PEST analysis is being performed to analyze the external environment of an organization or a market.
PEST analysis stands for four main factors of political, economic, social and technological. PEST analysis is ease to use because it is a simple business analytical tool which helps the business analyst identifying and evaluating the external factors / forces that affecting or may affect an organization in the future.
It has been argued that the advantage of this method is its ease to use, as well as a wide range of both qualitative and quantitative factors that interact with each other, While the disadvantage can be attributed to the fact that when using it, the company must systematically trace and also accumulated the reliability of data sources (SHTAL et al., 2018).
I chose to conduct the PEST analysis of Adidas, trying to illustrate the main factors that affecting or could affect the external environment of its business:
Adidas is a multinational company which operates and sells its own branded products all over the world, it is very important to scan and monitor the government’s laws which affect or could affect the business operations.
There are different government’s taxation policies affecting the company’s profit, Adidas management is required to emphasize on the applying of those different tax treatments on its sales and products distribution in the best practice way.
Government’s instability in some of the markets which Adidas is operating in might be one of the risks could be faced, sudden import restrictions which could be applied would affect the business especially if those restrictions applied in a major market. The Trump administration in the United States has increasingly shown a restrictive stance on global trade (Pereira, 2018).
The government enters in to any trade agreements Adidas needs to keep it on track since it may affect the business (Essay, 2016).
As a multinational company Adidas is bind by the following laws:
Product safety laws
Consumer protection regulations
Laws regulating the environment pollution (where Adidas manufacturing plants are exists)
Benefits of the low labors, materials and productions costs as most of Adidas manufacturing plants are located in China, India and the Far East region.
In the third-quarter of year 2017 Adidas sales have been rose by 9%, Adidas reported strong growth in the North America and China markets (sales rose by 23% & 28% respectively, driven by expansion in both markets, where it has been taking market share from archrival Nike (CNBC, 2017).
Adidas continuing the success story of sponsoring a wide range numbers of the football sport events and teams which being watch and cheer by millions of the fans and supporters around the globe, such sponsorships increasing Adidas competitive advantage.
The need of monitoring the impact of currencies fluctuations.
Continues researches and developments to meet the wide variety of consumer’s interests of new designs and leisure.
Positive attitude toward GREEN products, Adidas in the last season and for one round has provided some of its sponsored football teams with kits made out of Oceans Plastic.
Products availability for almost everyone regardless the gender and age.
Adidas reputation providing products quality and customer services.
Offering corporate volunteer programs. Adidas support communities and foster the health of individuals ( HYPERLINK “http://pestleanalysis.com/author/kfrue/” o “Posts by Kiesha Frue” Frue, 2017).
Adidas join into technology by make up the world’s first “smart shoe”, adding a microchip inside the shoe and wireless mp3 player. Adidas uses hot melt system of production which is environment friendly (Essay, 2016).
Using and enhancement of the online store.
Adidas used the technology to come over the athletic problems, such as producing kits with “climacool” and “climalite” technologies in order to make the kits much more breathable and thus reducing the weight of kits during the professional performance level.
Frue, K. (2017) PESTLE Analysis of Adidas Online. Available from: http://pestleanalysis.com/pestle-analysis-adidas/ (Accessed: 24 August 2018).
Pereira, M. (2018) Adidas SWOT & PESTLE Analysis Online. Available from: https://www.swotandpestle.com/adidas/ (Accessed: 24 August 2018).
SHTAL, T.V. et al. (2018) Methods of analysis of the external environment of business activities. Revista Espacios: Revista Espacios digital.
Topics, Sample Papers & Articles Online for Free. (2016) Report on Adidas PEST and SWOT Online. Available from: https://studymoose.com/report-on-adidas-pest-and-swot-essay (Accessed: 24 August 2018).