BUSINESS ENVIRONMENT ANALYSIS
Inside the EU, there is not much change on the bureaucracy between states.
Half of the Irish people buys often from foreign retailers. (Statista, 2016)
In 2019 their corruption rate was the 18th best of the world. (Transparency International, 2020
in 2016, 62.6% of Irish households had incomes less than €60,000 in year.
Ireland´s value in Political stability index was 1.03 points in 2018. World´s average -0.05 points, The EU average 0.69 points. (The Global Economy, 2020)
Lifestyle and fashion changes:
Irish lifestyle is really sport related.
The Fashion in kind of old school.
(Ireland Property Guides, 2020)
Ireland follows mainly the EU´s economical treaties
Ireland was 3th at the HDI Index in 2019
(Human Development Reports, 2020)
There are not any notable business influencing pressure groups, mostly political.
Sport is popular and widespread. The most used language is English.
Ireland has over 50 funds and supports for businesses
Ireland is known for being multi-cultural environment
(Social Justice Ireland, 2020)
Construction costs: very high
(National Competitiveness Council, 2019)
Ireland has the 4th best tax policy in the world for corporates. (The World Bank, 2020) For corporates: 12,5%-33%. For worker avg: 25,9% (Taxing Wages, 2020) (Chambers and partners, 2020)
Irish people have more negative attitude to immigration than in EU.
Ireland is part of the EU´s trade system. The Brexit will have a negative impact on the trades.
Social mobility Index:
Ireland was 15th European country in 2020
(World Economic Forum, 2020)
Ireland has the Europe´s largest start-up summit (TECHBBQ). (Irish Tech News, 2020)
The Equal Status Acts was established to reduce discrimination on offering services and products, accommodation and education. (IHREC, 2018)
On the traffic centers the air quality is not great but the overview is better than in EU avg. (European Environment Agency, 2020)
The state has invested a lot to the Technology Transfer Office (KTI, 2020)
Mix of Irish and European legislation.
Waste and recycling management:
Recycling rate was 64% in 2018. (epa, 2020)
Ireland is considered being the hub of ICT (IDA, 2020)
Made to ensure fairness and freedom.
Legalities may differ from the laws of the EU
The electricity costs are one of the most expensive compared to EU
Adidas SWOT analysis
Combining both analyses
The PESTLE analysis is more about Ireland and what is the key points to check and observe before deciding if it is reasonable for Adidas to expand there. The SWOT analysis is more about Adidas as a company. By matching the key structures of both analyses and preparing to handle the weaknesses and the breaking points of the expansion, it reduces a lot of the risks.
The key internal and external factors about Adidas and Irish market.
By analyzing the target market and the Adidas´s potential, there is many things that need to be considered before the possible expansion. It is truly important to focus on the both internal and external factors.
The external factors are something that the company need to more or less adapt, because they are usually things that affects the company´s business, but the company cannot influence on them. In this case, these factors can be divided to political, economic, socio-cultural, technological, legal and environmental.
The key political factors that affects adidas are tax policy, business fund and support by the government or other organisations and Brexit. For corporations the Irish tax policy is one of the best in Europe. It should help Adidas´s profitability in Ireland. Also, there are over 50 different fund and supports just to help companies do their business. The most possible negative political factor is the UK´s resigning from the EU (Brexit). The Brexit might lead into trade barriers and reduce the labor from UK to Ireland.
The economic factors that affect Adidas the most, are the interest rates, the microeconomic costs and the already existing competition. The interest rates of Ireland have been 0.50% percent higher than the EU average since 2016. The difference is not much but it can affect the customers confidence and therefore the sales of Adidas. The microeconomic costs such as labor and energy, logistic and office space costs are higher than the EU average. The higher fixed costs decrease the potential profit. The existing competition is mostly focused to Nike and New balance. In country like Ireland, where sports are part of the culture, there are a lot of demand for sport clothing and accessories.
Socio-cultural factors in Ireland, such as the sports-oriented people, trust of foreign companies and the households´ averagely mid-high incomes are all things that have a positive effect on Adidas´s business.
The Irish technological development is one of the most predominant in Europe. With the Adidas´s willing to develop new technological methods of manufacturing, Ireland could be a great place for Adidas to do the research.
The legal and environmental factors that restricts or defines the ways of doing business in Ireland is quite similar to other EU countries.
The internal factors can be also divided to strengths, opportunities, weaknesses, and threats. These factors are things that the company can try to affect, by marketing and decision- making.
There are some strengths that Adidas can benefit especially in Irish market. According to Entsight, Irish teens and young adults prefer Adidas over other sport brands. In Ireland, the age structure is optimal for Adidas, because the quantity of teens and young adults is increasing at least for the next 10 years. When the both target market and the company desire for developing new things, it facilitates Adidas to achieve the new innovations and materials they seek for. The wide distribution network that Adidas has, might benefit them on the otherwise so expensive logistic costs.
The Irish sport culture and the on-going fitness-boom gives Adidas a great opportunity expand their product mix to other sports, for example, to Gaelic games, where there is only one significant equipment seller. The Irish fan culture and the pride of their successful athletes would be a great chance for Adidas to increase their sales in Ireland by sponsoring some of their best athletes. The on-going pandemic has raised the unemployment and therefore there are more employees available.
The weaknesses that Adidas may need to overcome are the lack of vertical integration and thin brand selection. The lack of the vertical integration means that Adidas have outsourced most of their distribution network and manufacturing to other companies and therefore they are prone to bargaining by the biggest distributors and manufacturers. Adidas has only two brands under their product line, Adidas and reebok. They both focus on sport-oriented clothing and sports equipment. Negative associations to Adidas as a brand and decreasing interest in sports would be crucial for the company, because their brand mix is so narrow.
The Irish activity on researching new technology can be a threat to Adidas, because there already existing competitors might have a technological advantage or are releasing some new materials or technics that give them an advantage over Adidas.
Adidas has already a certain formula on expanding to new countries. The key points shown above are something that need to be considered on the decision-making process specifically before expanding to Ireland.
Our happy customers
They are fast in responding to homework questions. they have the best technical writers. Thanks for helping me with my programming doubts.
I contact to disklib for homework, they help me out, despite there was some technical issue they gone through extra mile for me and provide me good quality work in first priority. 100% recommended.
Desklib's study resources are best & unique. Their study database is easy to access and easy to use.
100 % recommended.