Adidas is a company that utilizes a differentiation strategy. They approach this differentiation strategy by providing great customer service and quality items. The company prides themselves on diversity and inclusion. In addition, they have achieved huge amounts of brand loyalty. For example, many people like to shop through either Nike or Adidas. Personally, I like to shop through both. That said, I do tend to be more loyal to Nike. I was able to get direct information about the company from my sister, who is a recruiter at Adidas. She stated that Adidas wants to “represent [their] consumer better every year by looking at [their] consumer insights constantly.” That said, they are looking for ways to stand out to their consumers above other companies. According to the Adidas website, their strategy is “enabled by a mindset of innovation across all dimensions.” This innovation certainly supports their differentiation strategy. Adidas also prides itself on a culture in which their employees enjoy coming to work. The general compensation for Adidas employees is a base salary and eligibility for a yearly bonus. Adidas also provides benefits for employees through a benefits company called Aetna. Through this insurance provider, Adidas employees receive health, dental, and vision insurance. There are also additional discretionary benefits provided, such as PTO, paid sick leave, retirement plans, and likely others. This compensation strategy supports differentiation strategy because it keeps the employees happy and enables the company to retain their talent. By having eligibility for bonuses, employees are more motivated to put in their best work, which allows their customer service differentiation strategy to prosper. As mentioned in Chapter 1 of our textbook, this could be considered a type of “pay-for-performance” compensation strategy. Adidas still may not be able to pay as much as they could if the product market was less competitive. Adidas has to compete with Nike and other activewear companies, meaning they also have to compete on a pricing level. In addition, the labor market for Adidas is massive. In fact, people will set a long term goal of working for Adidas someday. That said, it is not hard for Adidas to find employees. After speaking directly with my sister, an Adidas recruiter, I found out that every application posted for Adidas gets hundreds of candidates. There are so many people interested in working for Adidas, that it is hard for me to believe there could be a shortage of talent. In general, this might allow Adidas to get away with not paying their employees as much as they are capable of.
My Sources:
https://www.adidas-group.com/en/about/strategy-overview/
https://www.grin.com/document/508255
https://www.payscale.com/research/US/Employer=Adidas/Benefits
Adidas Recruiter at Portland Office
