Mi adidas – Mass

Customization
Group 2
Dubbaka Vineeth
Kilaparthi Ramesh
Gopal Sigireddy
Suryapally Bharadwaja
Jaswanth Yarlagadda
Pulkit Jain
 Company Overview
 Started in 1920, when Adolph “Adi” Dassler and his brother Rudolph made
their first shoes in a small village in south Germany using basic material
available after World War I.
 Their idea was to provide every athlete with the best possible equipment.
 Major breakthrough in 1936 when Jesse Owens was the first agreed to wear
their shoes in Berlin Olympics, where he won 4 gold medals
 In 1948 the two brothers quarreled, Rudolph left to establish Puma and
Adolph registered Adidas.
 By 1976, over 80% of medal winners(Montreal Olympics) were wearing adidas
and it became a household name.
 Company Overview
 Nike(1972) and Reebok(1979) entered the US market and both over
took the market after the death of Adolph Dassler in 1978.
 Thereon, the company was in a tremendous downfall until 1993,
when Louis Dreyfus was appointed as chairman.
 In 1997, Adidas acquired Solomon Group and this increased the
company’s sustainability because of the broad portfolio of sports
brands(both summer and winter wear).
 By 2001, under the lead of Herbert Hainer as CEO, the net sales of the
company grew to 6.1 billion Euros with an estimated Global market
share of 15%.
 Market overview

 In 2000, Global foot wear market – US $16.4 billion with North

America, Europe and Asia accounted for 48%, 32% and 12%
respectively
 60% of the market is controlled by 3 major companies:
 Nike – 35%
 Adidas - 15%
 Reebok – 10%
Market share Nike Adidas
US 42% 11%
Europe 31% 24%
Goals -Mass customization
The vision of mass customization is to reduce the effect
of the assumed trade-off between variety and cost

Ability to provide customers high levels of variety and

customization through flexible and responsive
processes

Standardization and modularization of process to increase

variety while reducing production cost

Understand the sensitivity to WTP vs Customization

 Advantages Mass customization
 Customer has control over product
 Does not have to pay for features he/she does not want

 “Not in your size” becomes a thing of the past

 Company does not have finished product inventory-
better use of working capital
 Easier for company to differentiate product
 Levels out economic fluctuations
 When slowdown occurs, less backlog of inventory
 Prices do not have to be cut as much
Challenges with mass customization

Elicitation

Flexibility

Logistics system
 Quality
Mass Production
Mass Customization

Cost Speed

Dependability Flexibility
 Mi Adidas

• Envisioned as an image tool and a centre for the Forever sports

division.
• Launched in 2000 - to provide customized sports shoes to Customers,
a similar experience enjoyed by top athletes.
• A plan was rolled out with 4 phases
Mass Customization rollout plan
Phase I
• Aim of phase I is to evaluate the feasibility and prospects of MC in
athletic shoes
• Customization was offered in regard to fit, performance and design
• Phase I was rolled out only at select events and stores
• During this phase 3D foot scanner was used and run by adidas experts
• Although the pilot project aimed for 300 pairs, it got extended to 400
pairs
• Further all the 400 customers were hugely satisfied with the product
and expecting the service in future
Phase I
• In phase I, importance was given to product feasibility and customer
response
• Process feasibility was not considered
• In phase II, many problems related to retailers, technology,
organizational and supply chain structure surfaced effecting MC
Challenges- Mi Adidas
• Retailers
• Conflict between marketing and sales teams in store selection
• Mi Adidas is seen as a promotional activity rather than as an integral part of
adidas
• Varied customer turnout depending on commitment of retailer
• Information management
• Faulty kiosk system
• Lack of compatible sales system for MC
• Production
• Procurement and provision of materials were difficult and time consuming
• Mass production facilities were not designed for MC
Challenges- Mi Adidas
• Communication and competing initiatives
• Low budget of mi adidas limited the promotion of highly technical and
advanced customization process
• Limited resources and management attention
• Perception of mi adidas as a secondary brand concept
Way ahead
• Maintain the developed capabilities and selectively run mi adidas
fares and planned retailed tours following top events such as
Olympics, etc.
• Simultaneously, expand MC with limited customizable options which
captures maximum WTP to different markets
• Shift from MTO (Make to Order) to ATO (Assemble to Order) in
modular production systems
• These measures help reduce lead time and costs
THANK YOU