The City and State
Macro Environmental Factors: Adidas
The two main macro environmental factors impacting Adidas are legal and socio-cultural. In 2015, Adidas brand faced financial turmoil due to several factors, which led to a drop in its sales (Peterson, 2015). The executives failed to create the products that were supposed to appeal to changing taste of the American customers (Peterson, 2015). Adidas has not been as successful as Nike in signing sports celebrities for endorsements. Nike signed a deal with Basketball superstar Michael Jordan and today the Jordan brand is one of its most profitable subsidiaries. Adidas is yet to achieve that level of endorsement success. Another socio-cultural aspect is the shift in the want of sneakers. Sports sneakers are not only limited to men footwear, people from all age and lifestyles are interested in wearing sports footwear. Environmental factors also play their role in impacting the company’s line of business. There is pressure on manufacturers to make products keeping carbon emissions to the minimum. This year the company announced that it will launch a shoe collection made from recycled plastic (Szmydke, 2016).
In the future, Adidas might face legal issues regarding minimum wage for its workers. Adidas is a German brand and the minimum wage across Europe is quite high compared to what the company pays to the workers in China. Moreover, Adidas lost a legal battle against Puma over the use of ETPU soles (Szmydke, 2016). Adidas used these soles in its NRGY shoes and claimed that it developed the damping material first and Puma brand started to use it on its shoes. Both companies claim that they developed the sole first but neither patented the material ‘expanded thermoplastic polyurethane’, which is quite similar to the Adidas Boost.
References
Peterson, H. 2015. 4 mistakes that led to Adidas' downfall [Online] Available at http://www.businessinsider.com/heres-where-adidas-went-wrong-2015-3 [Accessed 3 July 2016]
Szmydke, P. 2016. Adidas to Launch Shoe Collection from Recycled Plastic. [Online] Available at http://wwd.com/fashion-news/sportswear/adidas-launch-shoes-recycled-plastic-ocean-parley-10410965/ [Accessed 3 July 2016]
Szmydke, P. 2016. Puma Scores Against Adidas in Legal Battle Over ETPU Soles. [Online] Available at http://wwd.com/business-news/legal/puma-adidas-court-battle-etpu-soles-shoes-running-10414158-10414158/ [Accessed 3 July 2016]
