Adidas Micro and Macro Environmental Factors
Following today’s group session we discussed the history of Adidas in addition to reviewing each of our research findings. This included Adidas’s main brand lines, for example;
Adidas Performance
This sector is Adidas’s ‘Sport performance division’ which focuses on delivering their sport foot ware to its athletes. Their main target audience for these sport products are athletes participating in key sporting activities such as ‘football, running, training and basketball’.
(Fashiongear.fibre2fashion.com)
Adidas Original
Adidas Original focuses mainly on the fashion and style on particular products produced within their foot ware range. Furthermore, Adidas promote the famous ‘three stripes’ on well-known celebrities, for example David Beckham, therefore it markets their brand image as being stylish and fashionable.
However, our key task was to study our research we had collected to progress into our marketing audit for Adidas. As a team we collected our information to find out the Micro and Macro environmental factors for our brand.
Macro Factors for Adidas
The Macro environments are factors which are external to the company. This can be a number of effects, for example by using the PESTLE analysis factors can be;
- Political
- Economical
- Social
- Technological
- Environmental
- And Legal
(ARMSTRONG, G., & KOTLER, P.2011)
PESTLE Analysis for Adidas
Political factors within the company are issues such as their employees’ health and safety, in addition to Adidas as an organization ensuring that their employees rights are kept.
Economical issues within Adidas’s organization are the fact that they provide employment within a variety of countries worldwide; moreover to decrease outlay Adidas has agreed ‘manufacturing contracts’ to other countries. Likewise, ‘Labor charges’ to manufacture their products are significantly higher in Germany where the foundation of Adidas was established. Therefore, the majority of factories are based within the Asian region. (Hale,2002)
Social elements that need to be considered within Adidas’s organization are, for example, Adidas sell their foot ware products worldwide; however they need to consider where their highest potential customers are. Within the United Kingdom there are many cities which most of them have local football teams. Moreover within London alone they have several; therefore the United Kingdom has a substantial consumer base. Furthermore, Adidas should take opportunity of this within the football seasons by promoting their products to expand their sales revenue.
Technological equipment should be utilized to the best of its ability. For example, using quality information systems and consistently updating their webpages. By doing this it gives Adidas the opportunity to have efficiency in operations which primarily will improve their overall production. Therefore by doing this it will offer a high standard of customer service, likewise it can keep them in the lead of their market and may even give them an advantage over their competitors.
Environmental issues concerning Adidas are matters such as animal rights. This is because Adidas foot ware is produced from animal skin. Furthermore, as mentioned above Adidas produce their products mainly in China. The main reason for this is because of cheap labor, therefore Adidas need to consider the publicity they will receive.
Legal matters within the company such as adhering to the advertising standards and the sales and supply act. Adidas will need to obey these procedures in order not to be fined.
Micro Factors for Adidas
Whereas the Micro environmental factors are external elements that can affect Adidas, the Micro environmental factors are internal issues that can affect the organization. An effective way of researching all the factors that can influence the company is by using a SWOT analysis. This is a method of strategic planning in which Adidas can calculate their:
(ARMSTRONG, G., & KOTLER, P.2011)
- Strengths
- Weaknesses
- Opportunities
- Threats
(ARMSTRONG, G., & KOTLER, P.2011)
Strengths within Adidas’s organization are that they are highly associated as a leading brand for popular sports around the world.
Weaknesses concerning Adidas as an organization can be issues such as their advertisement agencies are considered not to be at a higher standard as some competitors.
Opportunities are widely available to Adidas; they can take advantage of new technology, in addition to improving their current online business, which will result in demand for higher sales as their products are more easily accessible. Furthermore, Adidas has joined Reebok therefore it opens up opportunities for new business ventures.
Threats that mainly concern Adidas are their main competitor Nike. Nike is the leading brand in foot ware over Adidas and spends a considerable amount more on advertisement than Adidas. Furthermore, Adidas foot ware is considered as expensive therefore the average person cannot always afford their latest product. This has resulted in counterfeit Adidas products being copied.
Blog entry by Emma Hisket 08/02/2013
References
Adidas, Sports Perfomance, Adidas Performance, Adidas Product Performance, Adidas Eyewear, Adidas Watches, Fibre2fashion. [online] Available at: http://fashiongear.fibre2fashion.com/brand-story/adidas/performance.asp [Accessed: 8 Feb 2013].
Adidas, Sports Perfomance, Adidas Performance, Adidas Product Performance, Adidas Eyewear, Adidas Watches, Fibre2fashion. [online] Available at: http://fashiongear.fibre2fashion.com/brand-story/adidas/performance.asp [Accessed: 8 Feb 2013].
Google Books (n.d.) Business Environment. [online] Available at: http://books.google.co.uk/books?hl=en&lr=&id=09uqSNHNT9EC&oi=fnd&pg=PT19&dq=PESTLE+ANAYLISIS+BUSINESS&ots=tguZ_vew56&sig=5rnhoWMOIgkbTUCa61Dj55PuZPM [Accessed: 8 Feb 2013].
Sciencedirect.com (2004) ScienceDirect.com - European Journal of Operational Research - Strategic development and SWOT analysis at the University of Warwick. [online] Available at: http://www.sciencedirect.com/science/article/pii/S0377221703000626 [Accessed: 8 Feb 2013].
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