Adidas is a firm associated with developing, producing and marketing various athletic and sports products in the global market. The firm is located in Germany and regarded as the number two sports footwear and apparel company worldwide. The company continuously improves the quality, look and feel of their products so as to meet the needs of its consumers. Therefore, the policy of creating products that meet the needs of athletes, as well as the common people, has ensured that Adidas remains dominant in the market hemisphere. The companys strategy of continuous development and manufacturing new products, thus improving its competitive position and financial performance, has made the company one of the most successful in the world. Adidas can be reckoned as a successful one based on the perspective that it creates products that are of high quality and are demanded in the market. Also, Adidas has proven to be a firm that initiates its services via a socially and environmentally accountable perspective (Mermod & Idowu 2013, p. 7-11). Moreover, Adidas is a firm that is worth investing in as it provides investors with the opportunity to attain their target of gaining profit.It has to be noted that finding a firm that operates in a socially and economically responsible manner is difficult for any investor. Thus, the paper will illustrate that the decision of investing in Adidas should be based on its performance from the economic, social and environmental perspectives. The paper will explain in detail the budget and sustainability reports of Adidas to determine its financial status for a financier. Furthermore, a comparative analysis of up to two years will be drafted to show the benefits of investing in this company (Epstein & Buhovac 2014, p. 32-36). The paper will also entail issues associated with the firms sustainability practices and reporting in the areas of environmental and social performance. Therefore, the contents of the research will include a conclusion meant to elaborate on the significance of investing in Adidas based on its socially, financially and environmentally responsible approach.
Adidas AG Company
The chart below enumerates how Adidas had performed financially in 2013-2014. Additionally, the table aims at motivating the investor to invest in Adidas because of its ability to generate profits each year.
|General Financial Information||Financial Year 2013
|Financial Year 2014|
|Total Liabilities||$8.13B||$9. 04B|
|Total Owners Equity||$7.28B||$7.47B|
|(Basic) Profit earned/share (EPS)||$1.03B||$1.03B|
|Total Ordinary Shares Issued||$177,434||$180,110|
|Profit received by shareholders (DPS)||14,203M||14,534M|
|Net Cash Flows from Operating Activities||$118M||$439M|
|Net Cash Flows From Investing Activities||$268M||$554M|
Fig. (1). Adidas Financial Performance in 2013-2014.
The table above shows that Adidas as a sportswear company has been successful in its sphere of operation. The comparison made between 2013 and 2014 precisely specifies that investing in Adidas will benefit the investor as there are significant chances of earning from such an investment. The company seems to have set its goals correctly because each year, as shown above, has generated profits. Essentially, it is the company perceived as an organization that operates under a well-defined financial, social and environmentally responsible perspective. The total assets owned by Adidas give one the morale to participate in the achievements of the company. The demand for the goods produced tend boosts the companys operations and increases its economic value. It should be noted that Adidas was able to increase its total shares from $15.41B in 2013 to $16.51B in 2014, consecutively (Kumar & Reinartz 2012, p. 44-49). Thus, the assets owned by Adidas entail that investing in the company is a wise decision as it is likely to gain even better results every year.A recommendation to invest in the company can be made on the companys achievements in understanding the significance of managing its marketing atmosphere and the ability to produce goods designed, created and sold to the desired market. The relevance of the above table is to assist the prospective investors to understand how well the firm is managing its cash flows. Essentially, cash flows from the financing activities imply the flow of money between Adidas and its owners and creditors, as well. Furthermore, the presence of funding activities permits the firm to raise the capital and repay shareholders. Shareholders are, therefore, in a profitable position as their investment will be repaid as scheduled. According to the chart, the company has managed to handle its shares well both in 2013 and 2014, which is an indication that it is on the right track in terms of achieving its set goals (Gillentine & Crow 2009, p. 55-59). It has to be noted that cash flow is associated with the firms buying/selling of products, mergers and acquisition, and investment in other organizations.Therefore, the approach that has been chosen by the company since 2013 to 2014 in that area of investment entails that an appropriate strategy has been applied. Additionally, it means that investing in Adidas will bring good outcomes as one is assured of positive results evident from its past performance. The outstanding shares represent the companys market value. Therefore, the relation of outstanding shares to earnings per share has been initiated well both in 2013 and 2014, which is a significant factor for an investor. The approach was undertaken by the company in terms of outstanding shares and earnings per share, which entails that the investor is likely to earn up to $200,000 per share. Also, from the financial performance of the company, it is clear that the firm has been constantly generating profits (Kumar & Reinartz 2012, p. 53-54). Furthermore, the profits earned demonstrate that the firm has a set target of benefiting its stakeholders. According to the chart, the firm was able to obtain a profit of $1.03 billion consecutively, which shows that the firm is in the right market and the strategies applied are effective.Total liabilities consist of current liabilities that are made up of short-term loans, amounts payable to suppliers and other outstanding payments that take into account long-term loans funding significant services. The table enumerates that Adidas has handled its total liability well. Every year, the company attempts to generate better results, meeting the needs of the sports world. Thus, opting to invest in Adidas is not only beneficial for the investors but for the athletes, as well. The athletes will be able to get better products, and the investor will earn his or her shares as per the terms of the company (Mermod & Idowu 2013, p. 13-22).
Adidas Company has worked hard to achieve such outstanding results, and hence, the issue of social performance cannot be unnoticed since it has greatly contributed to its success. Socialization is the process in which employees become acclimated to the culture of new workplace. Thus, Adidas has implemented a socialization perspective that promotes the organizations continuity rather than change. The company has come up with a program known as onboarding as a means of creating better socializing within the company. The Onboarding Program is used to introduce new culture to new employees by creating a seamless transition. The outcome of employees participating in the Onboarding Program results in employee retention, engagement and productivity. The implication of the Onboarding Program is that it makes employees more responsible and skilled in the tasks assigned by senior employees. The rationale for the success of the program is because employees are passed through a series of instructor-led trainings and orientations.
Additionally, new employees are permitted to step right into the stream by picking up the nuances of their position via interpersonal communication. Furthermore, the social performance of Adidas has been successful due to the creation of an Onboarding Program, which enables the company to effectively introduce employees to the companys policies, values, and culture. The rationale for practicing the contents of Onboarding Program at Adidas is that it has led to a significant association between employees and the company as a whole. The program ensures that all employees communicate in a similar language, hence, the outcome of better performance in the market. Moreover, the program has enabled the employees to participate in the firms tasks with vigor and from a teamwork perspective. Therefore, the social performance of the company has been of importance, especially in the area of socializing and contribution into the market share.
Adidas environmental program is known as the Green Company and is based on years of environmental initiatives designed to reduce the levels of air pollution in administration offices, distribution centers, and manufacturing areas. The firm has set ambitious targets in the areas of energy, paper consumption, water and reduction of household waste. The firm has a Green Team that promotes environmental activities on sites by mobilizing support of initiatives and encouraging their colleagues. The presence of Green Team has enabled the company to launch projects meant to decrease the amount of domestic waste sent to landfill. Moreover, Adidas has its TaylorMade-Adidas firm that recycles waste; hence a right approach to ensuring the atmosphere is clean and free from pollution (Mermod & Idowu 2013, p. 34-36). Additionally, domestic waste has been reduced through the replacement of reusable one-way paper cups.Furthermore, Adidas has also opted to collect organic waste and recycle it into biogas that can be used as electricity. The strategies used by Adidas are aimed at making sure that its functioning is waste-free and environmentally friendly. Thus, Adidas is a green firm as it ensures that employees, customers and the community are in the safe conditions. Therefore, Adidas is a company that has its set goals in terms of safe and healthy environment (Gillentine & Crow 2009, p. 45-47). Also, it can be stated that the company has taken all the needed initiatives to ensure that the environment is free from pollution. Adidas is a worthy company to invest because it desires to safeguard the lives of its employees, stakeholders and clients, as well.The company also has the Green Energy Fund. It assists the firm to implement its energy and carbon reduction projects. The initiative is meant to reduce carbon emission and boost cost saving and hence, keep the atmosphere green. Apparently, the company has taken the necessary steps to protect the environment and ensure the reduction of carbon emissions. Investing in Adidas is an explicit assurance that the investment will be made into a safe and environmentally-friendly company (Morschett, Schramm-Klein & Zentes 2015, p. 23-28). The rationale for investing in Adidas is based on the fact that the company values the significance of initiating an environmentally accountable approach.
The paper clearly enumerates Adidas social, environmental and financial status as the reason for investing in the company. Also, it is a beneficial perspective as the investor is assured of positive results in terms of shares and profits from the investment. The firm is rated as the second best company globally in the area of athletic and sportswear; hence, the chances of it succeeding even more in the future are quite high. The firms profit earnings between 2013 and 2014 are $1.03 billion, which is an indication that high profits are being generated annually. Financially, the company is fit for the investment.Socially, the company has put into consideration a program known as Onboarding, where employees are incorporated on issues associated with the terms of the organization. The Onboarding Program has been designed by the company to elaborate to employees the contents of the companys mission, culture and vision through the communication approach. Apparently, the Company treasures the significance of the program as it permits employees to interact with each other from a social point of view. Practicing the he Onboarding Program has led to better employee performance and product delivery. Therefore, Adidas is a company that has clearly put into consideration the contents of being socially responsible to its employees and the entire market. Thus, Adidas is operating from a socially responsible perspective, which is a significant indicator of appropriate policy making.When it comes to the environmental performance, the company has introduced the initiatives of Green Energy Fund and Green Company program that ensure environmental preservation and protection. The firm has taken into consideration the significance of recycling its products as a form of keeping the environment clean and free from carbon. Investing in Adidas is a desirable approach as one is assured of a firm that cares about the health of its employees and clients. Primarily, investing in Adidas is the right decision as the investor is in the position of earning positive results, socially, financially and environmentally.