PEST Factor: Political
Riots in China are causing foreign manufacturers to think about moving production closer to home. The concern about China’s political stability is a growing matter as labour costs and calls for better wages and working conditions have been increasing over the past decade. This would be a threat for Adidas as China represents their largest sourcing country with around 35% of total footwear volume, 97% being produced in Asia. This will cause Adidas to consider manufacturing in places such as Vietnam or Indonesia, or possibly even in America/Europe.
Sources:
http://www.foxbusiness.com/economy/2012/09/28/will-china-riots-send-foreign-manufacturers-packing/
http://adidas-group.corporate-publications.com/2011/gb/en/group-management-report-our-group/global-operations.html
Riots in China are causing foreign manufacturers to think about moving production closer to home. The concern about China’s political stability is a growing matter as labour costs and calls for better wages and working conditions have been increasing over the past decade. This would be a threat for Adidas as China represents their largest sourcing country with around 35% of total footwear volume, 97% being produced in Asia. This will cause Adidas to consider manufacturing in places such as Vietnam or Indonesia, or possibly even in America/Europe.
Sources:
http://www.foxbusiness.com/economy/2012/09/28/will-china-riots-send-foreign-manufacturers-packing/
http://adidas-group.corporate-publications.com/2011/gb/en/group-management-report-our-group/global-operations.html