RETAIL BUSINESS ENVIRONMENT

PROJECT
ON

RETAIL BUSINESS ENVIRONMENT

By

GROUP – 5

AKANKSHA AGARWAL – 121319090005

KANAK GEHLOT- 121319090021

REEYA FRANCIS -121319090053

SEM – II

Submitted to:

Faculty of Management

Dept of B.VOC [RM&IT]

St.Francis College for Women,

Begumpet, Hyderabad

BATCH: 2019 – 2022

 ACKNOWLEDGEMENT

This project has been an enriching and a good learning experience. We

would like to express our gratitude to all those who have contributed
significantly by sharing their knowledge and experience in completion of
this project work.

We are thankful to the college Principal Sr. Sandra Horta and Head of
Department of B. Voc [RM & IT] Dr. Subi Varghese for initiating this
project.

Our sincere gratitude to Ms. Shalini Williamour project guide, for help,
support and guidance throughout the project.

We are thankful to the Store manager ofAdidas (Banjara Hills, Road No,1)
Shambhu Devrajfor supporting us by giving the information for our research
practical with lots of patience.

INDEX
 S.No. Particulars Page No.
1 Company overview 1
2 Store overview 2
3 Objective Of The Study 3
4 Mission & Vision of the company 4
5 Competitors 5-7
6 Distributors & Suppliers 8
7 SWOT Analysis 9-11
8 Subject related to the Company 12-15
9 Ethical Environment 16-17
10 Conclusion 18
11 Suggestions 19
12 References 20

COMPANY OVERVIEW

LAUNCHED: 18 August 1949

AIM: To make athletes better
CEO: Kasper Rorsted
TAGLINE: “Impossible Is Nothing”
Adidas is a multinational corporation, founded and headquartered in
Herzogenaurach, Germany, that designs and manufactures shoes, clothing and
accessories. It is the largest sportswear manufacturer in Europe, and the second
largest in the world, after Nike. It is the holding company for the Adidas Group,
which consists of the Reebok sportswear company.

The company was started by Adolf Dassler, he was joined by his elder brother
Rudolf in 1924 under the name Dassler Brothers Shoe Factory. Dassler assisted
in the development of spiked running shoes (spikes) for multiple athletic events.
To enhance the quality of spiked athletic footwear, he transitioned from a
previous model of heavy metal spikes to utilizing canvas and rubber. In 1949,
following a breakdown in the relationship between the brothers, Adolf created
Adidas, and Rudolf established Puma, which became Adidas' business rival.

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STORE OVERVIEW

STORE:ADIDAS

ADDRESS: Beside Levi’s store, Opposite to Jalagam Vengalrao Park

Road No.1, Banjara Hills

Hyderabad, Telangana 500082

CONTACT NO:040-48527379
HOURS: 10:30 AM – 10:00 PM

Adidas at Banjara Hills is a Company Owned and Franchise Operated (COFO).

The store was set up on 25th September 2018. The store is 2,050sq ft and the
selling area is 1,850sq ft with segments like footwear, sportswear, sports
equipment and toiletries.

The store manager is Shambhu Devraj. The average sale per month is
Rs.20,00,000 approximately.

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OBJECTIVE OF THE STUDY

The objective of this research project is to gain knowledge pertaining

to the subject “RETAIL BUSINESS ENVIRONMENT.” This study is
done to know the subject in depth by linking it with store operations.
It has also emphasized on the micro and macro factors of the
environment and know the strengths, weakness, opportunities and
threats (SWOT) of the company.

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MISSION AND VISION

MISSION:
 The adidas Group strives to be the global leader in the sporting goods
industry with brands built on a passion for sports and a sporting lifestyle.
  We are consumer focused and therefore we continuously improve the
quality, look, feel, and image of our products and our organizational
structures to match and exceed consumer expectations and to provide
them with the highest value.
 We are dedicated to consistently delivering outstanding financial results.

VISION:
 They continuously strengthen their brands and products to improve their
competitive position.
 They are ‘Creating the new’ - because we believe that through sport, we
have the power to change lives.
 Their love for sport drives who they are and what they do.

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COMPETITIORS

1. NIKE
Nike is the best company and the most trusted brand that you can trust when
you are looking for quality shoes especially for running, training and leisure
activities. Most of the soccer shoes, basketball footwear, and running shoes
have been made by Nike. The only main reason why all roads are leading to
Nike is because its products will never disappoint.

2. AIR JORDAN

This is a Nike subsidiary that produces athletic clothing and basketball

footwear. It was originally endorsed by Michael Jordan, the Chicago Bulls
basketball superstar. Since the early 80’s, the company has been able to produce
basketball footwear that can’t be matched by any other on the market.

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3. FILA
Fila comes among the top most Sports footwear manufacturing companies with
a good market share. It is also one of the largest manufacturing companies of
footwear with its cutting edge coming at its price. It is most liked by the
medium income earners to low-income earners (who are the majority in the
society). The reason behind this liking is because of the relatively lower pricing
when compared with Nike, Adidas, and Puma.

4. CONVERSE

This is a company that is given credits for making footwear beautiful. Everyone
goes for Converse whenever they are looking for something to put on with their
casual apparel. Though its signature products are its casual shoes, Converse is
also known for the appealing sports shoe line. With annual revenue of about $2
billion, it is a company Adidas should watch its pace.

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5. PUMA
It is impossible to mention Adidas competitors without mentioning PUMA
because if it weren’t for sibling rivalry, these two companies would today be
operating as one. PUMA has been able to overcome the storms and ended up
among the most competitive in this sector.

This is because of its array of quality products in the footwear line among
others. The company makes apparels, footwear, and other accessories. Its
heritage is in the shoes but it has also recently been taking a firm position in the
industry through its apparels. I believe that the sibling rivalry between Adidas
and PUMA out rightly makes PUMA, Adidas’ company to beat.

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DISTRIBUTOR & SUPPLIERS

DISTRIBUTORS:

The store has no distributors, the stock comes directly

from the company to the franchise through the
warehouse, located in Delhi.

SUPPLIERS:

The products are supplied to the customer at the store,

that is; there are no online deliveries. In case of any
shortage of stock, the store informs the company and
once the stock comes in, the store team is responsible for
the inward and informing the customer that their product
is available at the store.

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SWOT ANALYSIS
STRENGTHS -
 Brand image: Adidas is a brand with a mission to become world’s best
sports brand. The brand has maintained a great image which also means
high level of popularity and brand recognition. A strong market presence
in the key markets globally is another major strength of Adidas.
 Legacy & heritage: With decades of heritage & legacy, Adidas has
travelled a long way to establish itself as a youthful brand.
 Diversified portfolio: Company has multiple product portfolio’s with
varied range of footwear & accessories under brand name Adidas
(premium segment) & Reebok (mid range).
 Strong financial position: With its 2400 store globally accounting
$4.3billions, the company is in strong financial position.
 Distribution network: By selling it from online stores to company
owned stores to supermarket stores, Adidas has an effective distribution
system for their products available through different channels.
 Collaborations & memberships: Strong relationship within the
sustainability area with organizations such as International Labour
organization, International Finance Corporation has given the company
an edge over competitors so that they can have a sustainable business.
 Innovative marketing strategy: In the recent years Adidas has
revamped its marketing strategy and focused it on the metropolitan cities
where most of its target market lives. This strategy has been effective and
the results are visible in the form of great financial results.

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WEAKNESS –
 Premium price range: High price range due to innovative technology &
Production methods have made the brand affordable to limited customers
only, especially in developing countries.
  Outsourced manufacturing: Adidas has 93% of production outsourced
to 3rd party manufacturers (largely to Asia) to avail low labour cost &
easy availability of resources. They are running a risk of over dependency
on outsourcing especially in Asian markets.
 Limited product line: Adidas along with the recently acquired Reebok
brands, has got only 2 brands under their group although they have got
deep assortments within these brands. Thus, there is more scope for
product line expansions.
 Tough competition from Nike resulting in customer retention related
pressure:Nike dominates the shoe market and therefore the competitive
pressure on Adidas is high. Switching costs being low, customer retention
is a challenging area.

OPPORTUNITIES –
 Changing Lifestyle: With the saturation of developed economies,
changing taste & preferences, education & changing lifestyle of
developing economies, there is a steep rise in the demand of premium
goods & services.
 Market development:Entering into new markets will be the only way to
succeed in the future because developed economies are already having
high competition.
 Expansion in product line: Expanding its product line will open a new
set of opportunities while at the same time it can differentiate itself from
the competitors by following this strategy.
 Product and design innovation: Continuous product and design
innovation is good for sales and revenue. It helps attract and retain
customers.

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THREATS –
 Competition: Although Adidas is a global brand but it is facing fierce
competition from other brands like Nike which is No.1 brand and Adidas
being in 2nd Position in this premium segment. Besides this, there is
regular competition from local players, substitutes and market
penetrators.
 Government Regulations: With its 35% products manufactured in China
& 93% of production happening in Asia, Import regulations, duty &
tariffs plays a critical role in the pricing and success of the company.
 Political tensions and economic uncertainty arising from Brexit:
Brexit has resulted in both political and economic uncertainty which
makes the situation challenging for Adidas in a few of its key markets.
 Economic uncertainty in key markets: There is economic uncertainty
in some important markets including Russia which is affecting financial
performance. Moreover currency fluctuations and a stronger dollar too
threaten profits.
 Over dependence on suppliers: Adidas’s dependence on suppliers is
high and over dependence on some of the in the long term can be risky
for its business. It has focused on building long term and strong supplier
relationships and still over dependence on them can be dangerous.

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SUBJECT RELATED TO THE COMPANY

Introduction:
 Retailing is the end of the marketing distributive channel. The word
‘retail’ has been derived from the French word “retailer” and means ‘to
cut a piece’ or ‘to break bulk’. It covers all the activities involved in the
sale of product and services. Retailing is the activity of selling goods and
services to last level consumers for their use.
Retailing can be defined as the business products and services
to consumers for their own use. According to Kotler, “Retailing includes
all the activities involved in selling goods or services to the final
consumers for personal, non-business use”. The reason for its popularity
lies in its ability to provide easier access to a variety of products, freedom
of choice, and many services to consumers.
The business environment has been defined as "the totality of
physical and social factors that are taken directly into consideration in the
decision-making behaviour of individuals in the organisation."

The 3 levels of the environment are:

Internal environment – the internal elements of the organisation used to
create, communicate and deliver market offerings.
External Micro environment – small forces external the company that
affect its ability to serve its customers.
External Macro environment – larger societal forces that affect the
survival of the organisation.

 MICRO-ENVIRONMENT
The micro-environment consists of customers, partners, and competitors.
The most important aspect of micro-environment is the customer market.
The final aspect of the micro environment is publics, which is any group
that has an interest in or effect on the organization's ability to meet its
goals. For example, financial publics can hinder a company's ability to
obtain funds affecting the level of credit a company has. Media public
include newspapers and magazines that can publish articles of interest
regarding the company and editorials that may influence customers'
opinions.

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 MACRO ENVIRONMENT
The macro environment is made up of factors that affect the firm on a
long term basis. In general macro environment factors are not close to the
firm. Macro environment factors could be national or global and affect
many industries and groups. Macro environment examples include
legislation, the economy (e.g. recession, inflation, VAT changes), and
technological change such as the internet. Macro environment factors are
uncontrollable factors but still influence company strategy.

1. Demographic Factors:
 It is related to population and population mix. It is people
who contribute to demand. It is manpower which helps in
production and supply. Thus a Retailer must understand the
demographics of the nation. Population growth , population
mix and household are key demographic factors.
 The stores of adidas are mostly in the urban areas, so the
walk-in customers are mostly nuclear families and the
youths.
2. Economic Environment:
 Retail sales are driven by the economic environment.A
robust economy correlates to an increase in consumers'
disposable income, increasing sales and allowing retailers to
sell more valuable goods, such as high-end electronics. On
the other hand, a sluggish economy decreases consumer
confidence and can cause people to spend less, leading to
declining sales and forcing retailers to lower prices.
Economic environment comprises of income and wealth,
employment levels, productivity and efficient allocation of
resources.
 Economical issues within Adidas’s organization are the fact
that they provide employment within a variety of countries
worldwide; moreover to decrease outlay Adidas has agreed
‘manufacturing contracts’ to other countries Therefore, the
majority of factories are based within the Asian region.

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Cultural & Social Environment:
 Changes in social values and trends impact the goods
retailers sell and how retailers relate to consumers. The retail
industry is often under pressure to develop and implement
 socially responsible business practices, such as selling
environmentally-friendly products, placing warnings or
restrictions on potentially harmful goods, and removing
recalled or controversial products from the shelves.Nature is
the source of raw materials for the production of a product.
The raw materials may be renewable, infinite or depleting.
The raw materials should be preserved and wastage must be
minimized. Pollution should be minimized to preserve the
ecology. Retailers in the current scenario try to Go Green
and promote the Eco friendly Concept.
 No such cultural environment is followed by Adidas, as it is
not an Indian brand.
 Social elements considered within Adidas’s, are that they
sell their foot ware products worldwide, however they
consider where their highest potential customers are.

3. Political & Legal Environment:

 Political environment is Government actions which affects
the operations of a Retailer or business. These actions may
be on local, regional, national or international level.
Business owners and managers pay close attention to the
political environment to gauge how government actions will
affect their company. Legal environment is the set of rules
and regulations to be abiding by law stimulating and
surrounding the business is known as legal environment.
Laws, regulations and other Government policies can have a
number of positive or negative effects on the retail industry.
 Political factors within the store are issues such as their
employees’ health and safety, in addition to ensuring that
their employee’s rights are kept.
 Legalmatters within the company such as adhering to the
advertising standards and the sales and supply act. Adidas
obeys these procedures in order not to be fined.
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4. Technological Environment:
 Technology not only creates new products for retail
companies to sell, but also plays a major role in changing the
 way retail companies do business. Technological
advancements such as the Internet offer retail customers
additional shopping options. Technology also opens new
retail markets. A Retailer must be aware of recent
technological updates. Being technologically upgraded and
using the latest technology provides competitive advantage
over the competitors.
 Using quality information systems and consistently updating
their webpagesgives Adidas the opportunity to have
efficiency in operations which primarily will improve their
overall production. Therefore by doing this it will offer a
high standard of customer service, likewise it can keep them
in the lead of their market and may even give them an
advantage over their competitors.

5. Natural Factors:
 Natural environment is the important component of the
nature i.e. Natural environment Natural environment
includes geographical and ecological factors areas are as
below:
• Weather
• Climate conditions
• Topographical factors
• Location aspects in the global context
• Port facilities are relevant to business.

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ETHICAL ENVIRONMENT
CUSTOMER THEFT

CASE STUDY 1-
This happened a few months back, where a nuclear family entered the store and
tried everything that was available at the store. When they came towards the
caps section, they tried almost all the caps and suddenly when the staff was
diverted towards one member, the other took the cap and started walking
towards the door. The cap was out of the store without anyone noticing it. After
two days when the stock audit was done they got an error and when checking it
with the inward, they got to know that one cap hasn’t been recorded in the
system and when the camera’s where checked of the whole week, they found
the people who took the cap and despite everyone being at the store, they did
not know how it happened.

CASE STUDY 2-
This happened two months back, where a nuclear family of 3 members visited
the store. Without being noticed the small boy took a shirt out of the hanger and
put it in his mom’s handbag and his dad was busy talking to the staff. When
they found the mis-match between the audit and the global count, they checked
the camera’s and found out that the boy put the shirt in the handbag and his
mother checked her handbag, despite seeing the shirt she closed the zip of the
bag, and without purchasing anything they left the store. The loss was beared by
the staff members because they are the one who should be attentive when in the
store. The loss was divided equally between the staff members.

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EMPLOYEE THEFT:
There is no such case of employee theft because the employees are
checked by security guards every time they leave or enter the store.
There are CCTV cameras through which they can easily catch any
mishappening in the store.

SCREENING OF THE EMPLOYEES:

 There are two ways for selecting the right person for their
company
1. The company’s HR manager sends qualified employees in
different store.
2. An employee brings a qualified employee interested to work
with the store.
 Before selecting an individual as an employee for the store the
individual goes to an aptitude and personality test.
 They make sure employee is having effective speaking skills.

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CONCLUSION

Based on the all the data we collected, we conclude that overall customers are
quite satisfied with the products and services that is offered by Adidas. Overall,
2016 was a quite successful year for Adidas and 2017 opened on a strong and
favorable note. The brand’s financial performance has improved owing to its
increased focus on marketing in the recent years. The financial highlights also
prove that outlook for 2017 is favorable. Apart from the economic and socio
political challenges, the market dominance of Nike is the only major challenge
before Adidas. The brand would have to continue to focus on its marketing and
product innovation to stay competitive. Some competitive threat also exists
from the other brands like Puma and Under Armour. For further growth, it must
focus on the emerging markets like China and India. Its performance in greater
China and Japan was great and India also holds potential as a market. Moreover,
the trends bring great opportunities for brands like Adidas. Its new three
pronged marketing strategy is already generating wonderful results.

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 SUGGESTIONS

 In terms of price and design, Adidas might need to put in more effort and
come out with a newest design that can attract more customers.
 Adidas can also launch a promotion or give a special offer of price in a
certain period of times to increase the sales volume and attract more
customers.

 Adidas might also need to come out with a better idea on advertisement
to promote and differentiate its product from its competitive. Because in
overall, Adidas advertisement has less influence in consumer’s mind and
therefore become one of its marketing weaknesses. We would suggest
that Adidas can invite famous athletes or artists as a brand spokesperson
to make it a more memorable brand name in consumer mindset.

 In term of services, customers also were quite satisfied with Adidas

services they provided and we believe Adidas still able to improve their
service to serve their customer even more sufficient to truly maximize
their sales and make their customer satisfy and happy each time they
enter and leave Adidas store.

 The store can have burglary alarms to avoid shoplifting.

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 REFERENCES

WEBLIOGRAPHY:
1) https://www.adidas-group.com
2) http://www.Adidas.wikia.com
3) https://www.adidas.co.in
4) https://www.marketing91.com
5) http://www.adistats.blogspots.com
6) http://www.logaster.com
7) http://www.prezi.com

PRIMARY SOURCE:
1) Adidas Store – Banjara Hills, Road no.1
Opposite to Levi’s

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