Adidas Swot and Pestel Analysis

This report is representing and discussing the SWOT and PESTEL analysis of Adidas sports’ wear company. Adidas, a German company with roots in Herzogenaurach near Nuremberg, tells a quintessential success story. The work of brothers Adi and Rudi Dassler, Dassler Brothers Shoe Factory focused on creating the best shoe for each sport and was one of the earliest to partner with athletes for promotion and feedback.After World War II the brothers went their separate ways, with Adi forming adidas. 1. 1 Beginnings 1.

In 1920, 20-year-old Adolf Dassler created his first canvas running shoe. His brother Rudolf joined the business in 1924; the Dassler Brothers Shoe Factory in Herzogenaurach, Germany, developed the first soccer and track shoes with spikes and studs. Dassler shoes debuted at the 1928 Amsterdam Olympics and have been at every Olympic Games since. 1. 2 World War II 2. At the 1936 Berlin Olympics, Jesse Owens won four gold medals in Dassler shoes.

By 1937 Dassler was producing 30 different shoes for 11 sports, with almost 100 employees. Hitler co-opted factories for war work; Dassler’s factory produced tankbusting rockets. Post-war, the occupying Americans were among Dassler’s largest customers. 1. 3 Adidas 3.

In 1947 Rudi left to form Puma. In 1948, Adi created “adidas” from his own name and in 1949 introduced the “Three Stripes” logo, forming adidas AG in August 1949. Adidas studded soccer boots, later called “World Champion,” helped Germany win the 1954 World Cup. Present at major sporting events, Adidas was among the first to use athletes for brand promotion. . 4 Domination 4.

Adidas produced bags in 1952 and apparel from the 1960’s. Its first soccer ball was released in 1963. High jumper Dick Fosbury won gold at the 1968 Mexico Olympics with his famous “Fosbury Flop” (and adidas shoes). When Muhammad Ali and Joe Frazier set up 1971’s “Fight of the Century,” both wore adidas boxing shoes. Adi Dassler died in 1978 and his son Horst and Horst’s wife Kathe took over.

Horst, who would go on to establish the brand in France, died in 1987 at age 51. 1. 5 Bernard Tapie 5. In 1989, French investor Bernard Tapie bought adidas with borrowed money.The company incorporated, but remained family-owned.

Tapie moved production to Asia and brought in Madonna as a celebrity spokesperson. In 1991, adidas EQUIPMENT launched, offering apparel and footwear. Adidas sponsored the 1992 streetball Page 4 of 19 tournament, helping turn streetball into a recognized sport. Unable to pay his debts, Tapie had his bank sell adidas. Credit Lyonnais converted his debt into adidas equity, Robert Louis-Dreyfus became manager and in 1993 bought adidas from the bank.

In 1994 adidas launched the adidas Predator Cup (and the Predator shoe) to find young soccer talent.Adidas took Kobe Bryant under its wing and went public in 1995. 1. 6 Salomon 6. In 1997, adidas and the Salomon group formed adidas-Salomon AG.

Two years later, adidas-Salomon returned to Herzogenaurach with its World of Sports campus. Adidas opened the adidas Village, its North American headquarters, in 2002. With designer Stella McCartney it created a catwalk-worthy designer line and in 1995 released the adidas_1, the first computer-controlled shoe for consumers. 1. 7 Today 7. In 2005, adidas sold its Salomon segment, returning adidas to its roots (adidas Group).

In 2006 its training system, Project Fusion, integrated monitoring technology into clothing. It acquired Reebok International Inc. in 2006 and changed back to adidas AG. 2. 0 ADIDAS SALOMON CONSOLIDATED BALANCE SHEET (IFRS) € in millions June 30 2005 June 30 2004 *) Change in % Dec. 31 2004 Cash and cash equivalents Short-term financial assets Accounts receivable Inventories Other current assets 252 240 1.

039 1. 146 421 3. 098 200 228 1. 122 1. 304 346 3. 199 3.

199 26,2% 5,5% (7,5)% (12,1)% 21,8% (3,2)% 13,8% 196 259 1. 046 1. 155 378 3. 035 3. 035 Assets classified as held for sale Total current assets 43 3. 642 Property, plant and equipment, net Page 5 of 19 351 355 (1,1)% 368 Goodwill, net Other intangible assets, net Long-term financial assets Deferred tax assets Other non-current assets Total non-current assets 438 91 121 178 119 1.

297 583 103 94 197 122 (24,9)% (11,5)% 28,5% (10,0)% (3,1)% 572 96 93 167 103 1. 399 1. 456 (10,9)% Total assets 4. 939 4. 655 6,1% 4.

434 Short-term borrowings Accounts payable Income taxes Accrued liabilities and provisionsOther current liabilities 0 634 213 601 133 1. 580 0 638 174 557 182 1. 552 1. 552 (0,7)% 22,3% 7,8% (27,2)% 1,8% 13,2% 86 592 167 558 184 1. 687 1. 687 Liabilities classified as held for sale Total current liabilities 177 1.

756 Long-term borrowings Pensions and similar obligations Deferred tax liabilities Other non-current liabilities Total non-current liabilities 1. 035 128 83 26 1. 272 1. 395 121 60 34 (25,8)% 6,0% 38,9% (24,5)% 863 129 78 31 1. 100 1. 610 (21,0)% Share capital Reserves Amounts directly recognized in equity relating to assets held for sale 118 58 (3) 117 (34) – 1,1% 268,8% – 117 (34) – Page 6 of 19 Retained earnings Shareholders’ equity Minority interests 1.

705 1. 878 33 1. 81 1. 463 30 23,5% 28,4% 7,5% 1. 534 1. 618 29 Total equity 1.

911 1. 493 28,0% 1. 646 Total liabilities and equity 4. 939 4. 655 6,1% 4. 434 Page 7 of 19 3.

0 ADIDAS SWOT ANALYSIS Adidas-Salomon is a leading player in the sports good manufacturing industry. The company has posted a very steady growth in its sales revenues in recent years, essentially as a result of its strong brand image. The company has market leading products and strong brand names including Adidas, Salomon, TaylorMade and others which are further strengthened by its strong commitment to product innovations.Furthermore, on the supply-chain side the company’s commitment to reduce lead time for manufacturing footwear has enabled the company to avoid the warehousing of products. 3.

1 Strengths 3. 1. 1 Leading player in the sporting goods industry. The company is amongst the top players in the sporting goods industry due to its strong brands, market-leading products and commitment to sports for meeting consumer expectations. The global sportswear market (E45 billion) is dominated by Adidas-Salomon and Nike and, at a certain distance, Reebok, PUMA and New Balance.Adidas-Salomon’s brands include Adidas, Salomon, TaylorMade and others, which have very strong brand name recognition in markets served. The company’s products serve many markets and include footwear, hardware, apparel, snowboard, golf-related and other products. It has sponsored many sporting events including the Winter Olympics, the FIFA World Cup of 2002 and most recently the Euro 2004 tournament and the Olympics in Athens 2004. Page 8 of 19 3. 1.

2 Steady increase in sales revenues. Adidas-Salomon’s revenues from sales have been steadily increasing as reflected in the last five years’ sales performance ending 2002.From E5. 1 billion of sales in 1998 to E6. 5 billion in 2002, the performance has improved by a CAGR of 7%.

Though sales declined by 3. 9% in 2003 over 2002, it was mainly due to currency translations. The company has been able to achieve this steady growth in revenues due to its strong brand image, continuous commitment to product innovation that is consumer focused. Such a steady growth in the company’s revenue performance helps in maintaining a very good image for the company and improves investor confidence.Additionally, the company reported an outstanding operational and financial performance in the first half of fiscal 2004.

This underlined the company’s momentum, with quarter on quarter sales improvements for all brands, and a record gross margin and earnings growth of almost 40%, marking the strongest first half year performance in the company’s history. 3. 1. 3 Successful new product innovations. The company has consistently launched new products and portfolio and also enhance its competitive position.

Each market and new products are introduced based on their company achieve a greater degree of success. During ClimaCool and a3 in its running shoes category, which sold over 500,000 pairs in a3 and over one million in ClimaCool. this has enabled it to widen its company brand targets a specific requirements. This has helped the 2002-2003, the company launched were big successes. The company Furthermore, in the basketball shoes division, the T-MAC and T-MAC were the bestselling in the US market in 2002 which has led to the release of T-MAC 4 lace less footwear for 2004.

The company’s continuous commitment towards new product innovations not only improves revenues but also helps in strengthening its relationship with its customers and attracts new customers. In May 2004 the company announced introduced what the company described as the first Intelligent Shoe – called “1”, the shoe provides intelligent cushioning by automatically and continuously adjusting itself. 3. 1. 4 Lead time improvements.

The company has considerably improved the lead-time required for footwear manufacturing through lean manufacturing principles.Earlier in 2000, the company used to take 120 days for producing footwear; by 2003, this had been reduced to around 60 days. Such a reduction was made possible as a result of the company’s efficient implementation of lean manufacturing principles which helped in removing non-valueadding procedures and activities, improved labeling, special handling and other such activities to reduce time taken. These process improvements have helped the company in avoiding warehousing of its footwear products. Page 9 of 19 3. 1.

5 Marketing strength.The company has planned and implemented major advertising campaigns during 2004. The company’s immense size and strong position have afforded it the opportunity to undertake global advertising campaigns with focus on TV, print media and outdoor advertising as well as point of sale and PR activities. The campaign “Impossible is Nothing”, includes top athletes from different disciplines such as Muhammad Ali and his daughter (brand image, boxing and lifestyle), Haile Gebrselassi (brand image, running), David Beckham (brand image, football) and Tracy McGrady (brand image, basketball).This mega campaign will not increase the annual advertising budget in 2004 as it replaces the budgets of last year, demonstrating the company’s consistency in brand advertising. 3.

2 Weaknesses 3. 2. 1 Unfocused strategy. The strategy of Adidas-Salomon is lacking focus. This is because it has a very broad product portfolio, including sport performance products for athletic sports, basketball, golf, tennis, Nordic disciplines, cycling and fashion oriented products.

Rival Puma has demonstrated that focus can translate into a high profitability. 3. 2. 2 Over-dependence on Adidas brand segment.While the purchase of Salomon, the French maker of ski and golf gear, steered the company into the equipment arena, the company generated 79% ($4. 9 billion) of its total revenues of E6.

3 billion from the Adidas brand segment in 2003, while the other two contributed to the balance. Despite a strong image for the TaylorMade and Salomon brands, they generated only about 21% of the total revenues. The company’s overdependence on the Adidas brand segment, which mainly serves the athletes’ requirements, makes the company’s overall revenues susceptible to the market conditions in this segment. . 2. 3 High level of long-term borrowings.

Though the company reduced its borrowings by E181 million against 2002, the level of borrowings is still very high. At the fiscal year end 2003 the company’s long-term borrowings as a percentage of equity were very high at around 146%, which amounted to E1, 574 million. Such high debt level affects investor confidence in the company and makes low-cost funding of growth plans difficult. By half year fiscal 2004 strong cash flow had enabled more progress in debt reduction has been (net borrowings at June 30, 2004 wereE967 million, down 39% or E616 million versus E1, 583 billion in the prior year) made but debt remained high. Page 10 of 19 3. 2.

4 Order cancellations. 2003 revenue growth was substantially below the company’s first impression from yearend 2002 order backlogs, which were up a strong 14%. As 2003 revenues growth was only 5%, significant order cancellations in the course of the first half of 2003 are evident. The company achieved revenues that totaled E6, 267 million ($7,570. 4 million), a decrease of 3. 9% against the previous years revenues that totaled E6, 523 million.

3. Opportunities 3. 3. 1 Strategic acquisitions and agreements. The company made a few strategic acquisitions during 2004.

In September Adidas and Stella McCartney announced a long-term partnership in New York, presenting the Adidas by Stella McCartney sport performance collection. For the first time ever a high-end fashion designer had created a functional sport performance range for women. The first collection will be available in stores across the US, Japan and Europe starting spring/summer 2005. It offers products for running, gym/workout and swimming as well as cover-ups.The Adidas by Stella McCartney range shows the company’s willingness to innovate in the women’s sportswear market.

Adidas-Salomon acquired Valley Apparel Company of Cedar Rapids, Iowa in June 2004, a producer and distributor of collegiate and professional league apparel and accessories. It serves small- to mid-size retailers, such as sporting goods stores, department stores, fan shops and college bookstores. It has a reputation of producing and delivering large quantities of apparel and branded accessories within hours of a team’s victory.In early 2003, the company acquired the Maxfli brand of accessories and other golf related products from Dunlop Slazenger Group through its TaylorMade-Adidas division. This acquisition has helped the company in offering market leading products in all the golf categories and has improved its global market share to 16% from less than 1% prior to the acquisition. The company also entered into a strategic agreement in June 2003 with the INTERSPORT International Corporation (IIC), a multi-sport retailer, in order to strengthen its sales and distribution network.

Specifically, the four year agreement will – in time strengthen the company’s sport performance, casual, Salomon and other products’ sales. 3. 3. 2 Supply-chain and manufacturing initiatives. The company’s success in reducing footwear manufacturing time is likely to continue in the future also. The company plans to reduce its production time further, which will help the company achieve faster delivery of its products to the retailers, thereby reducing inventory costs.

On the supply-chain side, the industry faces a problem due to longer time to market.The total time taken is about 15 to 18 months of which 12 months are spent in creation of the product, while the balance of the time in arranging for the raw materials, production and delivery to the retail stores. The company plans to implement a new model for its supply chain, which will considerably reduce the time taken and improve cost efficiency, etc. This initiative will help the company in serving its customers faster, thereby gaining a competitive edge over its peers. Page 11 of 19 3.

3. 3 Sponsoring sporting events. The company’s sponsorship of major sports events brings great recognition to its products.Adidas supplied more than 1. 4 million products to federations, volunteers, officials and others during the 2004 Olympics. Following a successful marketing campaign at the Euro 2004 Soccer Tournament in Portugal, the company once again expected to achieve new record sales in football during 2004.

During 2002, the company sponsored FIFA World Cup Championship in Korea and Japan and was acclaimed as the most visible among the brands advertised during the event and was viewed by 44 billion cumulative spectators during the course of the event.Furthermore, in the Winter Olympics of 2002, the company sponsored over 50% of the participating athletes who won about 200 medals. Adidas has a life-time agreement with Kevin Garnett (most valuable player of the NBA 2003/2004). It also signed a six-year cooperative agreement with Chinese Football in June 2003. The company is preparing to sponsor the World Cup in 2006, which will be held in Germany.

Sponsorship of these events helps the company in building its Sport Heritage, Sport Style and other such divisions. For instance, the SportHeritage division grew into an E900 million businesses and doubled its sales from 2001 to 2003. 3. 3. 4 Own retail stores.

In 2003 Adidas generated 9% of group revenues in own retail outlets. A significant number of new shops have not yet positively contributed to earnings because the cost for new shops (of hiring of sales people and training costs etc. ) exceeded early revenues. This will begin to level out going forward and the company will continue to open own retail shops. Management recently explained that own retail sell-through was positive in the US in 2003 in contrast to external customers.The company is therefore planning to open 15 new US shops in the coming two years and 40 worldwide.

Management expects Sport Heritage to grow again from 2004 driven by more own retail stores and no more cutting of external points of sales. The company opens its second UK store in Manchester in 2004. 3. 4 Threats 3. 4.

1 Competition. Adidas operates within a highly competitive market which in many cases overlaps into other markets as sportswear retailers increasingly compete with fashion retailers.The company’s traditional competitors like Reebok, Nike and Puma make competitive levels intense, but the addition of casual footwear and apparel manufacturers such as Tommy Hilfiger, adding a designer edge to the market, has increased competitive levels. Companies have come under increasing pressure recently from products designed for the value conscious consumer. Adidas have long been one of the premium brands in sportswear and have charged accordingly, Page 12 of 19 though this strategy is coming under more pressure as cheaper bought by consumers adding to problems in terms of customer retention.

ubstitute products are 3. 4. 2 Foreign exchange fluctuations. The company’s manufacturing activities are mostly concentrated in China and other Southeast Asian countries. Since most of these countries transact in US Dollars, the company incurred about 70% to 80% of its outsourcing expenditure in US Dollars, whereas, the company’s revenue generation in US dollar and other non-Euro currencies is comparatively lower.

Hence, any adverse changes in the exchange rate between US dollar and Euro will have a negative impact on its overall revenues. 3. 4. 3 Weak global economy.The GDP of European countries have grown at a negligible rate and are unlikely to improve in the near future. Similarly, the Latin American markets such as Argentina and Brazil continue to witness weak economic conditions, while the Southeast and Middle-East regions continue to reel from political unrest.

Thus, the company’s revenues could be significantly affected in the near future due to these adverse economic conditions. 3. 4. 4 Impact of scandals in the US and Germany. Accounting scandals across industries in Germany and the US have impacted upon the company’s stock performance recently.The weak performance of many companies in the sports goods industry adversely affected the investor confidence in the industry.

The company’s stock price has been as low as E80 during the last two years. Thus, external factors can have an adverse impact on the company’s stock price performance and might in turn affect its brand’s value. 4. 0 ADIDAS PESTEL ANALYSIS 4. 1 Political Adidas need to be aware of the political state of the UK, 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.

There is a stable political situation in the 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.There are elections every four years in the UK, with the next one in May 2005.

This keeps everything functioning properly within the UK, as the government aren’t very likely to introduce any controversial policies, as they would be voted out at the next election. This is Page 13 of 19 good for Adidas, as it means that the government aren’t very likely to introduce any drastic policies, which may affect them. The government also offers subsidies if organisations set up factories in areas of high unemployment, such as the north east of England and south Wales.An example of this is Sony setting up a factory in Cardiff. However, I don’t feel this would benefit Adidas, as there aren’t any advanced skills required for manufacturing football boots, and would therefore be a lot cheaper for Adidas to manufacture their products in countries outside of the UK, where there is no minimum wage.

The minimum wage is quite a major constraint for Adidas in the UK, as this means they can acquire labour at nowhere near the cost they could in countries where there is no minimum wage.If Adidas could acquire labour at the same cost as they do in other countries, this would allows Adidas to cut out the transport costs of moving the produce to the UK, and could be spent on funding new products such as my own. If the UK government were to put a quota on Adidas products imported, only allowing a certain amount of Adidas products to be brought into the country each year. Adidas could overcome this by situating a factory in the UK, eliminating the quota, as if the products were being produced in the UK, there would be no need for produce to be imported from other countries.This wouldn’t be good for Adidas as they would either have to sacrifice their cheap labour, or sacrifice sales by abiding to the quota, either way losing money.

This would have a bad affect on my product as Adidas would have less money to promote it. If the UK government were to assume a more market economy, where producers make goods in order to make a profit, and the state intervenes very little, meaning no state benefits, doctors’ fees and dentist fees. This would have a mixed affect on Adidas, as the working class would have less oney to spend on products like football boots, as they wouldn’t have previously being paying high taxes, and these relatively low taxes will be replaced with large fees, as nothing is provided free by the state; this would have a bad affect on Adidas as they would lose sales from this area of the market. However, the more upper class people would have more money to spend, as fees they have to pay would not be as much as the taxes they are used to paying and therefore would have more money to spend on products like football boot, meaning Adidas would receive a greater profit intake form this area of the market.Overall, I feel this odes not affect Adidas too much as the decrease in sales from the working class would be balanced out by the increase in sales from the higher class.

4. 2 Economic Adidas are also affected by the state of the economy in the UK. The interest rate in the UK is currently 4. 25%, however it was 3. 75% around 6 months ago, and is probably rising to 4.

5% in the near future. This shows that the interest rate is not very stable and will make it hard for Adidas to plan ahead in terms of budget.Also, if the interest rate is too high and keeps rising, then the demand for products will fall, as it makes saving more attractive, and borrowing more expensive. Whereas if the interest rate is 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, this is bad for the economy as it causes inflation to increase. This is why it is important that the interest rate is stable.

The UK’s interest rate isn’t very stable at the moment because it is quickly increasing, meaning that it may affect Adidas in regards to their sales.This helped Page 14 of 19 me decide on my pricing strategy of competitive pricing, where I set my price in line with my competitors’, as if their products are selling, then there must be people willing to pay that amount for a similar product. However, if the interest rates continue to rise, this will make saving more attractive and spending less attractive, therefore I may have to reduce the price of my product to encourage more sales. If sales drop there will be two options for me in terms of promoting my product; I could cut down the amount f promotions used to sell my product, to maximise my profits; or I could invest more money to promote my product more and hopefully gain more sales. Before the interest rates rise even more I will research into new, cheaper materials to use on my product, which will function the same as the current materials used. Therefore, if interest rates rise and there are less sales made at the current price, I can make a larger number of sales by lowering the price of my product, and with the cheaper materials, it will allow me to make the same profits.

Due to high interest rates, sales may drop, so I will be making my product widely available to maximise sales, these places including high street sports shops, the Internet and mail order catalogues. This will allow the product to be available to a large amount of people and anyone that wants the product, will be able to buy it easily with no hassle. Due to the UK’s interest rate rising quickly, there isn’t much inflation of prices within the UK, meaning that Adidas will be able to purchase their goods at a cheap price. However, sales will drop, as customers will be tempted to save rather than spend.Also, other counties from which Adidas get their raw materials may have prices that fluctuate a lot. Therefore, this would mean that Adidas’s prices might also fluctuate and would make planning ahead hard.

To add to this there will be exchange rates that may change a lot, and on top of this there is commission to pay exchanging money from one currency to another, making selling and buying products overseas more expensive for Adidas. Another economic factor to be considered by Adidas is taxation. Taxation comes in two forms, direct and indirect.Direct tax is tax that can’t be avoided, an example of this is PAYE (income tax), where a percentage of everyone’s earnings are taken from them, this affects people’s PDI (explained below). Indirect tax is tax that can be avoided.

E. g. VAT on a product, as this can be avoided by not buying the product. Another influence that the economy may have on Adidas is unemployment. As, unemployment is high, then there would be less demand for their goods, this is because lots of people are unemployed, then they aren’t going to have much money to spend luxury items.

Whereas, if unemployment was low then there would be a higher demand people have got more spare money to spend on luxury items. if if on as Personal disposable income (PDI) is also a factor, which could affect Adidas. Personal disposable income is the money that someone has left to spend after deductions (tax, bills, food etc. ) have been taken off their net income. PDI is affected by things such as interest rates, taxation and inflation, which I have explained above.

Basically, if people have more PDI then the demand for Adidas’s products should increase, and decrease if people’s PDIs are lower, due to the same reason as unemployment. . 3 Social As the UK has a wide selection of people from different social backgrounds, Adidas need to be aware of things like people’s religion, race, culture, education levels, population, gender, age distribution, buying habits and lifestyle. Therefore, I need to promote my product so that it appeals to the different social backgrounds of the UK, as this will maximise my sales and enable my product to fulfil its potential market share. Page 15 of 19 The UK is becoming more and more dependant on the Internet, this means that the methods in which people buy goods are changing.Rather than using the traditional method of going to shops and buying products, more and more people are buying goods from the Internet.

This is because people have less time on their hands and the Internet is the quickest and easiest method in which to buy goods. Adidas need to recognise this fact and I will be selling my product online. Another method commonly used in the UK to buy goods is mail order; I will also be using this method of sale so that my product is widely available to people with different kinds of buying habits. Adidas also need to recognise the frequency, or how often people tend to buy certain goods.For example most people would buy 1 or 2 pairs of football boots per season.

Taking this into consideration, I will be investing money into promoting my product in the preseason stage, as this is the time in which most people buy their football boots. Also, I will be updating my product at this stage (pre-season) each year for the same reason as above. I feel Adidas have already noticed the times at which they receive the most sales, as they use lots of advertising campaigns in the pre-season stage and also before and during large international football competitions such as the World Cup and the European Championships.Religion and culture are also considerations within the social section. In the UK there are a variety of religions and cultures including Christians, Muslims, Hindus, Jews and many more. I need to be aware of this and try and make my product cater for all these different religions.

In the UK, generally there is a high education level, meaning that people will be more demanding.Therefore, Adidas won’t be able to get away with things in the UK, which they possibly could in other countries with lower education standards, so I will be promoting my product in a way which is not ‘cheesy’ and in a way which customers cannot tell that the promotion isn’t just about getting customers to buy it. Adidas need to be aware of the areas within the UK with the highest populations, such as London (and the south east), the Midlands and the northwest to name a few. With this information Adidas know the best places to sell their goods as the more people there are, the more potential customers there are to Adidas.When situating my product, in terms of where it will be sold, I will be situating my product in areas such as London, Birmingham, Manchester and other large cities in the UK, as there are the highest amounts of customers in these places, in comparison to the countryside, and therefore will receive higher numbers of sales in these areas. The age distribution of the UK is getting higher all the time, as life expectancy in the UK is ever-increasing due to advances in medical facilities and living standards.

However, this wouldn’t be much of an issue to Adidas, this is because Adidas is a sports company, and the majority of the market for sportswear is in the younger end of the market. Therefore, this issue shouldn’t affect me too much, as I will be targeting younger age groups. Leisure time is another consideration for Adidas, as people are becoming busier and are not having much leisure time. Adidas is a sportswear company and most people play sport in their leisure time, and if people’s leisure time is decreasing they aren’t going to have as much time to play sports.Therefore, if people haven’t got as much time to play sports then the demand for sportswear will go down. I can combat this issue by intensive promotions of my product aimed at the younger end of the market as these people have the most spare time and are more likely to buy the product especially if the promotions appeal to them.

Page 16 of 19 The final point is the fast food culture, which is arising in the UK. More people are becoming obese from a young age and many of these people then do