A Pestel Analysis of a Clothes Manufacturers and Suppliers

Business Environment Assignment 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. In all six sections; political, economic, social, technological, environmental and legal there are issues that the firm would face. However, some have more significance to others. Although political, technological and environmental factors would have a big affect on the firm, when looking at the three most important issues facing the firm; social, economic and legal come out on top. Firstly, social factors play a massive part in the external environment of the firm. For-fronting the part it plays could be, as brought up in the PESTEL†¦show more content†¦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 help generate more sales. In this economic downturn there has been a big depreciation in the pound sterling. This has made exports more attractive (however, fall in value of pound means its not exactly positive) and importing more expensive. With the firm mainly supplying the UK market with some operations abroad it will be affected by this. If raw materials are being imported into the UK for use in production then the firm will be paying a higher unit price for these. This of course will add to the running 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 case 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 aShow MoreRelatedHM Analysis1227 Words   |  5 PagesIntroduction In this report, an inside look will be taken on Hennes Mauritz AB (HM). We will analyse on it using PESTEL, Porter’s Five Forces and SWOT to get a clear concept of what HM is today and where it can go. This positioning will be helpful in strategy designing. Company activities HM was established in Và ¤sterà ¥s, Sweden in 1947 by Erling Persson. 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