to monitor the growth of not only retail sector but also that of the organization. Some laws ensure safety for consumers, companies, manufacturers, and more. This book includes a comprehensive industry analysis of the five forces of competition, a look into the supposed free market economies of the world, and the pros and cons to the inevitable competitive race to the manufacturing bottom of the world. Copyright 2023 IPL.org All rights reserved. Technology is helping consumers get the fashion they want, ax restrictions, export restrictions, and inflation costs, What is PESTLE Analysis? [emailprotected] Therefore, any technological change that increases business efficiency will be embraced by Uniqlo and will impact the brand positively. PESTLE Analysis of Mango analyses the brand on its business tactics. See Appendix point 1. Moreover, there have also been a constant increase of trade flow all over the world (European commission, For instance, the world population is aging (OECD, 2013a), therefore, changes in demographic may be dangerous to solely teenage-oriented apparel firms based on the fact that competition for that segment is gradually diminishing (e.g. SWOT analysis to PESTLE analysis. Global economic condition also had a great affect in, Substitutes include other brands of specialty apparel. 1. Due to the costs of these materials, it could force wholesalers to increase the prices of clothing anytime they encounter shortages of material. Thesis: How material elements of the modern fast fashion practice reinforce the meanings of unethical production, and thus explain low prices come with low product quality and negative environmental and social impacts Some of the high fashion brands in the beauty industry manufacture clothes from ordinary to luxury mass scale fashion. Vienna: United Nations Indistrial Development Organization., In the case of SHL it could result in people postponing the purchase of new clothes or buying the cheaper alternative, unless SHL is willing to decrease their price. PESTEL refers to the Political, Economic, Social, Technological, How about receiving a customized one? 3. If that happens, it will most probably shrink the market share for Airbus. This could also benefit Velocity Clothing sales by reputation of being a more green company. For example, a PESTLE analysis could help a clothing business to decide . However, the sales of any business mainly depend upon the economic conditions of the country where the brand is operating. For example, when we talk about London Fashion week . This information needs to be considered when selling the products and considering the target audience. The PEST analysis in some cases is expanded with two additional factors, namely; legal and environmental aspects. Technological. Founded by Mr. Chang Yun Chung. Free PESTEL Analysis | Free PESTEL Analysis. PESTLE analysis is include of political, economic, social, technological, legal and environmental factors. As environmental degradation is taking place, countries have made policies regarding waste management and recycling. Fashion and Role Models What consumers buy is largely influenced by what celebrities and role models wear. However, before that, we made our readers aware of PESTLE analysis and the need for conducting a Uniqlo PESTLE analysis. 2. Manufacturer is located in many third world countries: Central America, China, Cambodia therefore Levis can switch to other manufacturer easily. Having the name attached to Emails, pop-ups advertising the company, advertising on such things as Google and other popular sites. However, its not that the brand is only famous in Japan. Other than that, Uniqlo is impacted by the business laws in the country. Abstract. Yet all businesses have legislation which must be followed and any changes in legislation in the future could affect how Velocity Clothing operates on a day to day basis, or in the long term. These types of consumers are extremely impacted by the current socially acceptable fashion trends. The Global Apparel Value Chain - What Prospects for Upgrading. Several economic factors influence a company's past, present, and future, and analysts do nothing but study these factors to make proper financial decisions for a company or an industry. Consequently, many customers have gone green and they are persistently advocating for sustainable and ethical activities of firms (Johansson, 2010; Pookulangara. She shares the 8891 Km of land border with the US. Trends What is the latest trend amongst the target audience? The Companys Goal COMPANY OVERVIEW. Changing fashion trends within a society is something that Uniqlo closely monitors because it has to keep up with the trends that exist in the society where it operates, or else the brand can experience a drop in its sales. A company may have many messages, but they do not have something in common. Table 2 depicted, (PESTEL) Political, Economic, Social/ Cultural, Technological, Environmental and Legal external factors. Taxes - business taxes and any other taxes that Velocity clothing must pay are mandatory and must be paid, affecting the amount of outgoings they have, variation in this may cause more or less outgoings but any changes could be quite significant. Tariffs, quotas, foreign exchange risk, and other import restrictions can affect the supply and cost of clothing. In 1884, Michael Marks started his own business in Kirkgate Market, Leeds by opening a penny bazaar stall. Outputs from the analysis inform strategic . PESTEL ANALYSIS Pestel is a strategic analysis tool used by organizations to scan the macro-environment in which they operates, helps to identify external factors that can affect the organization's business activities and performance (Gockeln 2014). Although it is an expensive brand, people still go for it as it adds luxury to their . Amazon PESTLE Analysis Example. The company owns over 350 stores The company was established in 1969 in Ireland and has grown in size to great heights since it was founded. A PEST analysis is used by business analysts to identify the external factors that impact any business. These may include additional quotas, duties, tariffs, or other restrictions or regulation. York University 7 to show the internet usage on a global scale. All Rights Reserved, the highest percentage of the population above the age of 65 years, revenue of $1.9 billion through e-commerce, General Mills SWOT Analysis: 3 Opportunities to Gain Competitive Advantage, Root Cause Analysis: An Easy 6-Step Complete Guide, Mayo Clinic SWOT Analysis 2023: Healthcare Business Checkup, 3 Top Tech Tools for the Modern Commercial Contractor, Strategies for School and College Security, Steps to Secure your Business After a Cybersecurity Breach. These are the changes that have affected today's clothing. However, even in the time of recession, the retail industry had maintained impressive sales. For example, recently, Uniqlo was in the line of fire after sacking some of its employees. Because the EU textile and clothing industry is a leader in the world market, and its product is required all over the world, the European Union work to ensure a level playing field and inaugurated free trade agreement in the EU-28 through the application of the world trade organization agreement (WTO). In such countries, Uniqlo wouldnt prefer to invest because Uniqlos products mainly attract young people. Country Relationships/ Attitudes Countries that have long lasting feuds or discrepancies that have not entirely been solved which could have occurred from past wars or conflicts could affect the willingness of foreign companies to trade with Velocity Clothing. A 'PESTLE' analysis looks at six key factors - Political, Economic, Social, Technological, Legal, and Environmental. The Apparel Industry. However, due to the high demand of the US apparel stores for Chinese products, the low cost, which was the main reason why raw materials are being purchased from China, have increased. Moreover, as social media usage increased, Uniqlo started using social media platforms like Instagram and Facebook for marketing. PESTLE or PESTEL Analysis is a tool which helps companies have a ten thousand foot view of the macro environment it is operating in. The producers in the new T-shirt value chain do not operate in a free market system. This is an example, If government intervention was removed from all segments of the new T-shirt value chain, the current leading producers would gradually lose their dominance as global competition intensifies. Since Uniqlo is a multinational brand, it must keep an eye on global politics, or else it can suffer. PESTEL analysis - The clothing market in the UK Introduction Presentation of the UK fashion industry The UK fashion industry is a big one and well reputed. Political Factors Trading Policies any new trading policies formed between countries could make it easier or harder for countries to trade with each other, which could be a potential issue for the accessibility of goods for Velocity Clothing. Initially, this move didnt prove to be very sensible since the brand experienced losses due to some mistakes related to sizing. Now that we are done discussing the PESTLE analysis lets proceed further and carry out Uniqlos PESTLE analysis. Many workers within the fast fashion business . Trading Policies any new trading policies formed between countries could make it easier or harder for countries to trade with each other, which could be, For example is an old aged pensioner more likely to buy a brand new latest fashion luxury garment that is extremely popular with the younger generations? This article is about a detailed PESTEL Analysis of the Fashion Industry. In that case, Uniqlo might have to suffer because of that. According to the author Pietra Rivoli, the winners at various stages of my T-shirts life are adept not so much at competing in markets but at avoiding them. These winners include the U.S. cotton farmer and the China apparel industry. 1119 Words. Therefore, the significant legal factors that can cause some shifts in the fashion industry are as follows: If you are using the offline version of EdrawMax, open the tool in your system. Legal Current and Future Legislation Rules and regulations which Velocity Clothing must follow, it may limit what they do, including store opening hours for example, but by not complying with these legal requirements can result in large fines and prosecution. Businessmen and women who are highly educated and are able to more easily afford the products? Instead, unskilled workers and innocent citizens of developing countries must compensate for the atrocious subtracting of the fast fashion industry. A Canadian Approach to the Apparel Global Value Chain, [online] Available at, American Apparel ran into many risk factors such as finances and growth which included the ability to gauge fashion trends to consumer preference while still being able to be highly competitive (American Apparel, 2012). After that, the brand emerged from Japans markets and spread worldwide due to its low prices, comfortable clothing material, and cool outlook in no time. If you visit Japan, youll see a Uniqlo store after every corner. As aptly provided in website of The Honest Company (2016), its goal is to deliver the best family essentials to. The brand will experience a lack of sales since fewer customers will visit the store in such circumstances. This industry mainly sells clothes and accessories, from local or foreign brands, small brands, or luxury brands, depending on the consumer's economic condition and needs. Annual Revenue. Introduction Now that we have discussed Uniqlos background and current operations with you lets proceed further and conduct a Uniqlo PESTLE analysis. Zara. For example, this political external factor is a threat because it puts pressure on McDonald's, which has been the subject of criticism regarding the effects of its products on consumers . For example "Do everything easily", "Go ahead and be powerful" or Dig deeper and be experienced". The brand focuses on providing casual clothing options to both genders. This article took a deep look at the history of Uniqlo and highlighted the current operations of the brand. Climate and the environment have a direct or indirect impact on everything. Economic factors: a new way to stay fashionable without breaking the bank. Gucci PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Such activities could affect the accessibility of these materials and the reliability of the suppliers, which in turn could affect the price of the good. Shannons findings are interesting and some relative information pertinent to my thesis, but overall is not necessary for my essay. Moreover, sudden climatic changes can affect the sales of Uniqlo, which will impact the operations of Uniqlo negatively. As the brand is increasing its international presence each year, its revenue is also increasing yearly. Currently, the brand has 2,347 outlets all over the globe which helps the brand to generate huge sums of revenue. Watch this video if you if you want to understand key concepts of PESTLE analysis. After analyzing the brands success, we decided to carry out Its PESTLE analysis. Much of the supply of cotton was wiped out due to floods which causes the price to go up as well. Suppliers of Velocity Clothing may also increase their prices if they are also affected by the price of raw materials going up. The day to day price changes which Velocity Clothing will encounter may be quite small, but still are noticeable. b) The production of fashion goods by designers, manufacturers, contractors, and others. This article highlighted the external factors affecting the operations of Uniqlo. In fact, aside from the fact that it hosts many clothing ceremonies or events, it also shows the place given to fashion in the country. Relocating the garment industry to the global South can arguably be the downfall of workers as they are sacrificing their lives for their job. Through management methods and outsourcing, firms search for the lowest costs for the consumer, without concern about the consequences for workers. PESTEL Analysis Definition. According to an estimate by Statista, the worth of an online retail clothing e-commerce business was 102.5 billion dollars, and it would increase by approximately 153.6 billion dollars by the end of 2024. The PESTLE analysis refers to the screening of political, economic, sociological, technological, legal, and environmental aspects of the macro environment. Analyze the Woolworths Africa external competitive environment to identify opportunities and threats. Social norms, regulations, and ideologies play an essential role in the case of some of the industries. Therefore, the higher the sales would be, the higher the brands profits. Keeping up to date and providing clothing that is fashionable and attractive to the desired target audience is extremely important. method to analyze the macro environment of an industry. Political factors. In many countries, strict actions are now being taken if businesses dont filter their waste before disposing of it and dont take measures to mitigate their carbon emissions. 1503 Words7 Pages. See Appendix point 1. Trade policy is how a country carries out trade with other countries (Commercial Policy, n.d). The PEST analysis includes taking into account the political, economic and social factors, along with a technological analysis to determine the market outlook, to forge plans to steer the business in a specific direction. For example, intellectual property laws provide security to the brand and make it easier for it to function. For example, Vietnams apparel exports to the U.S. jumped to $7.1 billion in 2012 from $6.6 billion a year earlier. This technological change has benefited a lot of brands, including Uniqlo. Are the shops located in an area of high or low levels of education? Coneen by design ltd). Fashion and Role Models What consumers buy is largely influenced by. After that, we proceeded with the PESTLE analysis and highlighted the Political, Economic, Social, Technological, Legal, and Environmental factors that affect Uniqlo. Technological. Moreover, the clothing brand also has to study the demographics of each country in detail because demographic factors significantly impact Uniqlo. Sitemap, look into the many factors that influence fashion as we know it today, Political factors: Fashion icons in the White House, Economic factors: a new way to stay fashionable without breaking the bank, Social factors: the impact of musicians and everyday life, Technology: anyone can be a fashion designer, Legal factors: companies still having their clothes sewn in foreign countries to cut costs, Environmental factors: fashion isnt safe for the planet, But the women in the White House are openly discussed, People who are low-income or live in an area with a high unemployment rate, Music has always had a massive impact on fashio. Similarly, technological factors greatly impact Uniqlo since the clothing brand significantly muse technology to carry out its operations. In the end, we hope our readers are now aware of the external factors affecting Uniqlo as well as the framework of PESTLE analysis. Strategy planning process often requires five steps -. Similarly, businesses are also affected by environmental factors. Consumers seeing lower prices could boost further sales. In this way, the technological developments significantly impact the operations of Uniqlo. PESTEL factors. In turn any changes in these prices could affect the price of the product when being bought off the shelf by the consumer. Price of raw materials going up expanded with two additional factors, namely ; legal and aspects. With you lets proceed further and conduct a Uniqlo PESTLE analysis, legal and environmental aspects technology to out. 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