Other
Unit 1 Assignment 3 Achieved distinction
- Institution
- PEARSON (PEARSON)
investigate the role and contribution of innovation and enterprise to business success
[Show more]
Seller
Follow
Content preview
Jasper Sobande Unit 1 Task 1Because over 70% of the consumers that have participated in this survey feel that
sustainability is an important buying argument. Adidas understands that if they achieve to
make their products 100% sustainable, it will allow the business to achieve their goals to
become a market leader and makes consumers satisfied with the corporation.
Futurecraft loop is the first ever pair of footwear that have been offered by a sportswear brand; the
materials used have been recycled which contributes into removing waste from the oceans that are
then recycled. Adidas has used 3D printing, circular design and strung technology to help
manufacture this footwear which makes it unique and differ from other products. Adidas could
become a global leader in the sportswear industry the if they can successfully combine their three
areas of innovation (3D printing, circular design, and STRUNG technology). This will help increase its
sales and growth in hopes of becoming a market leader.
The lockdown restricted people from doing outdoor activities, due to the rise of deaths caused by
the pandemic. As a result, Adidas had to close for the safety of their employees and customers
which affected their sales revenue and growth resulting in a material revenue decline for Adidas in
its physical distribution channels during the second quarter of 2020. Their liability is also a major
became a concern for the business because the business would have to sack their employees and
sell assets to reduce the business liability. To ease the impact of the pandemic on its global sales,
Adidas have used their e-commerce website as their only source of income, this meant that if there
was a problem resulting to the website shutting down it could affect prevent Adidas from receiving
sales which is used to pay for employees, rent, suppliers, shareholders etc. Throughout the
lockdown Adidas saw an unprecedented growth in their e-commerce sales, which accounted for
more than one-third of its overall revenue. During the quarter, sales through the company's own e-
commerce platform climbed by 93%.
In currency-neutral terms, total revenue fell by 34% in the second quarter, this has helped Adidas
ease the affect the global lockdown had against them. The business website has generated a total of
£1.4 billion in 2020 due to the demand for trainers and fitness equipment that could be used at
home. Adidas chose to focus on increasing digital transformation by transferring their inventory to
their e-commerce, investing in a digital content studio to promote fitness exercises and healthy
diets, they have also increased their daily expenditure towards digital technology. Adidas still relied
on its e-commerce website to upload posts relating to fitness, workouts, health diets etc, to keep its
consumers updated. All of Adidas retail shops were forced to close, however, their website was still
operational at the time, accessible for customers to ask for advice, inform the business about a
recent complaint and purchase goods, the website was available in over 50 countries. However, as
adidas continues to invest in digital technology and on its e-commerce website the idea of Adidas’s
retails stores becoming obsolete slowly becomes into reality because less consumers would be
willing to go out to purchase goods whereas they can purchase goods and get it directly delivered to
them, this will reduce the sales generated by retail stores which will turn franchising into a loss of
investment as Adidas will no longer have a physical presence in the market if they continue to
become more reliant on their e-commerce and Directly to consumer (DTC) technology.
P7
Definition of innovation and enterprise
Innovation: is the act of introducing something new to a company—whether it’s a new product, a
new market strategy, a new method, and so on—in order to reinvigorate the company and promote
new value and growth.
178
,Jasper Sobande Unit 1 Task 1
Enterprise: is a term used to describe businesses and organisations that seeks to make profit
Types of innovation
Radical innovation: is an idea or invention that destroys or replace an existing business model. It can
occur due to a complete change in a company's positioning, work method, processes, services, and
products offered, or how it relates to customers
Incremental innovation: are changes to a product, brand, or service without making major changes.
It can be an idea or product that was already implemented by the brand that complements and
offers improvements either to employees or consumers.
Disruptive Innovation: is the process by which a product or service is offered to affordable for
consumers with low income which makes it less expensive and more accessible to the market.
Sustainable innovation; are modifications to a company's products, services to achieve long-term
social and environmental benefits while also generating profit.
Types of Enterprises
Sole trader: Sole trader: is when you own and operate your own business by yourself which allows
you to keep all profit made after tax.
Partnerships: usually consist of a small number of individuals who share ownership and decision-
making (as well as profits) in a business.
LTC (private limited company); is a type of business that is inherited by a family member or owned
by a government.
PLC (public limited company); is a business that makes its shares available in the stock market for
members of the public to purchase. Individuals who have purchased these shares are called
shareholders who own part of the business and contribute to decisions making.
The importance of innovation
• Innovation allows your business to grow because it to improve productivity, reduce your
business expenses and makes the business become more profitable. In 2022, Adidas
predicted strong growth to occur this year even though there has been a rapid decline of
sales in the Russian market due to political reasons. Sales are expected to grow by 11%-13%
as the demand for Adidas’s innovative goods remains robust, this is an example of
Innovation increasing a business growth despite major setbacks.
• Innovation can help you take advantage of new technologies: because technology is always
evolving which means that there may be new, more efficient methods and opportunities to
make better products, to offer your services, and to market your business. For example, the
high-performance footwear produced under the adidas 4D concept features midsoles, is
crafted with light and oxygen using Digital Light Synthesis, a unique technology developed by
Carbon. With modern technology, Adidas was able to make profit because the products
launched accounted for over 77% of brand sales. They have produced more than 100,000
pairs using this type of technology in 2018 and have continued to increase its volumes in
2019 and intend to further expand production in the near future to overtake Nike to become
a global market leader.
• Innovation also helps you stay ahead of your competitors: because markets are always
evolving, this forces businesses to adapt to changes such as changes in prices which makes it
179
, Jasper Sobande Unit 1 Task 1
harder for smaller business to survive compared to bigger businesses who have more
resources and funds to do so. Despite this innovation can be used to differentiate a business
product from their competitors by offering unique features that are made from high quality
materials to gain competitive advantage. In 2015 Adidas announced that they will move
closer to fully recyclable performance sportswear following the release of with the release of
“Futurecraft Loop,” a first-generation, one-material running shoe made entirely from ocean
plastic.
How do businesses innovate
Generate new ideas: Businesses often seek for chances that their competitors haven't yet taken and
assess how useful it would be to society and whether it meets customer wants.
Experimentation: Before delivering a product or service to the market, it's critical to figure out what
works and what needs to be improved.
Marketing: Companies must choose when the best moment is to release their goods, which is
normally done as part of their marketing effort.
Follow-up: It's critical to keep track of what's been done in order to understand public acceptance,
audience, and strategy. Consumer feedback is critical to accomplishing this.
Why do businesses need to expand through enterprise
Expanding into new markets can help your business establish a presence in locations where there is
a particular need for your product or service. This can help to reduce the effect of saturation and
tough competition in your existing market. Adidas originally established its business in Europe but
expanded to the North America and China markets to establish their presence there to compete
with Nike for market share.
What are the benefits of innovation:
Keeping procedures organised: You can develop standards and systematise the ideal work approach
for your brand by being imaginative in how you do activities, especially if you employ technology.
And this is critical for the success of strategies, the achievement of results, and the attainment of
objectives. Adidas uses innovation to improve its policies to guide employees and represent what
Adidas beliefs are such as their social responsibilities.
Better quality: innovation allows businesses to offer better quality products and services that are
more likely to meet customer needs and expectations. Adidas offer its products that are made of
high-quality materials to improve consumers performance in physical activities.
Unique Selling Point: Effective innovation is a great way to establish a unique selling proposition for
a product – something which the customer is prepared to pay more for, and which helps a business
differentiate itself from its competitors.
Creativity enhancement: With innovation, businesses like Adidas allows employees to express their
ideas that can be used to expand its product range and use various of methods on how to engage
with its consumers such as Twitter, Instagram and Facebook.
Increasing the competitiveness of the company: A corporation achieves a competitive advantage in
the market by implementing strategic resources such as Adidas membership scheme, which make it
more appealing to consumers to contribute to the business activities.
180
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller thelegend2. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £8.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
51683 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 15 years now