Pestel on Adidas

Topics: Environment, Adidas, Minimum wage Pages: 7 (2583 words) Published: April 19, 2013
B1076 Introduction to Business.
“Research a selected business or other approved organisation and consider how it is influenced by its contemporary business environment” 12009172

Contents Page

Page 3 - Introduction and political factors

Page 4 - Economical and social factors

Page 5 - Environmental and technological factors

Page 6 - Technological factors (cont) and Legal factors

Page 7 - Conclusion

Page 8 - References

In this report I will analyse how Adidas is influenced by its contemporary business environment. Furthermore, I will portray how Adidas if influenced further by several other factors including social, economic, technological,political and legal factors throughout the company. Adidas is a sports manufacturer founded by German brothers Adolf Dassler and Rudolf Dassler in the 1920s. Adidas products range from shoes and sports equipment to perfume and jewellery. These products an be easily accessed in any major department store, online and individual retailers throughout every big city in almost every country. With the slogan, “impossible is nothing”, Adidas has a vision that includes a passion for sport. They wish to help athletes accomplish their highest performance with every product they bring to the market.

Political factors
Adidas, as expected need to be knowledgeable of the political condition of the UK and all other countries in which their product is sold. Adidas' policy is to limit and monitor dangerous substances to not harm human health or the environment. This is done through the elimination of the PVC making process. Adidas use substitutes such as Polyurethane, ethyl vinyl, silicones and thermoplastic rubber.(Hayouma 2012) Adidas assembles sales tax in states where a sales tax applies. The tax percentage is determined in each state and local organisations based on their shipping address. Tax is taken in on the order total. However, Purchases of Gift Cards are not included.(Luke Deakin 2012a) In addition, Adidas follows all current important employment laws which helps protect and support the rights of employees. However, as Adidas has production facilities throughout the world in countries such as Asia, minimum wage is a major restriction for Adidas as they can demand labour at a completely different cost as they would in countries that do not have a minimum wage. If they could possess labour below minimum wage in the UK they could relieve transport costs to the UK. Which, in effect, would produce more money that would be used on funding new products. Health and safety are extremely important to Adidas, this is demonstrated through their training activities on employment standards and HR systems. Also,Adidas have established teams to help manage and look over SARS in their Asia factory, washing machines and disinfectant stations. (Luke Deakin 2012b).Furthermore, Adidas would not benefit from government subsidies to help unemployment as no specialist skills are required for manufacturing football boots. If the government were to introduce a number limitation on Adidas products imported, only allowing a specific number of Adidas products to be taken into the country each year. Adidas could overcome this simply by situating a factory in the UK and therefore, removing the quota.Resulting in it not being necessary for products to be imported from other countries. This wouldn’t be great for Adidas as the opportunity cost of cheap labour is the sacrifice of sales by abiding to the quota. In effect, both ways would conclude losing money. This would have a negative outcome on their merchandise as Adidas would have less money to promote their product. (Luke Deakin 2012c).Overall, political factors, although, are taken into consideration by Adidas it does not influence their contemporary business environment drastically.

Economical factors
Adidas is a huge multinational company which helps countries to decrease unemployment by increasing every year the number of...
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