The Issue of Animal Cruelty in the Production of Adidas Goods

The purpose of this study is to describe the strategic vision and its alignment with the ethics of a well renowned sportswear manufacturer in Europe and the second largest in the world, Adidas AG, with its headquarters situated in Herzogenaurach, Germany (Lewis, 2016). The multination cooperation manufactures and design shoes, sports accessories and clothing and is a public listed company in DAX exchange. Adidas has made number of acquisitions including Runtastic and Reebok International and has in total 170 subsidiaries. Adidas use differentiated targeting strategies to attract their customers which includes people from all age, especially the one who are passionate for fitness and sports (Bhasin, 2017).

Strategy

With the mission to be the best company in the world, Adidas has a strategic business plan called “Creating the New” and has a mission 2020, to sell the best sports products with the best service and experience, and all that in a sustainable way. The strategic plan consists of three main goals i.e. Speed, cities and open source (Pratap, 2019). Speed means that the company wants to keep their customers upto date with the latest and fresh fashion. As stated by Friedman (2018), according to the CEO, Kasper Rorsted, “Speed is a key factor for success in our business. We want to be in a position to always offer our consumers exactly the products they want to buy, whenever, wherever and however they want to buy. That means we need speed”. With the increasing rate of urbanization, most people are moving towards the main cities and with that the company wants to focus on key cities in order to grow in term of market and trends. The major cities under the focus of the Adidas are London, Los Angeles, Shanghai, New York, Paris, and Tokoyo. The purpose behind focusing on these cities is to bring brand awareness among the masses and ultimately helping the brand to grow faster. According to Schild (2018), the net sales of the company in the key cities have shown positive results with 33% and the market shares grew by 1.7%.

Open source emphasis on the company’s alliance with the outside world on the initiatives such as Creative collaboration, athletic collaboration and the partner collaboration. Also, in alignment to the mission of Creating the New, Adidas is focusing on digital transformation without which it is not possible to compete in the fast-growing digitalization world. Not only on B2B level, also the customers want personalised and better experience from their brand. Therefore, the digital priorities are on the roadmap of Adidas. Erkilic (2018) stated in his blog that the brand is taking every means in account, such as Mobile, social media and retail, where they can interact with the customers to provide a reliable shopping experience. According to Pratap (2019), the company is focusing on the partnerships in order to extend the impact of digitalization on its entire system.

According to Bhasin (2017), Adidas and its partner Reebok are Stars on BCG Matrix, Matrix that helps to identify the strategic position and further actions of company. This means the brand has a strong market presence but at the same time have a high competition. In term of sustainability, adidas is playing its role since 1989 where they banned the use of chlorofluorobcarbons (CFC) from their all products to protect the environment and the ozone layer. The company has launched in 2016 its sustainability strategy 2020, through which they want to bring the change in the world (Lagnese, 2017). In the journey of sustainability some major highlights include Adidas DryDye, footwear made with ocean plastic, adizero Primeknit, using sustainable cotton, low waste, saving water and also Fair wages for the employees, fair labour and communication of the employees with the managers.

Ethical Issues

According to Paul Odefey (2016), the clothing industry adds almost 10% of total global carbon emission and is the second largest industry causing pollution. With the strategy of speed, meaning quick fashion to the customers and with such a vast industrial presence around the globe, Adidas has to deal with a lot of ethical issues. Regardless of a great fame the company has acquired through its products and its presence, other than many ethical issues highlighted in media, until now Adidas appears in the news sometimes with the term “Nazi” which has a big history and can’t be neglected.

• Nazi origins of Adidas and Puma tennis shoes
• The Nazi Sibling Rivalry That Divided a Town and Created Modern Sportswear
• The founders of ADIDAS and PUMA were both NAZI

Apart from the dealing with this issue of dark history, Adidas has come across some other ethical issues including:

• Making shoes with kangaroo leather
• Employees Low wage Issue
• Environmental issues including energy consumption, greenhouse gas emissions and carbon emission
• Water pollution
• Usage of chemical substance in the products

Congruence

Keeping in view the strategy roadmap 2020 of the company, it is not wrong to say that, Adidas is really trying to bring their business more sustainable and ethical. The usage of advance technology to produce products through recycled plastic waste is an excellent initiative to reduce plastic pollution. As mentioned in report by Adidas Group (2019), they have produced more than 5 million pairs of shoes in 2018, along with the cooperation with Parley for the Oceans, made by the recycled plastic waste.

By introducing the ZeroDye fabrics, adidas has been able to cut back the water consumption used in the dyeing process. The quality products made by this fabric have less environmental consrtaints by reducing water and energy usage. In the journey of becoming a sustainable company, adidas has banned the usage of plastic bags in the stores since 2016 (Kell, 2016). According to the company, with this ban, they would be able to save 70 million plastic bags worldwide, which is one of the big benefits of having such a vast presence in the global market.

Contradictions

The Speed part of Adidas’ strategy is to provide customers with the new fashion, but in order to meet that goal, company is neglecting the issues related to human rights. According to the human rights watch report, on 73 factories in Cambodia, the workers’ rights are being exploited. Also, it is mentioned in the report that in these factories mostly women are working and they face pregnancy related discrimination and sexual harassment. This is in total contradiction to the strategy plan 2020 of Adidas, where they mentioned that the company focus on rights of its labours. According to Guilbert (2018), the Clean Cloth Campaign (CCC) reported that the people working in the factories manufacturing sportwear for Adidas and other brands, were getting salary below the average living wage.

Adidas is causing harm to the animals, which in return disturb the whole eco-system. The company is involved in killing of kangaroos and with its leather are making football shoes. Even with the advancement in technology to made products for the customers, Adidas is still supporting this industry by killing the kangaroos, instead of switching to other synthetic fabrics. An NGO named Vegetarians International Voice for Animals (VIVA) claimed Adidas for its involvement in the killing of the kangaroos (“Kangaroo Leather Soccer Cleats, an Ethical Dilemma,” 2017). In the year 2016, Adidas was in highlight because of paying less income tax. Because of this Adidas has also got Ethical Consumer’s worst ranking for avoiding tax. According to Micheal West (2016), along with the assistance of Auditor KPMG Adidas has used several tricks like transfer pricing, royalties and saving money in off-shore accounts to avoid tax.

Opportunities and Recommendations

Since 2005, Adidas has been disclosing necessary information about their suppliers in order to bring transparency, where many other big names refused to do so, still there is space for the improvement. Most prominent is working conditions of the labour working in their supplier factories. The people working in those factories in the third world countries, need a handsome living wage, so that they can meet the basic needs of their families. Adidas need to focus on preparing such a contract for their workers that is not only profitable for the company but also for the workers, by protecting their rights.

With the advancement of technology, which the company is focusing in their Strategy plan 2020, Adidas must have to end the killing of the kangaroos, from which they are making soccer boots of the animal’s leather. There should be a clear ban on such activities, and they should be focusing on the alternatives in the preparation of their products. Overall, Adidas, with their sustainability initiatives like reducing the water consumption, dealing with plastic pollution and producing products with sustainable material, is trying to play their part in doing business ethical with in alignment to their strategy. It is not wrong to mention that there is no such company, who is doing 100% ethical business in alignment with the sustainability, but it is a journey, which ever company has to start in order to save the world and make it better for our ancestors.