On March 8, Adidas announced that it is predicting an operating loss of $736 million, including a net loss of $527 million. This marks their first annual loss in 30 years. The drastic loss comes after the shutdown of their Yeezy production line.
Adidas has recently terminated their partnership with Ye, formerly known as Kanye West. The decision was made following a series of controversial remarks and problematic behavior on his side. Adidas’ brand image was ultimately threatened by this behavior, leading to the termination of the partnership.
Here are the key lessons businesses can take away from Adidas’ mistakes:
1. Agility in Decision-Making
Not to Do: Adidas waited too long to take any action. As a result, there was a backlash from the public that caused the hashtag #boycottadidas to go viral on social media.
To Do: Implementing a crisis management plan will enable you to respond rapidly. This can save your business from any potential crisis.
2. The Influencer Domino Effect
Not to Do: Ye’s controversial statements are nothing new. In 2018, his political opinions also landed the German sportswear brand in hot water.
To Do: Avoiding risking your brand image is a necessity. Therefore, businesses should partner with celebrities and influencers whose values align with theirs.
3. Navigating Revenue Growth
Not to Do: By ignoring consultancy that could have predicted events and minimized the risks, Adidas’ global supply chains faced threats due to the Russia-Ukraine war and China’s lockdowns in 2022, impacting global shipping.
To Do: Business consultancy and market research can minimize risks and maintain your revenue growth management through factual data and smart solutions.