PESTLE Analysis of Adidas | Adidas PESTLE
In the sporting goods market, Adidas is a well-known brand. They offer plenty of products to health-conscious sporty people. But, the fact is that its products are not essential for health-conscious people. In third world countries, the company has faced huge criticism for its products. In this Pestle analysis of Adidas, we will discuss some important strategic factors and rules and regulations of Adidas. Scroll down to learn these important factors:
PESTLE Analysis of Adidas | Adidas PESTLE
Political Factors of Adidas (Many Systems):
Adidas is a worldwide brand and delivers its products in every region. It requires a strong and effective supply chain network within the political system of every country. It has a strong online presence and earns major revenue from e-commerce. Moreover, Adidas also utilizes political systems of interference of counterfeit items. Each country has a specific taxation system, so it is necessary for Adidas to follow these rules in order to sell their products internationally. In addition, the company is also focusing on third world countries in order to increase its profitability. In short, it reduces shipping and manufacturing costs. Below, there are some rules that Adidas should follow:
- Product safety laws.
- Employment laws.
- Consumer safety.
- Product regulations.
- Global trade agreements.
PESTLE Analysis of Adidas | Adidas PESTLE
Economic Factors of Adidas (Counterfeit Problems):
It is a fact that the sports goods industry is highly competitive and there are plenty of giants in the market. Nearly, more than 50 biggest companies put in approximately 70 % of the market’s profit and Adidas is one of them. Most of the products of Adidas are considered as leisure items. It means they are not essential users. Most of the sales of Adidas are based on preferences and buyer trends. It is necessary to compare leisure products with different company’s products which gives an opportunity to Adidas to make their offerings effective. Moreover, it is also essential to research before selling and distributing products because this thing ensures growth and profitability.
The main manufacturing hub of Adidas is in China because of the availability of workers and cost-effectiveness. The manufacturing cost in North America is higher than in the Chinese market. Additionally, the company should focus on the cost of materials. The main issue they are facing in this system is importing and exporting goods. There are several counterfeit products in the market that continuously damaging the sales of Adidas.
PESTLE Analysis of Adidas | Adidas PESTLE
Social Factors of Adidas (Health-Conscious Customers):
The company changes the designs of their items in order to catch the interest of customers. You can get any type of sporting goods from Adidas. Adidas is trying to focus on health-conscious people who like sports and outdoor activities. Due to this reason, they should design their products by keeping these factors in mind in order to fulfill the needs of the customers. What is more, is that Adidas also provides corporate volunteer programs. They also help to promote the health of people and support societies. They are a part of the Olympics which gives the company great marketing exposure. This is the best way to grab the attention of new customers globally.
PESTLE Analysis of Adidas | Adidas PESTLE
Technological Factors of Adidas (Smart Sportswear Opportunities):
Adidas occasionally tests their products. Professional athletes used these products, so the company ensures that these products are safe and ideal for users. In this way, these products improve the performance of athletes and coaches. They use natural materials in order to reduce the risk of a nuisance. That’s why its products are durable and great for professional athletes.
Adidas uses online platforms like social media and websites to sell its products. They are immensely popular among athletes and health-conscious people due to their innovative products such as Fitbit. Adidas has a big opportunity to adopt new technologies in order to get a competitive edge over the competitors.
PESTLE Analysis of Adidas | Adidas PESTLE
Legal Factors of Adidas (Patent and More Patents):
The company has possession of IPR (Intellectual Property Rights) and IP systems. They have designed their own patents. Certainly, it helps to defend them against contravention and copiers. In this way, they can effectively fight against counterfeit businesses. As Adidas has a strong connection in the sports world, there are several celebrities and sports professionals who endorse their products which is a great method of marketing. In addition, they follow all the local and international rules to sell their products.
PESTLE Analysis of Adidas | Adidas PESTLE
Environmental Factors of Adidas:
The company is trying to reduce its environmental impact. It is the duty of Adidas to observe and remove harmful substances. They use natural materials in the manufacturing of their products. Moreover, they pursue ethical business practices by following all the rules and regulations of each country in order to sell or manufacture their products. Due to these factors, users and professional athletes love to use its products.
PESTLE Analysis of Adidas | Adidas PESTLE
Conclusion:
Adidas faces huge criticism due to its low wages policy in the third world regions. But, the fact is that the manufacturing cost is really low in these regions. So, counterfeit products are one of the major challenges for Adidas. But, they have design patents to counter these issues. The main target of Adidas is health-conscious buyers. Adidas has a wonderful opportunity to enter new markets with technological advancement.
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