Adidas Swot Analysis

Adidas is a global leader in the athletic apparel and footwear industry. Their commitment to sustainability has been one of increasing visibility and participation. Adidas is a self declared rating through the Global Reporting Initiative (GRI) in 2007. They have taken the approach of being engaged and transparent in their efforts to be recognized as a sustainability leader in the athletic footwear industry. Adidas has taken the initiative of having a working sustainability website that serves as a constant supplement of their corporate social responsibility annual reports.

Adidas have even gone so far as to create a line of footwear and apparel signifying their belief in sustainability. While they have made significant progress in many areas of business sustainability, they still have to make many improvements to establishing significant, long last effects in their production facilities. Adidas is also working to make a stronger commitment to production sustainability by ensuring that their suppliers act in accordance with all regulations in the country that the products are manufactured.

PEST(Political, Economic, Social and Technology) analysis is a framework used in the environmental scanning component of strategic management. Under PEST and PESTLE analysis are external factors which are the major players in the success and failure of an organization. Political factor is the government intervention in the economy. This includes tax policy, labour and environmental law, trade restrictions, tariffs, and political stability. Under Economic factor is economic growth, interest and inflation rates.

These factors directly affect the cost of capital in business operation as well as the costs in exporting goods and the supply and price of the imported goods in the economy. Social factors include cultural aspects, population growth rate, health consciousness and age distribution while trends in this factor will greatly affect the demand for the products. Another factor is Technological where R&D (research and Development), automation, technology incentives and rate of technological change fall in. With its technological shifts, it will affect the costs and quality of the products that will also lead to innovation.

Before creating business plans or making decisions, it is important to 'scan' the external environment. This can be achieved through a PEST analysis, i.e. an investigation of the Political, Economic, Social and Technological influences on a business. In addition it is also important to be aware of the actions of your competitors. These forces are continually in a state of change.
Businesses need to take a pro-active approach and be ahead of these changes, rather than hurriedly making alterations to products and processes in a reactive way.

Political changes are closely tied up with legal changes. Laws are continually being updated in a wide range of areas, e.g. consumer protection legislation, environmental legislation, health & safety and employment law, etc. For example,

“As early as 2005, the adidas Group began an active engagement with international and local NGOs to understand their perspectives on the company's involvement in the Beijing 2008 Olympic Games. These early informal discussions helped inform the company's overall approach and subsequent communication efforts with the wider stakeholder community. Civil society groups in the West were highly critical of the International Olympic Committee (IOC)'s decision to award the 2008 Summer Games to Beijing. Over time, this opposition gave way to a heightened expectation that the IOC and its sponsors, such as adidas, would deliver improvements to the human rights situation in China.
International human rights groups in particular felt strongly that the IOC and the Olympic sponsors should apply leverage to shape Chinese government policy on subjects ranging from press freedom to the release of prisoners of conscience and freedom for Tibet. In April 2008 advocacy turned to protest action, as the Olympic torch made its way through Europe and North America. In China there was an angry backlash to the torch-relay protests and to calls for independence in Tibet, with nationalistic demonstrations in major cities directed against foreign brands.” (http://www.adidas-group.com/en/SER2008/2008-Issues/Stakeholder-issues-Beijing-Olympics.asp)
Adidas need to be aware of the political state of the Beijing,China and also the same for the all other countries where they have bases. As if the government is unstable, or there are any controversial policies, they may have a bad affect on Adidas.
Based on case study above, in the months prior to the Olympic Games, the adidas Group received numerous letters from individuals and organisations concerned about the political situation in Tibet. Some individuals urged Adidas to boycott the Games, others, like the International Campaign for Tibet and the International Support Network for Tibet, asked that adidas openly engage with the Chinese government to stop alleged human rights abuses in Tibet, to inform athletes sponsored by the company about the human rights situation and to raise the question of Tibet with adidas business partners in China.
In adidas responses they shared their concerns about the situation in Tibet, which saw unrest and violence in the spring of 2008. Adidas claimed that they stressed, however, that the question of independence for Tibet is a political issue and that as a company the adidas Group does not involve itself in national politics or political movements.
Other than that, for political aspect in Europe, there is a stable political situation such in UK, as it has a democratic government, a democratic government is one that is decided, by people voting on who they want to run the country. This means that if a dictatorship was to emerge and started making decisions that the public didn’t agree with they would simply be voted out at the next election. This is good for Adidas when operating in the UK, as it is fairly unlikely that the government would suddenly introduce any controversial policies. This will be good for my product as it gives it firm ground to work on.