In 2017 Adidas was a profitable sportswear company.

Traditionally, Adidas did not produce most of the shoes, apparel, and accessories that it sold.

Instead, the company entered into contracts with independent manufacturers. Adidas also licensed independent companies throughout the world to design, develop, produce, and distribute a selected range of products under its brand name.

Gradually, Adidas started to open its own production facilities closer to its consumers in order to become more responsive to changes in consumer trends and demands. Use the five-forces framework and your knowledge of the sportswear industry to explain Adidas’s high profitability in 2017.