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Pestle analysis is an important framework for companies like Adidas to understand market dynamics. Let us start the Adidas PESTLE Analysis:

Pest analysis also known as PEST analysis is a marketing theory term. The concept is also used as a tool to track environments where companies are launching or planning new projects/products/services etc.

§  INTRODUCTION 

The pastel analysis of Adidas. Adidas is a German global multinational sports equipment hardware and footwear company. Adolf Dassler is the founder of Girder Dassler and founded the brand in July 1924. Adidas was born on August 18 1949. Adidas is headquartered in Herzogenaurach in Germany. Adolf Dasslers two sons worked together. The father’s company They separated in 1947 and founded their own company; Adidas and Puma. Later they became fierce competitors in the sports industry. Some of the main products of adidas are eyewear hats headbands and bracelets running shoes hoodies basketball shoes yoga pants soccer shoes sportswear t-shirts sportswear and jackets. According to one estimate the company employs around 59533 people in its stores worldwide. Some of the major competitors of Adidas are Fila, Converse, Callaway Golf, New Balance, Under Armor, ASICS, Puma, Lululemon Athletica, VFC, Nike, and Victoria’s Secretes. Today, we’ll discuss the pestle analysis of Adidas, how macro-environmental factors impact the world’s leading sportswear brand. If you want to learn about the internal factors of the company, check out the swot analysis of Adidas. Here’s the pestle analysis of Adidas

§  POLITICAL FACTORS IMPACTING ADIDAS

IMPORT/EXPORT TARIFF BY TRUMP ADMINISTRATION

If you doubt that Adidas is a German multinational it has nothing to do with the conflict between the US and China. As we all know USA is the biggest market for Adidas sporting goods. The Trump administration is a nationalist government pursuing protectionist policies. The Trump administration has imposed tariffs on all products made in China. Adidas products are made in China. When a company exports products to China Americans see them as made in China. This means that brands have to pay more taxes

§  SUPPLY CHAIN REGULATIONS

Adidas is a global multinational brand whose products must be distributed across the borders of different countries. Every country has different supply chain policies and international trade laws. If companies do not address the complexities of their supply chain systems it will adversely affect their profitability

§  . GOVERNMENT LAWS

Government regulations vary from government to government. Factors such as terrorism nationalism patriotism low acceptance of rigid social systems and extremism played an important role. These factors explain the country’s stability and business environment. If it is harsh and nationalistic there is room for outsiders

§  . ECONOMICAL FACTORS AFFECTING ADIDAS ECONOMIC RECESSION-PANDEMIC

The global COVID-19 pandemic and business closures have sent the global economy into recession. As 2020 ends and 2021 begins companies are not operating at full capacity. Adidas is a financially stable brand but its annual sales and net profits have declined sharply. According to a report by macrotrends.net, the annual revenue of Adidas was 22.63 billion dollars in 2020. Out of which the net profit of the brand after minimizing all the expenses was 0.529 billion dollars. In 2020, the annual revenue and net profit of the brand decreased roundabout 12.83% and 75.31%

Economic Factors:

Below are the economic factors in the PESTLE Analysis of Adidas:

The entire sports industry’s revenue share is very concentrated with 50 largest companies contributing to around 70% of the total industry’s revenue.

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§  EXCHANGE RATE

Adidas is a German brand and trades with neighboring European countries in euros. Contracts are in USD when it comes to international trade and company manufacturers in Asia. This happens often. The company has to deal with different exchange rates every day Economic stress and other conditions such as epidemics cause the exchange rate to be unstable. Even a small difference between the USD and EUR exchange rates can make a big difference when you multiply it by millions.

§  LOCAL ECONOMIC ISSUES

§  Sportswear brand Adidas operates worldwide. Interest rates inflation rates unemployment rates and many other factors vary from country to country. These economic issues play an important role in affecting the purchasing power of consumers. When people have less purchasing power they spend less. Declining sales meant the company was making less profit. This is what has happened in the past few months during the pandemic

§  . LEISURE PRODUCT

There are two types of products. Necessities and leisure. Exercise and exercise aren’t for everyone. Only the rich and wealthy can afford luxury training and sportswear. Not necessarily lower middle class or working class. It is a casual product but people’s attitude towards it is also casual. This is why sales of activewear products have declined during the pandemic because people have not considered its necessity.

§  COUNTERFEIT ISSUE

Adidas CEO Rosette said in an interview that the 10% market for Adidas products in Asia is fake and fake. There are many third-party sellers in Asia who produce low-quality products and sell them at high prices using the Adidas logo. Customers are willing to pay more when they see the adidas logo.

§   SOCIAL FACTORS IMPACTING ADIDAS HEALTH-    CONSCIOUS CUSTOMER

In the last few years people have started realizing the importance of health and fitness activities. Today people participate in various types of health and fitness clubs such as golf gym runs and other exercises. When they do this, they need training shoes and clothing and this is where adidas products come into play and their profits for the company. Due to the epidemic and lockdown people are confined at home. When things return to normal, they go outside and start outdoor activities.

§  YOGA PANTS TREND

The culture of yoga and finding inner peace has grown in recent years. A materialistic lifestyle has made people feel that something is missing in their lives. That is why many people join yoga clubs. You have to buy yoga pants for that. Adidas already offers yoga pants.

§  NO OUTDOOR ACTIVITIES

Lockdown and bandh have confined people to their homes. Many people have lost their jobs due to this epidemic. They only reduce the prices of necessities. This means a reduction in their sports budget and sportswear.

§  COMMUNITY SUPPORT PROGRAMS

The adidas brand cares about our communities and the people we do business with. The company has initiated several social assistance programs to improve the health and well-being of its communities

§  . INVESTMENT IN THE OLYMPIC GAMES

Adidas sponsors international sports events to attract the attention of fans. The brand is estimated to have spent around £100m on the 2012 Olympics. It turned out to be a very profitable investment for the company. Thus, the brand was able to increase its sales.

§  TECHNOLOGICAL FACTORS AFFECTING ADIDAS 

§  ADAPTING TECHNOLOGY

In times of rapid research and development when new products need to be launched every three months or every year. Otherwise, your competitors will gain a competitive advantage over you. And little by little they will drag the whole market under your nose. You need to keep up with new technology trends in the market. It is good that Adidas is always up to date with the latest technology and it is one of the main reasons the company is growing.

§  SMART TECH RAW MATERIAL

Many researchers are working on developing technological raw materials. This reduces waste and sportswear companies can reuse the same materials over and over again by melting them down. If Adidas could somehow develop a new synthetic material, it would be a huge advantage for the company.

§  ECOMMERCE RETAIL PLATFORM

Pandemics and business closures have brought awareness to the importance of e-commerce sites and online retail stores. Adidas already has an e-commerce platform. It’s not at the level of brands like Nike Amazon or Walmart. Companies should use this opportunity to their advantage.

§  TESTING METHODS

Adidas is known for being a quality-conscious brand. Before launching sportswear products into the market companies thoroughly check their products with sports professionals and trainers. The company’s products are designed to enhance the performance of athletes.

§  LEGAL FACTORS IMPACTING ADIDAS 

 LOSING TRADEMARK

With the logo of the three parallel stripes and the Adidas brand the company lost a classic battle in the Supreme Court of the European Union. The company was unable to satisfy the court that customers would identify with the 3-line logo. For that very pain. After losing the trademark the trademark may be more vulnerable to counterfeiting in the international market.

§  PATENT RIGHTS

§  Adidas owns the IP system and intellectual property rights. This allows companies to reduce the risk of counterfeit designs and infringements. Product fraud is very common in the sports industry. Patents and legal protections help businesses reduce risk.

§  SPONSORING EVENTS & CELEBRITIES

Adidas has a history of hiring celebrities and athletes as a brand ambassador for the promotion of its products. When certain celebrities and fans join any organization, they bring millions of their fans along with it

§  ENVIRONMENTAL FACTORS IMPACTING ADIDAS 

§  LOW WASTE PROGRAM

Adidas claims that not all of the company’s manufacturing units produce limited and environmentally friendly products. The company has launched several low-loss projects such as the Future Craft Loop Parlay for the Ocean Adidas Bio-Steel Fiber and Sports Infinity Formation Technology Dyeing Process. All of these schemes aim to use petroleum-based plastics that reduce carbon emissions and produce leaner more efficient products.

§  ADDIDAS GLOBALIZATIONS STRATEGIES

ADDIDAS IS A GLOBAL ORGANIZATION Let more people know that Adidas is adidas at it uses the localization concept of global brands to meet the needs of consumers and implement strategies in a highly competitive market. Sports market. Adidas is also well aware that its customer centric structure is unique in the industry which gives adidas Group a competitive advantage.

Consumer purchases and brand perception in the sporting goods sector are linked to market-leading technology and cutting-edge design that captures the consumers imagination. Adidas is therefore committed to ensuring that its product line is full of exciting new designs and technologies. Develop a leading position in all major markets to develop a leading position Adidas targets regional markets to select consumer groups set targets for each area and implement various promotional activities. Read how surveys about hobbies and purchases can help manufacturers. For example, in Europe Adidas expanded its leading position by focusing on key categories such as football and running. In North America the goal is to significantly increase market share and profitability in the three futures. up to five years. In Asia Adidas tried to generate more than $2 billion in sales in 2008. In Latin America. Adidas will continue its strong top-line growth over the next three years by improving efficiency and profitability. Read about the impact of technology on the Profession Chatter number Adidas Group. uses cookies to give you the best for the sustainable health you drive

Adidas motivation

We are committed to rewarding our employees with compensation and benefits packages that are competitive in the employers market of performance-based reward systems that reward selected employees. The foundation of the compensation program is a global compensation management system which is used as the basis for establishing employee status and compensation value in a market-based and performance-based manner.

In addition to the fixed basic salary, we offer our employees a variable salary bonus scheme: we have implemented a universal bonus scheme with 2 points for their performance to participate in the success of our staff!

§  CONCLUSION 

After doing an in-depth research on the Adidas Pastel Analysis we realized that this company is well positioned in the market. Macro-environmental factors such as counterfeit patents and intellectual property pose a greater threat. Sports brands should address this to minimize risk.