PESTLE ANALYSIS
POLITICAL
The UK’s exit from the EU may cause the UK government to increase taxes; this would have an impact on the profit of the business.
There is a high degree of uncertainty within the UKs political landscape as a consequence of Brexit. Within the UK leaving the EU, companies may face reduced purchasing/negotiating power in the market, this could cause the cost of production to increase, which would mean profit margins would decrease.
Extremism is a constant threat in today’s society. Potential acts of terror may put the customers off from physically going to the stores/shopping centres.
ECONOMICAL
The uncertainty of Brexit will have a massive impact on the UKs economy. The degree of uncertainty and concern from consumers about their jobs may lead to increased saving and reduced spending. Which would have an impact on the sales and profit of companies.
The UKs exit from the EU will likely lead to a weaker British pound. This will give suppliers greater negotiating power.
SOCIAL
Society as a whole is increasingly beginning to understand gender as a spectrum, with greater awareness in which people identify themselves. There is therefore an emerging desire for gender- neutral clothes and products. This will however require greater resources both time and money, to produce clothing that can be worn by a more diverse audience and society.
TECHNOLOGICAL
Cyber crime is at an all time high. Companies must invest more money and time into ensuring that all online platforms are secure. If company’s websites are hacked, customers may lose trust with the company and are less likely to shop with them again.
Consumer preferences have changed as new technology evolves. There are now more ways of a customer purchasing goods, whether this is through online websites or mobile apps. Consumers no longer need to visit the physical store to browse and purchase goods.
Technology advancements may lead to improvements in the production process, leading to improved efficiency and ultimately reducing the cost per unit.
The younger demographic spends a lot of time on social media, such as Instagram, Twitter, Facebook and Youtube. It is much easier in the modern age to communicate directly with consumer to determine emerging customer preferences.
LEGAL
Organisations must pay particular attention to employment laws and the code of conduct. The national minimum wage typically increases on a yearly basis in the UK. For companies this will lead to an overall production cost increase.
Brands now have to charge 5p for the carrier bag levee. This was a new law that was introduced in 2017.
ENVIRONMENTAL
Consumers are becoming increasingly aware and conscientious of where their products are being sourced. It is now an organisations best interest to act sustainably and in a manner that will not effect the environment.
The production of goods in an ethical and sustainable manner will increase costs. This creates a threat of failing profit margins.