A Pestel Analysis of a Clothes Manufacturers and Suppliers

The PESTEL analysis shown in the appendix portrays al approximately of the issues in the external environment that a stiff manufacturing and supplying highlife mens wearable may experience. In all half-dozen sections political, economic, amicable, expert, environmental and licit there be issues that the riotous would face. However, some view as to a greater extent signifi gitce to former(a)s. Although political, technological and environmental factors would have a big affect on the unwavering, when porting at the three or so important issues facing the unwavering social, economic and legal come out on top.Firstly, social factors spiel a massive part in the external environment of the firm. For-fronting the part it plays could be, as brought up in the PESTEL analysis, the mens dress market is very dynamic. Fashion has its own cycle, but it very stinkyly to to a woefuler placestand, with items coming in and out of elbow room quickly. With retailers changing sto ck usually at least 4 time a year (seasonal clothes) it clear be very hard for a manufacturer to nourish up with. Along with this rapid change, there has been seen a raise in mens fashion consciousness, with more and more premium priced mens clothing appearing.This portraying the difficulty the firm may have at keeping up with its competitors who have somewhat consolidated themselves in the market. However, with low barriers to entry, thereof low initial capital costs to start the business, they may catch up quickly. This on with the a thorough PESTEL analysis may see the firm compete well. Changing fashion has often been take by national social change. A recent form of social change has seen consumers become more ethically driven, with products such as the Fairtrade brand seeing a steep increase in sales, harmonize to their website somewhat ?300m of sales annually (2007 figure).This rise in what is known as the ethical consumer has meant that attention on this front has to be sharply increased. Some companies such as the bath shop have sour focussed solely on a ethical approach. The manufacturing of the firm lead non go unremarked with pressure groups being very much present. Businesses such as Primark and GAP have felt a full force lobby from these interest groups. Primark, who were outsourcing the manufacture of their goods to India, were uncovered by a BBC report. The program showed children plumpning(a) for the outsourced manufacturer and bad wreaking conditions.If the firm was to have bad press besides, say from PETA and animal rights activists, who look very closely at fur farming (for luxury clothing), this may have detrimental affects on factors such as their reputation and finances. This shows issues the firm may experience from pressure groups, so work exit be subscribeed to keep these people happy and too sh atomic number 18holders with similar views. Demographics mentioned in the PESTEL may too conjure up issues for the firm in t he current environment. Demographics include climb on, race and gender.When looking at the age of the population, the firm will need to address the issue to which age group (target market) to supply this luxury clothing too. According to a recent census males aged 15-64 years old sham up 33% of the population, and then a age group within this seems appropriate. However, the disgrace of the group having lower disposable income and new(prenominal) factors will need to be considered. Race and culture will also bring about some issues to the firm. They will have to consider clothing that will be appealing to all races and not recrudesce both culture.This being a small issue but will need to be watched. Secondly, travel on to economic factors that may affect and bring up issues in the external environment for the firm. recess comes out as the biggest threat to the firm at the moment, with many businesses falling into liquidation and great times of un currentty for workers. With Recession comes many problems that the firm will experience. One being unemployment, which according to BBC figures has rose to around 8-8. 9%, these being the worse figures since 1992.Rising unemployment along with a falling national disposable income study in the economy will fall. The firm supplying luxury goods are usually going to be more susceptible to a fall in demand when there is a fall in income. This is because luxury goods are more income elastic. Consumers will be more willing to give up spending on these kinds of goods than say essentials such as toilet paper and drinks. This is an issue to the manufacturer so they will have to hope on considerations such as brand loyalty and correct marketing to push up demand.They may also need to drop their profit margin on clothing to answer nonplus more sales. In this economic downturn there has been a big depreciation in the impound sterling. This has made exports more attractive (however, fall in value of pound means its not on the button positive) and importing more expensive. With the firm mainly supplying the UK market with some operations abroad it will be bear on by this. If raw materials are being imported into the UK for use in exertion then the firm will be haveing a higher unit price for these. This of race will add to the unning costs of the business. Also the few countries they firm supplies they will be receiving a lower price for the goods losing out on the bad exchange rate, which has been at its worse for a decade. Both of these are an obvious issue to the firm but are out of their control, so it is just a scale of sitting and waiting for the economy to be boosted again. One way the government may try to help the economy recover again is through a policy implemented in times of paroxysm called fiscal policy. This comprises mainly of controls on spending and taxation.For example the VAT cut of 2. 5% from 17. 5% to 15% was made in attempt to help businesses abide afloat. Many compa nies passed these cuts straight onto the consumer in order to stay competitive. Another policy installed is the monetary policy, which looks mainly at money supply and interest rates. Interest rates, under the Monetary Policy Committee, were brought down to a very low 0. 5% stated on the entrust of England website. This along with other contributors has led banks to be very stingy with lending money to each other, consumers and business.The firm if it finds itself needing to borrow capital from the banks may find this difficult and with such a weak pound investors may be less willing to invest too. This may be a great issue to the firm as with no constant cash flow partnered with a possible fall in demand it may find itself struggling to compete and stay in business. The final factor of the 3 most important issues currently facing the firm is the legal elements. These will have a big invasion on the business environment of the mens clothing sector such as the social and economic c onsiderations have done too.The legal system in the UK is very complex and there are many laws that the firm will need to abide for business to run. The firm is likely to be affected in the two usual ways by legal factors. Firstly, if new procedures and systems have to be actual then it can affect the firms costs. Secondly, if the laws affect the likelihood of the customer buying the good, it can affect the firms demand. The amount of laws present stupefys it harder for the firm to run with checks needing to be made along many points of the course of the business.The Health and Safety at Work Act, 1974, is one law that would bring up issues for the business. First, they would need to spend money on ensuring the workplace is safe and suitable under the law, this would avoid any possible suing or bad press. Second, training will need to be provided before an employee can work on the firms premise. This will cost the firm and will not see a return until the employee has been working for a good amount of time. Also the risk of employees quitting during training (first few weeks at work is a likely time for one to quite) will mean money is wasted if they do so.Training will not be the only issue cost to the business, things such as reporting all incidents will increase administration costs, as more files are created and submitted for health and safety. The firm may looking under pressure too from other laws such as competition laws and employment laws and issues may go on if they are caught breaking these laws. Competition law will be likely to entertain the firm against other manufacturers who may make cartels or predatory price for example.However, it creates pressure on executives and others to keep by these laws and run the business in the correct way. Employment acts such as the Employment Relations Act, 2004, give certain rights to the employees to stop them being abused by managerial personnel. This has left the firms employees with a greater authority, allowing them to legally call strikes if they have any concerns. This is made more likely to happen to the firm as it is sitting in a recession with high inflation.High inflation can lead to employees demanding higher pay, thus being an issue that the firm will need to keep tabs on. All laws, as said make business practice a very much controlled environment to work in, which has shown to cause business various(a) issues, some stated already. These have mainly been issues that affect the firms costs. One issue that can affect the demand of the goods may be bad press. Many laws put in place to protect people e. g. employment laws and international agreements on human rights or environmental policy, will create bad press if broken.Emissions levels and road taxes may affect the firm if it is importing its raw materials laws may also make it hard for the business to import all the materials they need too or they may need to pay more for the surplus on the amount allowed. All three fact ors from the PESTEL analysis show many issues that the firm will face in the external environment of the mens clothing market. Overall, social, economic and legal considerations bring about more issues than technological, environmental and political elements. However, they too create issues that the firm will need to analyse and consult.The mens clothing market is strongly influenced by social and economic happenings and controlled by laws portraying why they create more issues than the other three. All in all, politics do not play a great role in the manufacture of clothes. Also the mens clothing market being a relatively simple segment in terms of technology, thus low barriers to entry, technological factors do not form many issues. Environmental factors seem to create the most issues to the firm but are closely linked to social and legal and seem more appropriate in these sections.