Political stability is an important factor in any country for Adidas. Political and regulatory risks include potential losses from expropriation, nationalization, civil unrest, terrorism and significant changes to trade policies . In particular the Adidas Group faces risks arising from sudden increase of import restrictions, charges in the taxation system of a country, minimum wage policy, import tariffs and duties that could compromise the free flow of goods.
Economic growth and interest rates are major factors for any economy in the world, if interest rates are too high and keep rising, then the demand for products will fall, as it makes saving more attractive and borrowing more expensive (Babette & Ferrell et. al 2008). Whereas if interest rates are too low, people are encouraged to spend, as saving isn’t attractive. This means that there is more money going round in the economy and makes goods seem cheaper, which is bad for the economy as it causes inflation to increase. This is why it is important that interest rates are stable. Taxation, VAT, Inflation, unemployment and per capita income highly affect the company’s profitability.
Adidas target market comprises of people from different social backgrounds. The Adidas Group is affected by people’s religion, race, culture, education levels, population, gender, buying habits and lifestyle. Different religions like Hinduism, Islam, Christianity, Judaism and many more have different buying patterns and opinions for any products they buy (Wilson 2005). The Adidas Group has penetrated most countries so all these social attributes play very important roles in deciding the company’s strategy. PEST ANALYSIS
Technological advances in things like machinery will have an affect on the Adidas Group. The latest Technology can speed up production, save energy or cut down labour costs. Currently the world has become a small village and the use of the Internet is increasing day by day all around the world, so Adidas needs to make sure that they keep up-to-date with the Internet all the time. It will help customers to buy online, and help it to advertise online and many other things.