Group assignment case study sweatshop at adidas factories

MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY _*** _ BUSINESS ETHICS GROUP ASSIGNMENT Lecturer: Nguyen Bich Ngoc CASE STUDY: SWEATSHOP AT ADIDAS FACTORIES Participants Luu Thuc Quyen Tran Phuong Thao Le Nguyen Khanh Nguyen Van Chi Ton Ha Duc Thinh - 11225484 11225974 11223038 11226287 11226014 Class: International Business Management 64A School of Advanced Education Programs ( AEP ) Ha Noi, 2023 Table of Contents ABSTRACT .3 ADIDAS INTRODUCTION .4 I History and Back ground story .4 II Strategies III Advertising and Communication IV Scale Currently, Adidas has products in the following category Sell product Customer .10 Corporate Guidelines: 11 ADIDAS’ ETHICS ISSUE: SWEATSHOP AT ADIDAS FACTORIES .12 I Child Labour 12 II Disregarding human rights 13 III Consequences 14 IV People’s awareness and Adidas’ reactions 14 People’s awareness 14 Adidas’ reactions 14 V Adidas’ positive movements 15 Adidas directs to sustainability communities .15 Engagement 17 Adidas charity program: (specification) .20 CONCLUSION 22 REFERENCES .23 This is a preview Do you want full access? 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Log in ABSTRACT Adidas is a German multinational corporation that specializes in the design, development, manufacturing, and marketing of athletic footwear, apparel, and accessories It has experienced significant economic growth since its founding in 1949 The company has expanded its operations to over 160 countries and has become one of the largest sportswear manufacturers in the world In 2020, Adidas reported net sales of €19.8 billion, a decrease from the previous year due to the COVID-19 pandemic, but still a strong performance considering the challenges faced by the industry Adidas has achieved growth through a combination of factors, including product innovation, marketing, and strategic partnerships The company has introduced numerous iconic products, such as the Superstar and Stan Smith sneakers, and has collaborated with high-profile designers and celebrities to create limitededition collections Adidas has also sponsored major sporting events and teams, including the Olympics and the FIFA World Cup, which has helped to raise its profile and increase its sales In recent years, Adidas has focused on sustainability as a key driver of growth, recognizing that consumers are increasingly concerned about the environmental impact of their purchases The company has introduced eco-friendly materials and manufacturing processes, and has set ambitious targets to reduce its carbon footprint and water usage Overall, Adidas's economic growth has been driven by a combination of factors, including innovation, marketing, strategic partnerships, and a commitment to sustainability The company's strong brand identity and global reach have helped it to weather economic challenges and maintain its position as a leader in the sportswear industry ADIDAS INTRODUCTION I History and Back ground story Adidas, in full Adidas AG, German manufacturer of athletic shoes and apparel and sporting goods In the early 21st century it was the largest sportswear manufacturer in Europe and the second largest (after Nike) in the world Adidas products are traditionally marked with a three-stripe trademark, which remains an element in the company’s newer “trefoil” and “mountain” logos Headquarters are in Herzogenaurach, Germany The name Adidas (written “adidas” by the company) is an abbreviation of the name of founder Adolf (“Adi”) Dassler The Dassler family began manufacturing shoes after World War I At the 1936 Berlin Olympics, the American track-and-field star Jesse Owens wore shoes that were reportedly a gift from Adi Dassler Owens’s medal-winning performances increased awareness of the Dassler brand around the world After the disruptions of World War II, Adi and his brother Rudolf (“Rudi”) strove to rebuild the Dassler firm, but a personal breach between the brothers had become irreparable by 1948 The business therefore split in two: Rudi’s company was eventually called Puma, while Adi’s became Adidas Adidas grew steadily during the 1950s as association football (soccer) players switched to the company’s shoes, which were light in weight and featured screw-in cleats The company then developed a line of sporting goods, introducing soccer footballs in 1963 Four years later Adidas began to produce apparel For many years Adidas was the biggest name in athletic shoes, but competition increased during the 1970s, notably from newer firms such as Nike Adi Dassler died in 1978, and the company experienced falling market shares during the 1980s, despite an innovative endorsement deal with the rap group Run-D.M.C., creators of the hit song “My Adidas” (1986) (The company was to ally with hip-hop again in a 2016 deal with the rapper and entrepreneur Kanye West.) Between 1990 and 1993 Adidas was owned by the scandal-tainted French business executive Bernard Tapie, who failed to revive it The company was sold to investors who brought in another Frenchman, Robert Louis-Dreyfus, as chief executive officer and chairman Under his leadership, Adidas acquired the Salomon Group in 1997 Although best known for winter sports products, Salomon also owned the golf supplier TaylorMade Adidas was renamed Adidas-Salomon AG and moved into retailing, following the lead of Nike, in 2001 In 2004 the company entered a successful partnership with the clothing designer Stella McCartney In 2005 Adidas sold Salomon but held on to the TaylorMade brand The following year the corporate name was changed back to Adidas AG.Adidas’s later acquisitions included the Reebok company (2006), which owned the Rockport brand of shoes, and Five Ten (2011), maker of outdoor-sports shoes Adidas sold TaylorMade in 2017 II Strategies Innovation and Product Development: Adidas places a strong emphasis on innovation and continuous product development The company invests heavily in research and development to create technologically advanced and performance-enhancing products By introducing new materials, manufacturing techniques, and designs, Adidas aims to stay ahead of the competition and provide athletes and sports enthusiasts with cutting-edge products Branding and Marketing: Adidas has adopted a powerful branding and marketing strategy to create a strong brand image and connect with its target audience The company collaborates with high-profile athletes, sports teams, and celebrities to endorse its products and increase brand visibility Adidas also sponsors major sporting events, such as the Olympic Games and FIFA World Cup, to enhance its brand recognition on a global scale Multi-Segment Focus: Adidas targets various market segments, including professional athletes, sports enthusiasts, and fashion-conscious consumers The company offers a diverse range of products, including footwear, apparel, and accessories, to cater to different customer needs and preferences This multisegment focus allows Adidas to capture a larger market share and maintain a competitive edge Digital Transformation: Adidas recognizes the importance of digital technology and e-commerce in today's retail landscape The company has invested in digital transformation initiatives to enhance the online shopping experience and engage with customers through various digital channels Adidas leverages social media platforms, mobile applications, and e-commerce websites to reach a broader audience and drive sales Sustainability and Social Responsibility: Adidas has committed to sustainability and social responsibility as integral parts of its business strategy The company strives to reduce its environmental footprint by using sustainable materials, implementing eco-friendly manufacturing processes, and supporting recycling initiatives Adidas also engages in social initiatives and community projects to give back to society and promote positive change  These strategies have contributed to Adidas' success and helped the company maintain its position as one of the leading sportswear brands globally III Advertising and Communication  Marketing campaigns: Adidas launches captivating marketing campaigns to create brand awareness and engage with their target audience They collaborate with renowned athletes, celebrities, and influencers to endorse their products This is a preview Do you want full access? 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Log in and convey the brand's message These campaigns often feature compelling visuals, storytelling, and emotional appeals  Sponsorships and partnerships: Adidas strategically sponsors major sporting events, teams, and athletes to increase brand visibility and association with sports excellence By aligning with high-profile sports entities, they can reach a wider audience and build credibility For example, Adidas sponsors the FIFA World Cup, UEFA Champions League, and collaborates with athletes like Lionel Messi and Beyoncé  Digital marketing: Adidas leverages digital platforms to connect with customers and promote their products They maintain an active presence on social media channels, such as Facebook, Instagram, Twitter, and YouTube, where they share engaging content, including product launches, behind-thescenes footage, and collaborations They also utilize targeted online advertising to reach specific demographics  Influencer marketing: Adidas collaborates with influencers and content creators who align with their brand values and target audience These influencers create sponsored content, such as product reviews, style inspirations, or fitness routines, to showcase Adidas products to their followers and generate buzz around the brand  Retail experience: Adidas focuses on creating immersive and interactive retail experiences Their stores often feature innovative designs, digital installations, and personalized services to enhance customer engagement Adidas also utilizes technology such as augmented reality (AR) and virtual reality (VR) to provide unique and interactive shopping experiences  Public relations: Adidas maintains strong relationships with media outlets and actively engages in public relations activities They issue press releases to announce new product launches, collaborations, and initiatives Adidas also participates in interviews, press conferences, and events to share company updates and maintain a positive brand image Overall, Adidas employs a combination of traditional and digital marketing strategies, partnerships, and engaging content to effectively promote its brand and connect with its target audience IV Scale One brand that dominates the mindshare while consumers think of Hip Hop and sporty brands is Adidas So much so that Adidas is now one of the most desirable sportswear brands Adidas produces various sports equipment across different types of sports But then the question is what is the business model of Adidas that is helping the brand rule the sportswear industry across all the sports (obviously next to Nike) As of 2020, Adidas had a turnover of €19.844 billion and has approximately 62,285 employees worldwide From establishing itself as one of the best sportswear, it has also been working towards establishing itself as one of the best CSR (Corporate Social Responsibility) companies globally (as of 2020) Currently, Adidas has products in the following category  Footwear  Apparel  Accessories and Gear The Adidas Group's number of stores worldwide from 2008 to 2022 A Urban Community Mission (UCM)’s investigation into conditions at Tuntex and two other factories - Tainan and Nikomas Gemilang - alleges that employees face "extraordinarily high financial sanctions" if they make mistakes or are late for work UCM also claims that sexual harassment and verbal and physical abuse are rife Workers at the Tainan factory are threatened with the sack unless they work overtime, and are locked up if they refuse, UCM says III Consequences Children suffer from psychosis and physical harms Children are often forced to work long hours, up to 15 hours a day, seven days a week, in cramped and hazardous conditions The lack of education for these children is also a major concern The demand for products produced by child labor only perpetuates the cycle of exploitation, leading to more child labor and slavery The parents of these children may encourage them to work more to earn more money, which is not only harmful to the children's health and well-being but also deprives them of their right to education and freedom Encouraging child labor also fuels the black market trade of children, exacerbating the problem Thus, it is crucial to combat child labor and ensure that children have access to education and a safe environment to grow up in IV People’s awareness and Adidas’ reactions People’s awareness Adidas’ reactions Adidas has taken several steps to address these issues It has established a series of labor and environmental standards for its suppliers known as the "Adidas Group Workplace Standards." These standards outline the company's expectations for working conditions, including a prohibition on child labor and a limit on working hours 14 This is a preview Do you want full access? Go Premium and unlock all 23 pages Access to all documents Get Unlimited Downloads Improve your grades Upload Share your documents to unlock Free Trial Get 30 days of free Premium Already Premium? Log in To ensure compliance with these standards, Adidas conducts regular audits of its suppliers' facilities and monitors its supply chain using a third-party monitoring system The company also requires its suppliers to participate in training programs on labor and environmental standards In addition, Adidas has partnered with industry groups and non-governmental organizations (NGOs) to address child labor and working conditions in the apparel industry For example, the company is a member of the Fair Labor Association (FLA), an organization that works to protect workers' rights and improve working conditions in factories around the world Adidas has also taken steps to address the root causes of child labor and poverty The company funds projects that aim to improve access to education and healthcare in communities where its suppliers operate These initiatives are designed to reduce the need for children to work and provide families with alternatives to child labor Overall, Adidas has taken a proactive approach to address the issue of child labor and working conditions in its supply chain While there is still work to be done, the company's efforts are a step in the right direction towards creating a more ethical and sustainable supply chain V Adidas’ positive movements Adidas directs to sustainability communities Our community engagement is fully aligned with our overall purpose 15  As a global sports company we believe that through sport, we have the power to change lives Through our community engagement efforts, we put this purpose into action Powered by our brand attitude ‘Impossible Is Nothing’ we aim to create social impact for our communities  Through charitable contributions, volunteering and knowledge sharing, we work hand-in-hand with local organizations in key cities, key sourcing locations and key markets to bring our purpose to life Anchored in two pillars, ‘People’ and ‘Planet’, we aim to achieve the overarching goal of shaping a better future for everyone using sport as a positive vehicle of change  People: We drive access to sport for everyone and create an equal and safe environment for all when doing sport  Planet: We take action to end plastic waste by protecting the spaces we live and play in We support sustainable and environmental initiatives that drive change and create real impact  Relief presents an additional social and humanitarian component to our efforts As natural disasters and other crises can strike at any moment, adidas stands 16 with its communities in the markets, cities and sourcing locations in challenging times Our charitable giving guidelines support us in implementing our strategic priorities and adhering to our principles for social initiatives To ensure that our community engagement efforts land with sustained impact, we thoroughly measure, track, and evaluate our social impact Engagement We strategically select projects and long-term partnerships that create social value and the impact needed to drive positive change most effectively – ranging from skillbased employee volunteering, financial/ in-kind donations to expert advice, grants and sponsoring  We give back : To maximize our positive impact, we create volunteer programs and company-matched fundraisers that encourage employees to actively engage and bring our core belief to life Teams in all markets take part in multi-faceted volunteering initiatives, with projects ranging from sports coaching in safe places for women and girls to providing skills-based support to refugees to help them unlock their potential in the labor market By continuously running fundraising campaigns that match employee donations, adidas continues to demonstrate our collective and united support as one adidas family  We reduce product waste : As a sporting goods company, we have a responsibility for our planet We not want our products going to landfill, but 17 This is a preview Do you want full access? 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Log in rather give them a second life While reducing waste, we also have the opportunity to create positive change by supporting communities in need with our products Our product donations are supported by long-term partner organizations such as the Global Aid Network (GAiN) and Ora Kinderhilfe to ensure products are fairly distributed to create real change  18 We stand up for Diversity, Equity and Inclusion : We want to make sport accessible, equitable, and safe for all By championing individual uniqueness and cultivating a culture of belonging, we work together with expert organizations and local communities to create lasting change Through programs such as TeamPride to support the LGBTQIA2+ community, United Against Racism to stand with people of color, or Breaking Barriers to engage more girls in sport, we create an environment in which everyone feels valued, recognized, rewarded, and is given the opportunity to perform at their best    19 We cooperate for change : Grassroots football is not only where the stars of tomorrow are made - Grassroots clubs are support systems for their local communities and they are under threat adidas Football Collective and UEFA Champions League are championing grassroots football, so tomorrow’s stars can thrive We build infrastructure for change : By building infrastructure such as playgrounds and sports courts, we provide access to sports for communities around the world For example, we've partnered with athletes like David Alaba to build a football pitch in his hometown of Vienna, Austria, to create a space where people of all backgrounds can come together to enjoy the game of football And with our partner, the US Soccer Foundation, we built more than 100 mini-pitches across North America to improve access to football and use the sport to transform and improve the lives of children in underserved communities We protect our planet : Our holistic approach to sustainability responds to the challenges that endanger our planet and people Our activities range from awareness raising campaigns to collaborations with partners such as Parley for the Oceans to inspire action to fight plastic waste Over the past few years, we have proved our commitment to saving the oceans in our annual Run for the Oceans events In 2022, it became the biggest virtual running event in the history of adidas For every 10 active minutes logged, we supported our partner Parley’s Global Cleanup Network to remove plastic waste (up to 250.000kg) from beaches and islands Adidas products use 50 percent recycled polyester Adidas charity program: (specification) A new: “ ADIDAS accompanies young people with special circumstances” compiled by Dan Tri newspaper On September 14, adidas Vietnam had a visit and presented 240 pairs of shoes to KOTO Humanitarian Vocational Center (District 7) within the framework of the program "Time to change up" from old shoes for new shoes which this brand just launched in mid-August The "Time to change up" promotion invites users to bring their used shoes to adidas stores nationwide to receive special offers when buying new shoes With nearly 1,000 pairs of shoes collected after weeks, adidas Vietnam has taken steps to clean, refurbish and especially deliver to relevant organizations 20 This is a preview Do you want full access? Go Premium and unlock all 23 pages Access to all documents Get Unlimited Downloads Improve your grades Upload Share your documents to unlock Free Trial Get 30 days of free Premium Already Premium? Log in Among them, KOTO - a project operating with a non-profit business model and a vocational training center with the motto of changing the lives of disadvantaged children in Vietnam - is the destination of 240 couples shoes in the program "Time to change up" Ms Le Truc Chi, Senior Manager, Brand Activation of adidas Vietnam, shared: “Although it is only a small gift, adidas hopes these 240 pairs of shoes will truly become companions with young learners KOTO in extracurricular sports activities as well as entertainment We also want to contribute to raising society's awareness about health care and community support that adidas Vietnam has persistently pursued over the years.” 21 This is a preview Do you want full access? 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Log in CONCLUSION It's not simple to manage a business the size of Adidas, especially when trying to balance the demands and expectations of many stakeholders Although the business has had its share of difficulties in the past, it has made efforts to overcome them and enhance its procedures However, Adidas cannot simply concentrate on remaining competitive and containing costs Additionally, the business must uphold moral and social responsibility criteria Adidas has previously been accused of having shoddy working conditions and committing labor laws infractions in its supplier chain Stakeholders are worried about these problems, and the company's reputation has suffered But Adidas has made considerable improvements to solve these issues The corporation has put in place a number of efforts to enhance working conditions, lessen its impact on the environment, and increase openness in its business practices Adidas has also made efforts to improve its transparency and accountability The company regularly publishes reports on its sustainability performance and engages with stakeholders to gather feedback and address concerns It has also established an independent monitoring organization to oversee its supply chain and ensure compliance with ethical and social responsibility standards While Adidas still has more work to in terms of corporate social responsibility, its efforts have been well-received by stakeholders and the industry as a whole By continuing to prioritize sustainability and ethical practices, Adidas will be wellpositioned to maintain its success and reputation as a leading global brand It is clear that the company is committed to making a positive impact on society and the environment, and this dedication will undoubtedly lead to a brighter and more responsible future for Adidas 22 This is a preview Do you want full access? 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Log in REFERENCES https://www.theguardian.com/uk/2000/nov/19/jasonburke.theobser ver https://www.theguardian.com/world/2000/nov/23/andrewosborn https://ndh.vn/doanh-nghiep/adidas-bi-cao-buoc-boc-lot-suc-laoong-cong-nhan-1065741.html https://thestrategystory.com/2021/09/13/adidas-business-model/ https://www.britannica.com/topic/Adidas-AG https://brademar.com/chien-luoc-marketing-cua-adidas/ https://shoeeffect.com/how-many-shoes-does-adidas-sell-a-year/ https://www.adidas-group.com/en/sustainability/social-impacts/communities/ https://dantri.com.vn/doanh-nghiep/adidas-dong-hanh-cung-cac-ban-tre-cohoan-canh-dac-biet-1348529207.htm 10 https://www.google.com/search? q=doing+sport+with+adidas&sxsrf=APwXEddOW5GzuHhGEV5lyIWesJsGW YUYMw:1686307190686&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjyyt To_7X_AhVYiVYBHbH3Co0Q_AUoAXoECAMQAw&biw=1920&bih=975&dpr =1 23