Does the company operate in countries that are considered politically and economically

risky and what are some implications of these risks on the company’s operations?
To answer the first part, yes, Adidas does operate in a few countries which are politically or
economically risky. Adidas has its manufacturing operations in countries such as Cambodia,
Pakistan and Philippines. Adidas has one of its largest market in USA. The executive board of
Adidas has the responsibility of developing an effective risk and opportunity management
system which makes sure that an inclusive and reliable management of all of the material and
monetary risks are set in order.
Implications

 Due to the economic downturns and political instabilities in Pakistan, Adidas has faced
the risk of higher raw material costs.
 If there is a strike held by the labor union in Philippines, the productions are halted which
means that the supply chain of Adidas takes a serious hit and this has an adverse effect on
the profitability of the operations of Adidas.
 Trade policies introduced by countries such as USA make it harder for Adidas to import
and export its products. This leads to a lower profitability ratio.
 Human rights due diligence is being increasingly formalized and regulated with pan-
European directive of the EU which means Adidas will have to test current legal
frameworks in order to determine their results

Does the company operate primarily in civil law or common law countries, and what
implications do different legal systems have or may have on the company’s operations?
Adidas operates in several different countries. However, it primarily operates in common law
countries (UK, Australia, and New Zealand). Furthermore, its operations are also based in
common law countries. Adidas has participated in various legal proceedings for different reasons
in its normal course of business. It has been a promoter for enforcing its intellectual property
interests aggressively and actively. Adidas has been a defendant or plaintiff in various civil
actions in U.S.

Implications of common law countries

 The ruling of the higher courts may have an adverse effect on the business, written
statutes, and governing areas of Adidas.
 The common law is usually built upon the history of the country and the past rulings of
courts on cases in techniques of laws that are applied for specific situations.
 The judges of the highest court also hold the power to interpret the law when faced with
unique circumstances for any individual or corporations case.
 Adidas is a member of the Business software Alliance which means that the company is
responsible to stop infringement of copyrights of software which is developed by the
BSA.
 Adidas promises its customers a customer support for its original product purchases
which can become a hassle when it happens in other developing countries