Now that we have discussed Uniqlos background and current operations with you lets proceed further and conduct a Uniqlo PESTLE analysis. Out of which, the company's net income was 0.344 billion US dollars, and it has declined by 75.12%. In such cases, retail brands such as Uniqlo have to suffer since the sales of their businesses drop. For example countries joining the EU and members of the EU can trade almost freely and very easily with eachother. 1. It aims to explore how some of the political, economic, social, technological, environmental, and legal factors influence the UK fashion retail industry. Any change in trends needs to be noticed so Velocity Clothing can cater for the consumers new needs and desires. The economic factors that can play the role of an influencer in the fashion industry are as follows: Society is a big part of any market. 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. However adhering to all of these factors is not cheap and is difficult to maintain. A PEST Analysis, also known as PESTLE, PESTEL, PESTLIED, STEEPLE, SLEPT, and LONGPESTLE, is a strategic planning method that helps business or organizations assess their major external and internal factors influencing their operation. Competition from very low-cost nations in Africa as well as Vietnam, Sri Lanka, Mauritius, Malaysia, Cambodia, Bangladesh, Pakistan, the Philippines and elsewhere is intense, and a large portion of apparel manufacturing formerly done in China is moving to these areas at a rapid pace. These environmental conservation policies have increased Uniqlos operational costs since now the clothing brand has to invest in technologies that help the brand adopt environmentally friendly practices. This technological change has benefited a lot of brands, including Uniqlo. 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. PESTEL Analysis Definition. Since Uniqlo operates in different societies, it has to analyze the social factors that impact the brand. A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is a framework or tool used to analyse and monitor the macro-environmental factors that may have a profound impact on an organisation's performance. In the United State about 20 million people are supporting environmental groups. Italy today is divided into 20 regions, five of which have special status, with special . Among the importance are the brand is viewed as the best benchmark of environmental responsibilities, the brand is proficient about natural notoriety, the brand is fruitful about ecological execution, the brand is settled about environmental concern, and the brand is dependable about ecological guarantees. Founded by Mr. Chang Yun Chung. Wars & Conflict - Velocity Clothing use materials imported . Looking at Uniqlos success story, today we have decided to conduct a Uniqlo PESTLE analysis. As a result, it has to abide by the laws where it operates. Clothing has always been a big business in the UK. The brand that was once an All mens brand changed its business model and name after almost 40 years to become a unisex brand under Uniqlo. Thus, the environmental factors influencing the fashion industry are as follows: Legal factors are the laws implemented in society for its betterment. Definition. For example, intellectual property laws provide security to the brand and make it easier for it to function. Uniqlo is a famous clothing brand that has its origins in Japan. How to Do a PESTEL Analysis in EdrawMax. 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. Francis Aguilar (1967) is the first known reference to the origin of the PESTEL analysis. Michael Marks was from Russia and Thomas Spencer was a cashier from Yorkshire. Bargaining power of supplier low As the brand is increasing its international presence each year, its revenue is also increasing yearly. Entry into a market where the production volume is so high already is not really a threat because the cost of production goes down. Competitive Regulations, Consumer protection, Industry-specific regulations, Employment law all other factors which Velocity Clothing must be aware of as to not break any laws and follow the correct procedures. The regulations from the federal and state governments are changing rapidly and becoming more complex. See Appendix point 1. Global fast fashion market was supported by an increasing youth population's penchant for essential and affordable fast fashion clothing. The highly mechanized forms of production that reduce labor costs are strength of the apparel industry in Canada. Are the shops located in an area of high or low levels of education? Wars & Conflict Velocity Clothing use materials imported from various countries. Weaknesses. Similarly, Uniqlo operates in different countries. Therefore, any technological change that increases business efficiency will be embraced by Uniqlo and will impact the brand positively. 1. 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. PESTEL analysis is critical to understand the external threats & opportunities arising because . Demographics. In 2021, Uniqlo was ranked among the top 100 e-commerce stores. PESTLE analysis : Is a shortcut of six words which is political , Economic , Social , Technological , Legal and Environmental .Usually this concept used in marketing .Also it used as a tool by organization to track the environment they are operating in or are planning to new project or service .Moreover it used to assess the four external factors with regard to the situation of the organization's business ,and how it will effect in the business over long term. Shannons findings are interesting and some relative information pertinent to my thesis, but overall is not necessary for my essay. Firms can be protect the natural environment demand by the public. 8. What is the level of wealth like in the area? Moreover, clothing is linked with ethical values in many societies. PEST is stands for Political, Environment, Social and also Technology. This study alluded to Padgett and Allen (1997), and Cretu and Brodie (2007), and characterized green brand picture as an arrangement of view of a brand in a buyers mindset that is connected to environmental responsibilities and natural concerns. You can also modify the content and take information from this PESTEL Analysis guide. Political factors: Fashion icons in the White House The government has the ability to encourage companies to buy fabrics locally, especially if the taxation on imports from other countries increases. [emailprotected] Thus, demanding for transparency and accountability. Companies and customers should buy and sell recycled products. Legal. . As aptly provided in website of The Honest Company (2016), its goal is to deliver the best family essentials to. Furthermore, it is noted that customers, particularly from developed nations like UK, France and Italy are more and more concerned about their health and the report on individual health expenditure over the last decade by OECD (2011) has confirmed that. by Cheryl Chi Yue Leung (214185045) Other than that, global politics significantly impact the operations of Uniqlo. Environmental (natural), and. As the years go on, producers must find new ways to produce more clothing to make more profit and keep up with demand. Overseas employers pay lower wages based on local standards of living, abusive practices toward their workers or both. In 1884, Michael Marks started his own business in Kirkgate Market, Leeds by opening a penny bazaar stall. 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. The covid-19 outbreak has affected the company's total sales, yearly income, and net earnings. Where Velocity Clothing products are being sold also needs to be considered alongside this information. In that case, Uniqlo might have to suffer because of that. 5 to back this up further of the noticeable effects it can have. The new introduction of new clothing styles by any competitor can shift demand away from past or older fashions, hence a small clothing manufacturer or distributor may need to discontinue certain clothing styles and produce new ones that meet the need of consumers. In 2021, Uniqlo generated revenue of $19.4 billion. (Photo: Public Domain) This PESTEL/PESTLE analysis of Nike Inc. evaluates trends in the company's . PIL initially operated just two vessels only as a regional break bulk operates. Avoiding threats: PESTLE analysis is a multi-dimensional approach to inspect the political, economic, social, technological, legal and environmental domains. The PESTEL Analysis of the Fashion Industry will put forth the ups and downs faced by the company, which simply did not depend on internal factors but external factors as well. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. By continuing well assume you board with our. Technological. Recently, the world has observed a boom in the eCommerce industry. Initially, this move didnt prove to be very sensible since the brand experienced losses due to some mistakes related to sizing. Get 22% Off before it's gone >>, https://freepestelanalysis.com/pestel-analysis-of-fashion-industry/, https://www.google.com/amp/s/pestleanalysis.com/pestle-analysis-of-the-fashion-industry/, 4. 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. 7 to support this. It is hard to determine the exact number of suppliers in this industry; but, in general, majority of them are in Asian countries that can provide low-cost raw materials to US-based apparel stores. With free templates and components, this 2D PESTEL analysis software allows you to add different content to your PESTEL analysis diagrams. The latter has provided people with faster and wider access to more ideas and influences from other cultures and societies, driving demand for wider choice in fashion products. The company's net income for the year was 0.344 billion dollars, down 75.12% from the previous year. See Appendix point 1. Technological micro-environmental factors affecting the clothing industry include the availability of resources, demand, and production. What comes to your mind when you think about Japan? For example, recently, Uniqlo was in the line of fire after sacking some of its employees. Esquel, one of the leading cotton-shirt-manufacturers in the world came from China and it supplies lots of clothing brand such as Banana Republic, Tommy Hilfiger, Hugo Boss, Brooks Brothers, Abercrombie and Fitch, Nike, Nordstrom and Lands End, in addition to private companies (Plunkett Research, Ltd.). Moreover, sudden climatic changes can affect the sales of Uniqlo, which will impact the operations of Uniqlo negatively. How to secure financing as a small business owner, How to Make a Business Plan for Any Business, 7 Crucial Macro Environment Factors to Include in Your Analysis, Macro Environment Examples in the Real World. During the past decades, the retailing industry has gone through many important changes. Amazon PESTLE Analysis Example. She shares the 8891 Km of land border with the US. The government of any area, whether local or central, always follows a set of rules and regulations, and abiding by these rules and regulations is the most important thing. This paper includes an in-depth analysis of each of the five forces of competition concerning the cotton textile industry: industry rivals, threat of entry, supplier power, buyer power, and threat of substitutes., Industry Canada, 2008. A PEST analysis lets you see how your business is affected by current and future political, economic, social and technological factors. Consumers would certainly see a hike in prices on the imported product and in turn could affect the consumers ability to afford neither the domestic made clothing nor foreign made clothing. As a result, the brand has to protect the laws of its employees, or else it can face heavy fines, which will be bad for the company financially. This section of the PESTLE analysis highlights how environmental factors impact Uniqlo. 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. 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