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Introduction

This overview report explores the sportswear and sports footwear industry within Germany. Germany, a G7 country, has made an eminent contribution to the sports apparel industry worldwide. It is a major exporter and importer in the sports apparel industry (Andreff and Andreff, 2007) and home to both Adidas and Puma, the most recognizable sports apparel companies worldwide only after Nike (McCullagh, 2010) (Figure 2-3). Adidas and Puma are companies currently dominating the German sports apparel industry, both holding their headquarters in Germany (Figure 4). This report will examine the major current trends and the future of the global environment influencing the German sportswear industry.

Impact of Major Economic Trends


Current
The global financial crisis was a period where the German economy collapsed, its gross domestic product dropped and the recession was stronger the previously largest decline in the 1975 oil crisis (SIPPO, 2010). However, earlier this year, research conveyed domestic demand would help underpin the country's the countrys brisk rebound from the financial crisis (Fairless, 2011). German consumer confidence is set to increase further after a rise in income expectations (Reuters, 2011). Meanwhile, sales growth was recorded in Germany as Adidas improved its profits to eleven percent from last year (Inside Fashion, 2011). Europeans disposable incomes may have been under pressure, however these markets (sportswear and footwear) wont disappear. Theres still plenty of opportunity out there in these markets (Inside Fashion, 2011) (Figure 5). Retail turnover in August 2011 in Germany increased 3.6% in nominal terms and 2.2% in real terms compared with the corresponding month in the previous year (WOLLGRAMM, 2011).

Future
The sales which are predicted to keep increasing, triggered by improved economic conditions, will not feed through to retained earnings, as for increasing raw materials costs, cotton and oil prices (Bryan, 2011). Chief executive of Adidas claimed,

If input costs continue to rise at such a pace, then the challenge will undoubtedly intensify and lead to further
margin pressure for our industry beyond 2011, ... High commodities prices are affecting a variety of companies in the industry ... To counter the negative effect, Adidas will maintain strict cost control and optimize production and sales processes ...However, these measures won't suffice to completely offset the price pressures

(Reuters, 2011). Chief Executive of Puma also stated as a result, consumers can assume increased prices up to 10% into 2012 (Bryan, 2011).

Major Political/Legal/Governmental Influences


Current
Without a robust system of universal justice, a significant issue the sportswear industry in Germany is facing due to globalisation is labour rights violation. The labour intensive industry means most production is moved to low-wage countries (Locke & Romis, 2006) to reduce manufacturing costs. (Figure 6):

(University of Cambridge Institute for Manufacturing, 2006) Given the narrow ability (and possibly willingness) of various developing country governments to enforce their own labour laws and the majority of apparel workers being women under twenty-five (Clean Clothes Campaign, 2004), they inevitably work under unreasonable terms of employment and poor working conditions (Clean Clothes Campaign, 2004). While there has been progress in reducing labour law violations internationally such as where Nike has admitted its faults and made significant changes (Dusen, 2008), the issue is still prevalent in the two leading companies in Germanys sportswear industry. Puma failed to follow labour standards and caused 101 workers to lose consciousness at contractor in Cambodia (ABC, 2011). Similarly, Adidas' is currently considered the worst in the industry (Dusen, 2008) with workers forced to send their children away to distant families to make ends meet (Adidas Synthasite, 2008).

Future
Thus, the future of the sportswear industry in Germany will involve a continuing campaign to reduce labour law violations to shun the negative effects and lost proceeds that Nike and Reebok received earlier (Dusen, 2008). The sportswear industry, particularly in Germany, must take more steps to enhance code compliance, only deal with businesses that meet international labour standards and discover a lasting resolution to mistreatment of employees.

Current/Future
Furthermore, another legal issue the German sportswear industry faces is counterfeit goods. For example, Adidas claims that footwear sold by Payless Shoes in its Canadian stores infringes against the German companys threestripes trademark (JustStyle, 2009). The German sportwear industry will need to continually seek to protect trademarks the way leader Adidas has vigorously sought to protect its most important brand symbol internationally (figure 7).

Impact of Society and Culture


Current
The key elements of the German society and culture significantly influence the sportswear industry within the country. Soccer is the most popular sport in Germany (Mukherjee et all. 2010). One crucial trend in the German culture affecting the sportswear industry in Germany is the locally rooted soccer culture (Manzenreiter, 2007), compelling the demand and market for sportswear (Manzenreiter, 2001). Germany occupies two previous top positions in the Football Money League, which files the daily revenue from soccer such as money from merchandising (Deliotte Sports Group, 2010) (Figure 8-9).

Future
The future of Germanys football loving culture is unlikely to change, and will potentially involve prolonged intense competition among key players in the sportswear industry (The Independent AFP, 2010). Adidas, the only brand entitled its name on the World Cup Ball habitually (The Independent AFP, 2010), is facing off against its American fierce competitor Nike (The Independent AFP, 2010), who sponsors recurrent world cup champion Brazil, and third challenger Puma, who is expecting double-digit growth (The Independent AFP, 2010).

Current/Future
Another trend affecting the sportswear industry is that consumers in German society nowadays prioritize clothings practicality over style (Breitbart AFP, 2010). Thus, windbreakers and jackets that breathe appear extra frequently in cities (Breitbart AFP, 2010). The outdoor sector was a niche market but the industry evolved as consumers progressively recognised the quality and practicality of these products for an everyday lifestyle (Breitbart AFP, 2010). Wolfskin encounters competition from compatriot Adidas who also desires a portion of the sportswear market in Germany (Breitbart AFP, 2010).

Future
Furthermore, the ageing population (Figure 10) in Germany triggers a keener demand for outdoor sports apparel (Breitbart AFP, 2010). While opponents Nike and Adidas are up ahead, exploiting the trend for healthier living in a increasing portion of the population Puma must wake up to outdoor oldies market as there could subsequently a takeover coming up as a result of Pumas failure to react to the changing fashion (Kuehnen, 2009). Outdoor sportswear attracts more and more young people (Breitbart AFP, 2010).

Impact of Technology
Current
Technological advances are boosting the progress of Germanys sportswear industry. For instance, Germany has recently become home to the biggest golf company worldwide. Taylor-made Golf could not have gained this position without world-class technology as it has marketed as offering high-performance golf footwear and apparel for athletes to maximize their physical potential. Recently, the latest Tour360 footwear was launched, engineered to be lighter, lower and more stable than its predecessor (Figure 11) - (Adidas Group, 2011). Other recent technological innovations boosting the progress of Germanys world-class sportswear industry and making it tough competition is include; a tiny chip in the centre of a ball to aid referees, for example, in football rule whether the ball has completely crossed the goal line (Reuters, 2010) and shirts with bonded special fibers that can monitor the heart-rate (New Cloth Market, 2011).

Future
The world-class technology used by Germanys sportswear industry has made it tough competition for other countries worldwide. In the future, it is likely that there will be continual exciting developments and changes in the sportswear industry in Germany because Germany has invested heavily into research and development in this area since the sportswear industry is an area where it will continually need to advance technologically to remain competitive in the international environment. For instance, recently government funded scientists in Germany found the theory of comfort mapping allowing manufacturers to employ distinctive textiles for various portions of a garment to
use different textiles for different parts of a garment to account for the spatial distribution of heat and moisture production in different parts of the body; for instance, a windproof textile on the chest and back can keep the cold wind out, while a particularly breathable and moisture-wicking textile under the armpits can help keep these areas dry

(Gale Cengage Learning, 2011).

Adidas has also launched its latest high-tech sports performance store, which it plans to unveil globally. Consumers can try on their custom-made perfect-fit shoe design using a three-dimensional virtual mirror. One of the store designers says, customers want to be entertained (Kamenev, 2006). Technological advances are boosting the progress of Germanys sportswear industry as it has made training simpler, more comfortable and more precise claims the director of Adidas running business unit (Kamenev, 2006).

Impact of Environmental Challenges


Current
A major environmental challenge the sportswear industry in Germany faces is reducing Carbon emissions. After Japan's nuclear disaster, the governments renewable energy target ups to 35-40% of Germany's electricity supply by 2020, when all its nuclear reactors would be closed (Gipe, 2011). As a developed country greenhouse gas emission will decrease in the future (Figure 12):

Future
The government pushes to reduce greenhouse gas emissions by implementing policies such as laws to push recycling and making producers pay to deal with packaging they create (Gipe, 2011). Thus, if businesses in the German sportswear industry confront the challenge of reducing carbon emissions now by using renewable energy sources, it will benefit them greatly now and in the future. Pumas executive explains in the future the companies can avoid dealing with the rising cost of raw materials, or re-engineering to become more

environmentally friendly (United Nations Environment Programme, 2009). For those businesses that havent completely switched, they will face aggravating challenges as the government plans to increase its renewable energy target to 80% 2050 (Gipe, 2011). Puma has begun performing carbon-offsetting tasks in supplier countries and says it will work with industry peers to develop a common industry framework and share best practice (United Nations Environment Programme, 2009).

Current
Another major challenge the sportswear industry in Germany faces is the release of harmful chemicals into the environment. Tests found the existence of nonylphenol ethoxylates (a hazardous hormone-disrupting chemical that builds up in the food chain) existent in fabric of clothing bought in EU labels (Shankleman, 2011). EU member states, including Germany, are currently prohibited from manufacturing using NPEs (Shankleman, 2011). Adidas aims to create an industry-wide commitment to detoxing the supply chain by 2020 (Shankleman, 2011).

Future
The obstacle of avoiding the release of NPEs has been dealt with through the EU policy. The past decade has saw a clean-up of the sportswear and footwear supply chain although there is still plenty to be done enforced by globalization. The greater part of businesses in the sportswear industry in Germany including Adidas, Puma and Reebok, have devoted to sustainable business practices with consumers requesting clothes ethically made, and environmental protection laws. Thus, if in the future if other harmful chemical comes up, the German sportswear industry would need be prepared to deal with the challenge as it has with NPEs with corporate social responsibility as Puma has said Puma sees environmental accounting as an investment (Figure 13) and so should the rest of the industry.

Conclusion
Generally, it can be seen that Germanys sportswear industry has been highly competitive and very effective in facilitating globalization across all external influences of the sportswear industry. Sales are expected to continually rise, driven by improved economic conditions. The ageing, health-conscious soccer fans, who prioritize clothings practicality over style trigger a greater demand for sports apparel in the German industry resulting in an expanding sportswear industry marketplace. Germanys sportswear industry offers world-class technology, boosting the industry and meaning it is tough competition on a global scale. Consequently the industry is steadily increasing as technology continues to advance and it introduces new and innovative products and services. However, although it has come a long way, Germany will need to continue campaigning to reduce labour law violations and continually seek to protect trademarks internationally. Furthermore, companies must confront the challenge of governmental powers pushing to reduce carbon emissions by using renewable energy sources and preventing the release of harmful chemicals into the environment as having corporate social responsibility will benefit them greatly in the short and long term.

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