Vertical Integration

Vertical integration is all about a company's strategy to create more economic value by owning its own supply chain as opposed to paying for someone else to produce the product for them. As a company produces more and more of its product from beginning to end, that company becomes more vertical. 
Adidas has currently switched from its past vertical integration strategy to the outsourcing in production and manufacturing. Most products of the company such as sporting shoes, apparel, accessories and equip,eat are manufactured in the Asian countries. The reason behind outsourcing the manufacturing is the lower cost of raw goods and labor in those countries. Adidas moved production to Asia in the early 1990's to remain competitive in the industry. Although Adidas outsourced its production and manufacturing, the design and development of their products remains in Germany. 

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