Please write as per the
attached requirements.
Deadline: 18th April;
4 pm PST Sharp
Assignment
Prepare a report on
inventory management and terms of buying for a particular retail organization
in the UAE.
You are required to
select a retail organization for this study and get it approved by the teacher
(through mail/telephone/in person )
The indicative content
list of the report are as following:
Merchandise variety details
Kinds of inventory
Inventory management techniques used
Major buying locations and items
Terms of buying
Emerging trends in buying
Critical evaluation
Please submit the
assignment (properly arranged with assignment cover sheet ) on or before apr1l
11, 2019, positively. Please note that before the final submission, a soft copy
must go through Turnitin checking for plagiarism.
The total no of words
should not be less than 1500.
Lo3: evaluate various
kinds of inventory management and terms of buying from vendors. (15 marks )
If you have differences, you are required to
use APA referencing style.
Solution
Inventory Management at Adidas
Variety Details of Merchandise:
Adidas
is one of the biggest retailers to
sneakers in the UAE market, a huge number of people using their products.
They are offering different sportswear,
including shirts, shoes, pants and outerwear,
base layer, eyewear, and other accessories. They are offering for both men and
women equipment; brand recognition is a reason behind their high market share (adidas.ae, 2019) . The target market
of the company is the young generation. The brands introduce innovative items
for keeping the consumers engaged. Moreover, social media channels are used for
maintaining communication with consumers.
Kind of Inventory
Inventory:
Inventory is mainly considered as
a finished good which the company accumulates before selling them to customers.
But it also describes the raw material which is required in the manufacturing of products. Inventory turnover
for Adidas, together with its
subsidiaries, designs. The company's recent turnover is 6.6x, Adidas' inventory turnover its four years low in Dec
2015. Their turnover peaked in 2018.
Inventory management techniques
Technology has made it easier for
companies to manage the inventory. Adidas
is also a prominent brand in the market;
thus, it needs to manage the inventory effectively to keep up with the pace of
consumer demand. Most recently, it has adopted the GT Nexus cloud for dealing
effectively with the challenges of inventory. With the help of this software solution, the company can easily check the
stock of raw material. By keeping track of
raw material, it can easily be predicted how much more is needed. The track of
finished goods is also kept.
Moreover, the company is
experimenting with the NFC (near field technology) for developing closer relations
with the consumers. With this new technology,
the company intends to expand its tactics
across various other products. NFC can easily be entrenched in smartphone
technology. All the data which will be collected by NFC interaction will
facilitate the company in the process development of innovations (hbs.org, 2017) .
In the year 2014, the company was
facing an intense challenge from its big
competitor Nike just because it was unable to manage the inventory effectively.
However, now due to the implementation of
the latest technology, it can manage the capacity and create value for the
consumers. In recent years due to
effective capacity management, the
company can gain leads in various regions
like China and America. Moreover, in the Asian region as the economy of
developing countries is improving, and the financial condition of the people is
improving due to which they are attracted to buy branded goods. These countries are a potential opportunity for the company to improve its sales.
Major buying location and items
The
trend of online buying has increased, and
the company is offering its products both at online platforms and physical
stores. For instance, there is a big store of the company present in the Dubai mall. Moreover, the online retailer
stores like Souq.com the items of the company
are present from where the consumers can buy it. The consumers can also order
the products from the official website of
the company and obtain the item at their doorstep.
There
are a variety of items which are offered
by the company such as men and women shoes, shirts, nite joggers, sports
clothes and jerseys. The company also offers accessories. The consumers can buy
the products which they like the most.
Emerging trends in buying
Over
time the technology is improving; thus that the trends and buying patterns are
also evolving. There are following some of the key trends which are common in
the market:
Generation Z
Currently,
millennials are ruling the market. This generation was born between the mid-'90s. The oldest people in this generation
in their early 20s, while the younger are just teenagers. However, the focus of
marketers is on the older customer segment. These people are gaining more and
more buying power.
Additionally, they are fond of using the latest technology for a variety of purposes, even
for obtaining the information and also buying new
things. According to recent research, around 57% of the Z generation, the consumer
prefers online shopping instead of
visiting a store. These are potential consumers for the companies because most
they have around $29 to 143 billion in direct spending. It is anticipated that
by the year 2020, they will become the largest generation of consumers (forbes.com, 2018) .
Brand Culture
The
companies are using the latest digital and social media channels in a very
smart manner due to which they are successful in building a strong relationship with the targeted
consumers. The companies have established a strong
emotional connection with consumers. Due to collaboration
and constant communication, the brands
have become cultural figures. Now the customers are shopping the things with
their emotions instead of their wallets. This is
all happening due to millennials. They are making unique choices, and their attitude has shaped how the retail
are positioned in the market. The brands are forced to collaborate with their
external culture with the exterior identity.
E-commerce Shipping
E-commerce
marketing is gaining popularity in
shopping. According to the recent report in the year 2018, the e-commerce
sector expanded by 11.4%, and it is
anticipated that in the year 2019, further improvements will take place. Almost
all the major brands have an online
presence, including Adidas, Amazon, and
Walmart. Even recent research has
highlighted that Adidas is focusing on the establishment of its online stores
instead of working on physical stores.
However, the shipping trend has changed (forbes.com, 2018) . Previously the consumers were being
offered the free shipping options in the 5.5 days, but now with the changing trends,
this number has been dropped to 4.5 days. Even Amazon has cut down the shipping
days to only two working days.
E-commerce Subscription
E-Commerce subscription options are increasing.
The consumers are evaluating the options which provide the tailored buying
options, and they can get the preferred
products at their doorstep. The sector
has expanded from $57 million in 2010 to $2.6 billion in the period for just six
years. Discount offers are made to the consumers to improve the impulse buying
behavior among them.
Critical evaluation
Adidas
is one of the most famous brands which is working almost all across the globe.
The company uses innovative ideas to attract consumers.
It could be said that the company is doing very well in keeping the consumers
engaged. For instance, it is focusing on establishing online retail stores because the trend of online buying is
increasing. The potential consumers of the company
are the young generation who use the latest technology and a variety of devices for obtaining the information and then purchase
the item.
Moreover,
the company is doing a good job of managing
the inventory for maintaining the supply-demand. The company has not adopted an
aggressive lead strategy for managing capacity.
Instead, it could be said that it is
using lag strategy in which real-time
demand increases the company's production capacity. It is a smart move in
comparison to its main competitor Nike which used lead strategy in the Asian market as the company was expecting
increased demand. However, nothing like this happened due to which it faced an extra burden on the budget. It highlights that the company was unable to analyze and
forecast the market trend due to which it faced the problem (businessinsider.com, 2016) .
By smart inventory management, the company can
improve its online presence and expand in the new markets. For instance, most
recently, the company has launched its
official app for smartphones. By
installing this app, the consumers can have tailored experience. The app learns
the preferences and choice pattern of the user; then, according to their choice,
they are given specific options. Moreover, it provides easy access to online
purchasing of the items (adidas-group.com, 2017) .
Social
media is being smartly used by the company, which highlights that it is doing a
good job of keeping the consumers engaged. According to the most recent
research survey, Adidas is the most
visible brand on most of the social media platforms. The logo image of the
company was shared by 6.6 million times. Nike is also following closely (worldtrademarkreview.com, 2018) .
Conclusion:
It can
be concluded that smart inventory management is necessary for the proper growth
of the company. If inventory management
is poor, then profit margins decrease for
the company, and it is unable to invest
in new ideas. Adidas is a global brand, and
the company is using a smart approach for
inventory management. Most recently, it
is investing in the establishment of online retail stores because the trend of online buying is increasing, and the
company is using social media as the key tool for communicating with the
consumers and also luring them to buy the products. If this continues in this manner, then there are chances that the company can leave Nike far
behind and become number 1 in the sports
market.
Bibliography
adidas.ae. (2019). Adidas. Retrieved from Adidas.ae:
https://shop.adidas.ae/
adidas-group.com. (2017). ADIDAS EXPANDS DIGITAL
PRESENCE AND LAUNCHES NEW ADIDAS APP. Retrieved from adidas-group.com:
https://www.adidas-group.com/en/media/news-archive/press-releases/2017/adidas-expands-digital-presence-and-launches-new-adidas-app/
businessinsider.com. (2016). Nike is facing
unprecedented headwinds. Retrieved from businessinsider.com: https://www.businessinsider.com/nike-is-facing-problems-2016-6
forbes.com. (2018). 4 Sales Trends That You Need
To Know About In 2019. Retrieved from forbes.com:
https://www.forbes.com/sites/lilachbullock/2018/12/03/4-sales-trends-that-you-need-to-know-about-in-2019/#7c46c33c2857
forbes.com. (2018). 5 Trends That Will Redefine
Retail In 2019. Retrieved from forbes.com:
https://www.forbes.com/sites/jiawertz/2018/11/28/5-trends-that-will-redefine-retail-in-2019/#36969ee36526
hbs.org. (2017). Adidas Speed Factories: the
quest for single-day lead times from concept to consumer. Retrieved from
hbs.org:
https://rctom.hbs.org/submission/adidas-speed-factories-the-quest-for-single-day-lead-times-from-concept-to-consumer/
worldtrademarkreview.com. (2018). adidas and Nike
revealed as most visible brands on social media platforms. Retrieved from
worldtrademarkreview.com:
https://www.worldtrademarkreview.com/brand-management/adidas-and-nike-revealed-most-visible-brands-social-media-platform
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