Positive and Negative Impacts of Macro Environment on Business Operations: A Case Study of Adidas

This report covers the positive and negative impacts of macro environment on business operations of Adidas. It includes PESTLE and SWOT analysis to identify strengths and weaknesses of the company.

Business and business
environment (Part 2)

Table of content
 Introduction
P4 Identify the positive and negative impacts the macro environment has upon business operations, supported
by specific examples.
P5 Conduct internal and external analysis of specific organizations in order to identify strengths and
weaknesses.
 P6 Explain how strengths and weaknesses interrelate with external macro factors.

Introduction
The business gets opportunity by proper analysis of
business environment factors which helps in development of
effective planning, improving performance and profitability is
enhanced (Aker, and Aghaei, 2019). The Adidas is been
selected The part 2 will cover positive and negative impacts of
macro environment on business operations and PESTLE as
well as SWOT analysis are covered in this project report.

P4 Identify the positive and negative impacts the macro
environment has upon business operations, supported by
specific examples.
The organisation has impact of macro environment on the business operations along with positive bad negative
impact is determined which help company in maintaining all activities in proper manner and leading to profitable
advantage. In context to Adidas, it has to determine external factors of business environment on its operations. The
PESTEL analysis is conducted for knowing the positive and negative impact on business operations-
 Political factor- In context to Adidas the products are offered globally which supplies, ships and distributes. The
supply chain needs to be extended internationally along with this it is abided to follow rules for selling products
overseas.
 Economic factor- The leisure product of diverse categories is created by Adidas and sales of sports is driven by buyer
trends and preferences.

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 Social factor- In accordance to consumer preferences the change in design and lifestyle of sports wear or apparels
puts an positive impact on company as there it focuses on health conscious buyers.
 Technological factor- The advance technology is used for testing the products of Adidas as it target to athletes.
 Environmental factor- The dangerous substances are eliminated by monitoring and natural material in product are
offered which reduces the environmental impact.
 Legal factor- The ownership of intellectual properties and IP system is there which designed its patents, defending
rights from copiers and infringement.

P5 Conduct internal and external analysis of specific
organizations in order to identify strengths and weaknesses.
The companies are required to analyses the strength and weakness for achieving great profitability and
market growth so that it can take more opportunities and threats can be eliminated. In context to Adidas the SWOT is
been mentioned below-
 Strength- The quality products are offered by Adidas by having more investment in research and development that
increases brand image and more customers are attracted which is an strength for the company.
 Weakness- In context to Adidas it has weakness of high product cost because of innovative technology and
methods of production. With the similar brand there is stiff competition which leads to consumers to have high
switching from brands. The company also face weak point of lawsuits and controversy.

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 Opportunities- The opportunity to Adidas is provided for developing new foot-friendly footprints and
business expansion internationally. The presence of brand is boasted internationally by having tie-ups with
sports team and club.
 Threats- In context to Adidas it face threat of competitors who are in same industry producing sports
equipment, accessories and more at low cost.

P6 Explain how strengths and weaknesses interrelate with
external macro factors.
The company performance and productivity is affected directly as Adidas has several strength
and weakness. The interrelation of strength and weakness with external macro factor is been discussed
below-
 Political factors- In economy, political gaps and down are determined which is recognised
by Adidas that puts affect on operation and performance of business in positive and negative way.
Positive impact Negative impact
On business of Adidas strong team and workforce is
developed which puts positive effect leading to
global expansion and have strong international
presence.
The Adidas has negative impact with the change in
trends and lawful considerations on business
functioning. The government policies also puts
negative impact.

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 Economic factor- The Adidas is company of sports wear and determines the economic stability and
change in growth rate which affects economic situations by having positive and negative impact.
 Social factor- On company sales there is direct impact of social activities as there us change in
demographic, lifestyle and trends of consumers putting impact of positive and negative.
Positive impact Negative impact
The cheap products are offered to consumers as
comparing to its competitors by having innovative
product in shoes and apparels which puts positive
impact (Rossignoli and et.al., 2018).
The import and export affects directly to economy
along with change in market trends, inflation puts
negative impact on Adidas.
Positive impact Negative impact
The undertaking of market research helps in
acknowledging customer preferences and
choices regarding shoes which gives positive
impact on Adidas.
The high level of competition with rivalry in the
similar industry of sports wear affects the
company performance which may lead to
negativity (Townsend, A.K., 2017).

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 Technological factor- It focus of attracting more customer by taking use of advance technology so that
innovative and comfortable shoes with new designs and colours can be offered to customers in market
which also have positive and negative impact.
 Legal factor- The Adidas follows all legal considerations and legislations for generating more revenue and
profits which puts positive and negative impact related to external environmental factors.
Positive impact Negative impact
The Adidas adopted high use of technology for
producing innovative products that can increase
brand image through sales which is strength for
Adidas company and having positive impact.
There is negative impact on Adidas as for
accessories, apparel or shoes as compare to
other competitors or offering of new design
products.
Positive impact Negative impact
The business operations of Adidas is run
smoothly and productivity is improved which
leads to positive impact as there is follow up of
legal procedures.
The company goodwill is affected with some
controversy and lawsuits. The alteration in
regulation and not abidance proper safety for
worker may affect Adidas negatively.

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 Environmental factor- This is associated with the modification in weather, climate and pollutions of
environmental conditions are affecting productivity and enterprise operations in the outside environment
(Yoo, and Jang, 2019).
Positive impact Negative impact
The engagement in green marketing activities
and giving knowingness about environmental
sustainability puts an positive impact and
reasoned strength for the Adidas.
The changes in marketing and technology, there
is change in environmental situations and moves
which affects Adidas negatively and ecological
sustainability.

Conclusion
From the above report it is been concluded that different types of companies take different legal
forms which involves private, public and voluntary. The business is also of different size with scope
which is run for particular purposes in society. In the above report, factors of micro and macro is
discussed which puts affect on business operations. The PESTEL and SWOT analysis is performed which
helps in identifying positive and negative impact on business performance and operations which allows
company to maintain its market value. The company gains more opportunities and threats are eliminated
effectively with help of strength and weakness.

References
 Choudhary, and et.al., 2020. The adoption of environmentally sustainable supply chain management:
Measuring the relative effectiveness of hard dimensions. Business Strategy and the
Environment, 29(8), pp.3104-3122.
 Cokins, and Căpușneanu, 2020. Management accounting: The sustainable strategy map and its
associated sustainability balanced scorecard. In Management accounting standards for sustainable
business practices (pp. 1-26). IGI Global.
 Expósito, and Sanchis-Llopis, 2019. The relationship between types of innovation and SMEs’
performance: A multi-dimensional empirical assessment. Eurasian Business Review, 9(2), pp.115-135.

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