how would this article apply to one of the Porter\'s Five Forces Adidas latest d
ID: 393703 • Letter: H
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how would this article apply to one of the Porter's Five Forces
Adidas latest decision could influence entire fashion industry Consumer Goods Monitor Worldwide (Amman, Jordan) German sporting goods firm Adidas AG recently announced its decision to use only recycled plastics by 2024 for shoes and clothing. This initiative could be the first step for the entire fashion industry to work together to solve ecological problems, says Alexandra Kaloschina, founder of the Russian textile company Solstudio Textile Group Adidas plans to discontinue the use of so-called primary plastic, which includes among others synthetic polyester fibers, also known as polyesters This material is used in virtually all of the manufacturer's products - from t-shirts to sports tops. However, Adidas new styles of the spring/ summer 2019 collection will contain 41 percent recycled polyester. This way, the company participates in the international fight against plastic on the one hand and in the race for the most competitive products on the other Adidas pledge could be the beginning of a far-reaching environmental movement At different times, Nike, G-Star, Starbucks and McDonald's, Patagonia and H&M, Timberland and Reebok also announced that they would be using polyester made of recycled fibers. However, the fashion companies did not mention a specific date. Stella McCartney was more specific when the company declared not wanting to use primary nylon anymore starting from 2020. Therefore, Adidas recent statement probably marks the beginning of a really big movement as the company produces 920 million footwear and apparel items, and most of the materials used are polyester. This news is forcing many companies to participate in using recycled materials, which is one of the primary demands of the circular economy of our times, said Alexandro Kaloschina, founder of the Solstudio Textile Group, when talking to FashionUnited In Adidas case, the point is not to completely renounce polyester but to stop using so-called primary polyester and replace it with materials that have the same characteristics as recycled plastic or textile materials, the expert explained The problem with making fabric from recycled materials is that it's up to 20 percent more expensive than primary polyester fibers. But the more companies participate in the process, the quicker you can find cheap ways to collect, clean, and recycle the materials, emphasized Kaloschina Another problem of the recycled materials sector is that it is still small compared to the primary polyester industry and that it depends on many factors, such as the drop in oil prices, which makes primary materials even cheaper. However, Adidas latest step towards using recycled materials is not its first. Already in 2012, the company supplied sportswear made out of recycled plastic bottles to volunteers at the London Olympics, and in 2016, Adidas presented shoes that are now sold together with clothes made of 100 percent recycled polyesterExplanation / Answer
Michael Porter’s five forces are
1. Rivalry / Competition in the industry.
2. Threats new entrants into the industry.
3. Bargaining Power of suppliers.
4. Bargaining Power of customers.
5. Threat of substitute products.
After reading the case, we can analyze that Adidas has competitive advantage if it will utilize recycled fibre. So, these initiatives will be compared in the force category of Rivalry / Competition in the sport shoes and apparels industry.
Apart from this, it will face the problem of raw material suppliers as there are few so bargaining power of supplier as a force will be higher to the Adidas.
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