Reebok 2011 Annual Report Download - page 64

adidas Group
2011 Annual Report
GROUP MANAGEMENT REPORT – OUR GROUP
60
2011
02.1 Group Strategy
Group Strategy
The adidas Group strives to be the global leader in the sporting goods industry with brands built
upon a passion for sports and a sporting lifestyle. Inspired by our heritage, we know that a profound
understanding of the consumer and customer is essential to achieving this goal. To anticipate and respond
to their needs, we continuously strive to create a culture of innovation, challenging ourselves to break
with convention and embrace change. By harnessing this culture, we push the boundaries of products,
services and processes to strengthen our competitiveness and maximise the Group’s operational and
financial performance. This, in turn, will drive long-term value creation for our shareholders. To achieve
this goal, we have made strategic choices and will prioritise our investments under our six key strategic
pillars DIAGRAM 01.
02.1
Creating long-term shareholder value
Creating long-term value for our shareholders through significant
operating cash flow generation drives our overall decision-making
process SEE INTERNAL GROUP MANAGEMENT SYSTEM, P. 114 . Therefore, we are
focused on rigorously managing those factors under our control,
making strategic choices that will drive sustainable revenue and
earnings growth, and ultimately operating cash flow. Across our
operations, we pursue the avenues for growth which we expect to
be most value-enhancing, with particular emphasis on improving
Group profitability. In addition, rigorously managing working capital
and optimising our capital structure remain key priorities for us.
Furthermore, we are committed to increasing returns to shareholders
with above-industry-average share price performance and dividends
SEE OUR SHARE, P. 54 .
Diverse brand portfolio
Consumers want choice. Whether it is the athlete looking for the
best possible equipment, or the casual consumer searching for the
next fashion trend, we are inspired to develop and create experi-
ences that engage consumers in long-lasting relationships with our
brands. To maximise our consumer reach, we have embraced a multi-
brand strategy. This approach allows us to tackle opportunities from
several perspectives, as both a mass and a niche player, providing
distinct and relevant products to a wide spectrum of consumers. In
this way, each brand is able to keep a unique identity and focus on
its core competencies, while simultaneously providing our Group with
a broad product offering, increasing our leverage in the marketplace
SEE GLOBAL BRANDS STRATEGY, P. 68 .
Investments focused on highest-potential markets
and channels
As a Group, we target leading market positions in all markets where
we compete. However, we have prioritised our investments based on
those markets which offer the best medium- to long-term growth
and profitability opportunities. In this respect, we place a consid-
erable emphasis on expanding our activities in the emerging markets,
particularly China and Russia, as well as building our market share
in underpenetrated markets for the Group such as the United States
SEE SUBSEQUENT EVENTS AND OUTLOOK, P. 163 .
No matter in which market we operate, we recognise that consumer
buying behaviour and the retail landscape are unique. Therefore, to
fully exploit market opportunities, we tailor our distribution strategy to
present our brands to the consumer in the most impactful way. This is
achieved by following a distinctive but coordinated channel approach.
To this end, we strive to provide our customers with superior service
to secure prime shelf space for our brands, while continuing our
commitment to building a strategic competency in own retail and
e-commerce SEE GLOBAL SALES STRATEGY, P. 62 .
Creating a flexible supply chain
Speed and agility are key to outpacing the competition. We are
committed to meeting the full range of customer and consumer needs
by ensuring constant product availability in the correct size and colour,
providing game-changing technical innovations and also the latest
high-end fashion products to the highest quality standards.
A key strategic priority is to enable faster product creation and
production by continuously improving our infrastructure, processes
and systems. By sharing information from point of sale to source and
vice versa, we strive to connect and more closely integrate the various
elements of our supply chain, to enable quick reaction to changing
consumer trends. To this end, we focus on building maximum
flexibility. While leveraging the efficiency of common infrastructure
and processes, the Group strives to provide tailored solutions for
all our business models, be it the wholesale or retail channels, or
the performance-oriented or style-oriented businesses SEE GLOBAL
OPERATIONS, P. 90
.
Leading through innovation
Every adidas Group employee is responsible for driving innovation.
Therefore, we foster a culture of challenging convention and embracing
change, and require all areas of the Group to generate at least one
new innovation or meaningful improvement per year. In particular,
we believe that technological evolution and cutting-edge design in
our products are essential to achieving sustainable leadership in
our industry SEE RESEARCH AND DEVELOPMENT, P. 95 . Beyond this, enhancing
services for our customers, and implementing more efficient and
effective internal processes are other areas where our organisation
strives to innovate SEE GLOBAL SALES STRATEGY, P. 62 .