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 …show more content…
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