costing, R & D center can make suggestions, such as designers designated product quality is not good, the price is high, long delivery time. In these cases, although Adidas has previously assigned the material, it is possible to modify the original design in accordance with the program proposed by the R & D Center.
R & D interaction makes Adidas and Baocheng have a mutual embedded interface. With this interface, Adidas can make it
The product design has become a production program; in the high-port R & D center design success rate has been as high as 90%. This protects the functioning of Adidas Kingdom of Sport.