8 Pages. 1.0) Introduction During the past decades, the retailing industry has gone through many important changes. Founded by Mr. Chang Yun Chung. Global fast fashion market was supported by an increasing youth population's penchant for essential and affordable fast fashion clothing. For the past hundred years the need for clothing increased since the number of people of keeps growing. 1. This analysis is used to evaluate those four factors that can affect the performance of your business analysis and determine how those factors will affect your business in the long run. In such cases, retail brands such as Uniqlo have to suffer since the sales of their businesses drop. 2. The framework examines opportunities and threats due to Political, Economic, Social, and Technological forces. Nowadays, customers are demanding for convenient shopping experience due to limited time in accessing or going to the market in person. A few companies frequently exaggerate or falsify the natural usefulness of their product, and in this manner clients doubt them any more (Kalafatis and Pollard 1999). Moreover, the clothing brand also has to study the demographics of each country in detail because demographic factors significantly impact Uniqlo. Bargaining power of supplier low 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. Today, everybody buys excessive amount of clothes and shoes so companies need to keep up with the people who want their clothes fast like in the article High Price of Cheap Fashion says Fast Fashion is like fast food. Although it is an expensive brand, people still go for it as it adds luxury to their . In order to explicitly analysis the clothing industry, emphasis must be laid on Textile, PESTEL ANALYSIS Saturated markets, fierce competition, and the turbulent macro-economic environment have condemned retailers to reconsider their retail strategy. By Velocity Clothing being fashionable and perhaps endorsed by celebrities will make a greater public awareness of the clothing product and will also make the product to be viewed in a better light. What Is the Macro Environment in Business Analysis? After analyzing the brands success, we decided to carry out Its PESTLE analysis. Besides that, natural disasters caused by climatic changes may disrupt the supply chain of Uniqlo. Lululemons ability to source profitably merchandise may be affected; if new trade restrictions are imposed by The United States and other countries where products are produced or sold. For example, the clothing brand has to be very careful in dealing with employees in countries where employee protection laws are strict. 2. Political factors: Fashion icons in the White House. Therefore, any technological change that increases business efficiency will be embraced by Uniqlo and will impact the brand positively. As a result, Uniqlo started focusing on selling its own clothing, like Gap. However adhering to all of these factors is not cheap and is difficult to maintain. However, In the recession of the 1990s, Uniqlo decided to move its manufacturing to China to lower its production cost. Importance of PESTEL Analysis in Strategy Management & Planning Process. The fashion industry is all about proper marketing. The vision of Yani was to provide stylish casual clothing to everyone. Francis Aguilar (1967) is the first known reference to the origin of the PESTEL analysis. Chinas competition is huge, with Vietnam, the Philippines, Malaysia and Sri Lanka also producing material at cheap prices (Plunkett Research, Ltd.). 1119 Words. PEST Analysis. . 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. The film The True Cost directed by Andrew Morgan, goes into great detail on the global world of fast fashion, and how it affects the global apparel industry. These steps can help you get back, Copyright 2020 Weberience LLC. PEST analysis is one of the most popular management method in differentiate the external factors that affect the organization. While micro environment factors, on the other hand, such as competition norms impact the competitive advantage of the firm. Since Uniqlo operates in different societies, it has to analyze the social factors that impact the brand. Tariffs, quotas, foreign exchange risk, and other import restrictions can affect the supply and cost of clothing. If your company imports its fashion merchandise from offshore firms or uses offshore production, you must verify that your trading partners offer cost savings without engaging in practices that violate human rights in field or factory., Gereffi, G., & Memedovic, O. Ethical / Environmental Fair Trade Issues by not doing business the correct way and by not abiding by fair-trade prices this could have a knock on effect to Velocity Clothings reputation.However paying fair trade prices is a lot more expensive than not paying them. Shannon focuses on the specifics of dietary options and the individuals who believe in purchasing environmentally friendly foods- this topic is not relevant to the thesis as a whole but provides. The SWOT analysis of Carter's is presented below: Strengths. For example, when we talk about London Fashion week . Course Work: Pestle Analysis .BUSINESS ENVIRONEMENT Course Work: PESTLE ANALYSIS "Vesan" Ltd. was established in 1999[1] with scope of business activity "internal and foreign trade, agency and marketing deals with . PESTLE analysis is a tool, or a strategic framework, used to identify and assess key external factors on the macro-environmental level.In the most recent decades, it . The brand took inspiration from the famous clothing brand Gap and restructured its business model. Table 2 depicted, (PESTEL) Political, Economic, Social/ Cultural, Technological, Environmental and Legal external factors. PESTEL is an acronym and the letters stand for Political, Economic, Social, Technological, Environmental and Legal.Also, this framework helps to keep track of all the changes happening in the environment. Businessmen and women who are highly educated and are able to more easily afford the products?This is largely to do with marketing and the target audience of the product. (Lululemon Athletica Annual Report, 2012). The brand kept growing over the years. 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. Since Uniqlo generates significant revenue from its outlets, it requires peace in the market. The PESTEL analysis shown in the appendix portrays some of the issues in the external environment that a firm manufacturing and supplying luxury men's clothing may experience. PEST analysis is an analysis of the political, economic, social and technological factors in the external environment of an organization, which can affect its activities and performance. 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. This is why it is necessary for a clothing brand to be at their toes and catch the . The Global Apparel Value Chain - What Prospects for Upgrading. Copyright 2023 IPL.org All rights reserved. Use the PEST symbols from the left side and add the content to your PESTEL analysis diagram. The environment we live now are not very stable. Wherever people prefer casual, comfortable, and cool clothes, youll also find a Uniqlo store. The countries in which the clothes are produced, there are significant issues with labour regulations, all to accommodate North Americas demand for fast fashion consumerism. Pestle Analysis Examples: Apple. Uniqlos bread and butter are associated with its products sales. Other than that, high-interest rates also impact businesses negatively. Frue, K., 2022. This PESTLE analysis of the fashion industry takes a thorough look into the many factors that influence fashion as we know it today. In the late 1960s, Aguilar published a book titled Scanning the Business Environment in which the now known PESTLE tool was first identified. Reputation impacts Treating staff fairly, giving reasonable working hours, adhering to fair trade prices, by delivering on stakeholders expectations, all these things can improve of ruin Velocity Clothings reputation. Cultural Influences What is the culture of the area the customer lives in? 2. The operations of every business are significantly impacted by the technological changes that occur every day. NATS 1840 Clothing has existed in many cultures for thousands years, and clothes have advanced in their style and functionality over all of these years. In this way, the technological developments significantly impact the operations of Uniqlo. Dependence on Imports - The large majority of clothes sold in US stores is made abroad by low-cost manufacturers. So much that drastic changes may consider Velocity Clothing to purchase from other suppliers in other countries as to be more economical. 3. The Apparel Industry is one of the most competitive industries. The regulations from the federal and state governments are changing rapidly and becoming more complex. The PEST analysis looks at four types of external environmental elements: P -Political factors in an economy include various forms of government intervention and political lobbying, such as . PESTLE is a business tool that used by companies to track and analyse the macro environment in which the company operate. This form of analysis is beneficial in the long run as it helps the company and industry analysts to figure out the influence that the six external factors, namely political, economic, social, technological, environmental, and legal, have on the discussed company or industry. The main focal point of this write-up is the PESTEL Analysis of the Fashion Industry. On the manufacturing side, threat from suppliers of inputs is reasonably low., Manufacturing garments and accessories in developing countries can offer fashion-related companies opportunities to cut fixed costs through reductions in the price of production labor. For example, Vietnams apparel exports to the U.S. jumped to $7.1 billion in 2012 from $6.6 billion a year earlier. Every organization operates in a political system; this is why political factors highly impact the performance of any organization. Choosing the vision, mission and the reason of existence for Woolworths Africa. H&M's annual sales in 2020 was 20.726 billion US dollars, dropping 15.42 percent compared to the year earlier, according to a financial statement. An environmental analysis, or environmental scanning, is a strategic tool you can use to find all internal and external elements that may affect an organization's performance. Is not cheap and is difficult to maintain like Gap pest analysis is one of the,... 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