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Political Environment of Adidas in Us

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Submitted By chowkayin
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For the political environment in U.S., government intervention in marketing tends to be relatively minimal compared to other countries. However, the U.S. government still steps in to support and protect American industry from competition from overseas in a certain extend throughout years. (Boundless,2014)

Although some people argue that it is politically impossible to cut tariffs unilaterally in the United States, in fact most U.S. tariffs are already close to zero. Nonetheless, tier one items including shoes and clothing account for less than 6 percent of total imports, but tariffs on these items account for 47 percent of U.S. tariff revenue (The Heritage Foundation, 2013). It may reduce the rivalries from foreign countries towards the industry of sporting shoes and clothing as well. But on the other hand, the political intervention among US companies is minimal, the market is relatively free inside the US, so there are lots of companies among the industry and the competitive rivalry is still intensive after the effect of tariff.

Also, In the United States, the average tariff on products from developing countries is much higher than on products from developed countries. For example, imports from Bangladesh faced an average U.S. tariff of 15 percent in 2012, but imports from Belgium faced an average tariff of just 0.7 percent (The Heritage Foundation, 2013). It may seriously affect the cost of sporting shoes and clothes as many of the suppliers are coming from the developing countries due to the low labour cost. It will reduce the suppliers in the industry and hence raise the supplier power.

Reference
"Political Environment - Boundless Open Textbook." Boundless. N.p., n.d. Web. 19 Oct. 2014. <https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/the-marketing-environment-3/external-factors-31/political-environment-165-7603/>.

"Tariff Reform Needed to Boost the U.S. Economy." The Heritage Foundation. Bryan Riley, 29 Apr. 2013. Web. 19 Oct. 2014. <http://www.heritage.org/research/reports/2013/04/tariff-reform-needed-to-boost-the-us-economy>.

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