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PEST Analysis of Adidas

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Introduction

´╗┐Pest Analysis Political: Adidas should be aware of the political state in the UK and all other countries that they operate in. This is because if the government for the country there operating in is unstable then this may have a bad effect on Adidas decision making. However in the UK there is political situation in which Adidas can depend on. This is down to the fact that there is a democratic situation which Adidas can capitalise on. Because there is a democratic government it means that they are highly unlikely to make any drastic changes which will drastically affect Adidas. This is because if any major changes are made by the acting party then the public may oppose to these change which will eventually lead to the party being voted out at the next election. This means that Adidas now have a firm base that they can begin to work on. The government, in most cases, tend to give companies funding if they set up a factory in a high area of unemployment. An example of this is when Sony set up a factory in Cardiff. However I don?t believe this would be beneficial for a company such as Adidas as the products that they produce don?t need workers that are highly skilled so they tend to manufacture their products outside of the UK where there is no minimum wage. ...read more.

Middle

As a company that operates in more than one country Adidas help out countries massively to decrease the levels of unemployment. This is because every year Adidas take on new employees due to the fact that Adidas is slowly but surely becoming the biggest sportswear company in the world. They also contribute to the GDP and economy of a country. This is because of all the products made and sold in the UK contribute and boost the GDP and Adidas make a large amount of their sales in the UK. Also of all the products sold Adidas customers pay VAT which means the money goes into the government. Also out of all the revenue made in the UK stores Adidas must pay taxes which is a large amount as they earn a lot of money. The economy is also a major factor too Adidas because if there is a recession then this will mean that less people have the money to buy products from Adidas which could result in a major loss in revenue for Adidas. This could eventually lead to Adidas not having enough funding to continue running stores and factories in the UK. This would negatively affect the economy due to the fact that more people would be unemployed meaning they cannot afford to spend money leaving some business without the vital capital they need. ...read more.

Conclusion

This is because of the technological advances in items such as machinery. If they didn?t upgrade their machinery it could mean that Adidas eventually start to fall behind other rival companies because they can?t be as innovative as the other companies. It can also speed up production, save energy and cut labour costs. It can also mean that Adidas can produce products of a higher quality meaning there will be more customer satisfaction. There has already been evidence of advance in Adidas? technology in the form of their sportswear which removes sweat from the body and restricts it. There has also been an advance in football boots as they are producing boots that allow you to kick the ball harder, with more precision and swerve. Adidas must ensure they keep up with technology to better their position in the market for sportswear. Another Technological factor which had been embraced well by the likes of Adidas and Nike is the internet. For example Adidas have introduced a new system where a customer can customise can change and modify all aspects of the footwear they are going to buy. This is a major advance in technology and is an appealing aspect for potential new customers. Customers can also buy Adidas? products on the internet meaning that they can buy products from the convenience of their own home. http://www.theguardian.com/sustainable-business/sustainable-fashion-blog/adidas-worker-rights-china-factory-strike http://www.theguardian.com/world/2015/mar/12/marks-and-spencer-gap-h-and-m-adidas-cambodian-factories-workers-rights ...read more.

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