What Can Your Company Adopt from Adidas’ Post-Pandemic “Own the Game” Business Plan?
written by Jahnvi Patel, MAZURKRAEMER LAW CLERK, Villanova School of Law, JD/MBA Candidate
In the aftermath of the pandemic, as a result of changing consumer preferences, Adidas AG is restructuring its distribution operations through a new 5-year strategic plan called “Own The Game”. Own The Game is meant to strengthen the credibility of the Adidas brand, create a unique consumer experience, and continue to expand the company’s activities in the area of sustainability through its e-commerce activities. What can your company adopt from this strategy?
Adidas officially announced the Own the Game strategic plan in 2021. The plan puts the consumer at the center of everything and serves an an integral part of Adidas current quality culture. Adidas hopes Own the Game will enhance brand credibility, elevate the consumer experience, and push the boundaries of sustainability.
“We are delighted to be deepening our partnership with Foot Locker as we continue to execute our ‘Own the Game’ strategy,” said Adidas CEO Kasper Rorsted. “Consumers will be at the heart of this exciting collaboration and will be able to experience the Adidas brand and its key product franchises, as well as new product innovations, at Foot Locker, stronger than ever before.”
In order to enact their purpose, mission & attitude, the Own the Game strategy puts the consumer at the heart of every decision at Adidas. Adidas identifies four (4) of its strategic areas – diversity, equity & inclusion, leadership, betterment & performance.
- DEI. Adidas hopes to eliminate barriers by giving all employees the opportunity to perform at their best, be consistently & fairly developed, & be recognized and rewarded for their efforts.
- Leadership. Adidas views leaders as role models. Cultural role models are those that emulate the company’s values & often leave a lasting impact on the organization. Here, Adidas focuses on empowering their employees to realize their own possibilities. Adidas achieves this by growing all employees & giving them learning opportunities whether they are line managers or executives.
- Betterment. Betterment relates to leadership through Adidas value of continually learning & improvement. Adidas allows employees to seek betterment for themselves through offering a wide range of learning & development opportunities. These include interactive learning experience & resources such as training seminars.
- Performance. Adidas believes performance comes from a team’s ability to support, challenge, and cheer each other on. First, to drive performance, Adidas gives out recognition rewards & continual feedback, allowing employees’ voices & opinions to be expressed. These recognition awards can be seen as cultural transmitters which are vehicles by which the company’s culture is passed down through generations. Second, Adidas rewards its employees through compensation, benefit & incentive programs they refer to as “rewarding for performance”. This comprises of a variety of rewards including monetary & non-monetary ones
Necessarily so, Adidas is engaged in an aggressive battle against mighty opponents like Nike and Under Armour where most players are aggressively investing in digital technology to achieve higher market penetration, wider customer reach and a superior customer experience. This gives Adidas the motivation to use Own the Game to drive sales and profitability higher. Sales growth, around 96%, is expected to come from five key categories: Football, Running, Training Outdoor and lifestyle.
Digital Transformation. Apart from customer experience and customer relationships playing a key role in helping the company expand its market share faster, a key focus of the plan will be the digital transformation of the company. The company will invest heavily in strengthening its e-commerce operations as it expects the Direct to Consumer channels to account for a substantial part of the company’s revenues in the coming years, i.e., around half of its total net sales by 2025. The e-commerce channels will also drive above 80% of its targeted top line growth.
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INCORPORATION BASICS: What Is an S-Corp and How Do You Form It?
Written by: Mazurkraemer Law Clerk Jahnvi Patel – Villanova School of Law, Class of 2024
An S corporation is a tax designation for which an LLC or a corporation can apply which elects to pass corporate income, losses, deductions, and credits through to its shareholders for federal tax purposes. S corporation shareholders report any flow-through of income and losses on their personal tax returns and are assessed tax.
The overall benefit for the owners of S corporations is that they are considered employees of the business entity and thus are exempt from paying self-employment taxes. For example, as the owner of the S Corp, you can pay yourself a “reasonable” salary” on which you are taxed through payroll; additional draws are taxed as ownership distributions.
The requirements for an S Corporation are:
- Be a domestic corporation.
- Have only allowable shareholders.
- May be individuals, certain trusts, estates and
- May not be partnerships, corporations, or non-resident alien shareholders.
- Have no more than 100 shareholders.
- Have only one class of stock.
- Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations).
Once a small business fulfills the requirements for an S Corporation, the process to become an S Corporation in Pennsylvania is as follows:
- Prepare a PA docketing statement.
- A supplemental form that is most often filed when creating a new business entity (such as an LLC or corporation) in Pennsylvania. The PA Docketing Statement is like a cover sheet that should be included in your submission package when you file with the PA Department of State.
- To create a valid corporation, a small business must file an article of incorporation with the secretary of state and pay the filing fee.
- This includes the name of the corporation, which should also include either the full word or abbreviation of “limited,” “company,” “incorporated,” or “corporation.”
- The number of shares of stock that the corporation can issue, the corporation can have no more than 100 stockholders. Only individuals can hold stock, and the corporation can only issue one class of stock.
- Include the addresses and names of the incorporators, the registered agent, and the address of the registered office
- Include the address of the major office as well, if it’s different from the registered office.
- Apply for an employer identification number (EIN) through the Internal Revenue Systems (IRS) website.
- Prepare the Initial board resolution to authorize the President of the business to open a bank account to do small business transactional matters and fill out a corporate formation document with the bank.
- Fill out Form 2553 with the IRS and must be signed by all shareholders.
- Create bylaws that are adopted by the corporation’s directors during the first board meeting.
- This can be done through self-help resources or through hiring a lawyer within your state to draft them for you.
- Draft a shareholders’ agreement
- This is an arrangement among a company’s shareholders that describes how the company should be operated and outlines shareholders’ rights and obligations, its intention is to make sure that shareholders are treated fairly and that their rights are protected.
- Create a form of Stock Certificate.
- A physical piece of paper that represents a shareholder’s ownership in a company.
- File the documents either through mail or fax a copy to the IRS. The IRS will notify you whether or not the IRS accepted your election within 60 days of filing.
An S Corporation is suitable for entrepreneurs who anticipate having several employees and who may or may not want to eventually have multiple shareholders. Consider working with a local business attorney like Mazurkraemer who can advise you through the process.
Sources:
S Corporations
https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations
What Is an S Corporation? The Beginner’s Guide
SVB Financial Files for Bankruptcy Under Chapter 11
Written by Jahnvi Patel, MAZURKRAEMER LAW CLERK, Villanova School of Law, JD/MBA Candidate
The case is SVB Financial Group, 23-10367, U.S. Bankruptcy Court for the Southern District of New York.
On March 17, 2023, Silicon Valley Bank’s (“SVB”) parent company declared bankruptcy, easing the sale of its remaining assets after federal regulators seized the technology-focused bank at the heart of its business. SVB Financial Group filed for chapter 11 bankruptcy protection in New York on Friday, the largest bankruptcy filing resulting from a bank failure since Washington Mutual Inc. in 2008.
According to court filings, SVB Financial has $3.4 billion in debt and manages approximately $9.5 billion in other investors’ money across its portfolio of venture capital and credit funds. Silicon Valley Bank was SVB Financial’s largest asset, accounting for more than $15.5 billion of the company’s total assets of $19.7 billion.
At a bankruptcy court hearing, SVB Financial Group and the federal regulator that closed its Silicon Valley Bank unit indicated that a fight is looming over $2 billion in cash seized along with the lender. SVB Financial, which declared bankruptcy, claimed in court papers that the Federal Deposit Insurance Corporation took “improper actions” to cut the parent company off from cash held at its former subsidiary, which regulators seized to prevent a national bank run.
Because Silicon Valley Bank is a California-chartered commercial bank and a member of the Federal Reserve system, it is ineligible for bankruptcy and has been placed in receivership by the Federal Deposit Insurance Corp. However, its parent company may file in order to protect its remaining assets and work on repaying creditors, including bondholders.
The court-supervised process will be used by SVB Financial Group to evaluate strategic alternatives for SVB Capital, SVB Securities, and the Company’s other assets and investments. This process is being led, as previously announced, by a five-member restructuring committee appointed by the SVB Financial Group Board of Directors. Centerview Partners LLC is assisting the restructuring committee with the strategic alternatives process, which is already underway and drawing a lot of attention. Any sale will take place through the Chapter 11 proceeding and will be subject to court approval.
“The Chapter 11 process will allow SVB Financial Group to preserve value while it evaluates strategic alternatives for its prized businesses and assets, particularly SVB Capital and SVB Securities,” said William Kosturos, SVB Financial Group’s Chief Restructuring Officer. “SVB Capital and SVB Securities will continue to operate and serve clients under the leadership of their long-standing and independent leadership teams.” Mr. Kosturos continued, “SVB Financial Group will continue to collaborate with Silicon Valley Bridge Bank.” “We are committed to finding practical solutions to maximize recoverable value for both entities’ stakeholders.”
The stock of SVB Financial has been suspended for the past two weeks. The company’s March 8 disclosure of significant losses from securities sales and a planned stock offering shook the financial sector, fueling investor concerns about regional banks. This month, Silvergate Bank and Signature Bank both failed. Eleven major U.S. banks pledged $30 billion in total uninsured deposits to First Republic Bank FRC, -1.36% on Thursday in an effort to avert a second collapse.
Sources:
mazurkraemer.wordpress.com 