PESTLE Framework, Its Advantages and Disadvantages
The PESTLE framework is a tool with the help of which one can analyse the marketing principles of organisations. PESTLE is an acronym that stands for political, economic, social, technological, legal, and ecological (environmental) factors. The political environment is composed of legal systems that govern a company’s operations (Hamilton & Webster 2018). This element is crucial since politics plays a fundamental role in all countries (Mukherjee 2016). Some scholars view political factors along with legal ones because they consider them inseparable. For instance, governments create laws that form the legal atmosphere in which an organisation works (Hamilton & Webster 2018). Hence, this part of the analysis allows identifying a business’s strengths and weaknesses in the field of politics.
Other elements of PESTLE analysis are not less important for the successful development of a firm. The economic constituent involves spheres of influence on the economy, such as exchange and interest rates, economic growth, domestic and international policies, and inflation (Hamilton & Webster 2018). The social environment is related to society’s cultural and social organisation. Social issues that can affect a business include wealth distribution, education, work conditions, and employment (Hamilton & Webster 2018). The technological area covers the skills and knowledge that society owns. Organisations are particularly attracted to technological advances that they can use commercially (Hamilton & Webster 2018). Finally, ecological factors involve the criteria impacting the surrounding environment, such as weather, climate change, or geographical location. The significance of each of the PESTLE components is different for each industry. However, it is necessary to conduct an analysis of them all to establish the right strategy.
As well as other techniques used for analysis, PESTLE has its benefits and limitations. The major advantage is the possibility to arrange a simple framework for a company’s investigation. Other positive features are the elimination of potential threats to one’s business, the opportunity to evaluate prospects of new market entries, and the improvement of strategic thinking within a company. Meanwhile, the main limitation of PESTLE is the likelihood of excessive simplification of data exploited for decision making. Other disadvantages involve the necessity to perform the analysis on a regular basis, the likelihood of collecting too much information and not knowing how to assess it, and the subjectivity of some conclusions. Therefore, it is crucial to perform the PESTLE analysis carefully and utilise findings with caution.
Burberry
The Social Impact on the Macro Environment
The social effect performed by Burberry’s business operations cannot be overestimated. The company is one of the most widely recognised and loved by consumers, which allowed it to be included in the list of top luxury brands (Sung et al., 2014). Due to the extension of its products’ categories, Burberry has granted easy access to its garments and accessories for many new clients. The extent of the organisation’s social impact is governed by its ability to encourage consumers’ thinking of the brand as the expression of their identity (Sung et al., 2014). One of the effects produced by Burberry is the expression of belonging to a certain sub-group by means of clothing (van Grinsven & Das 2014). Research indicates that individuals consider Burberry capable of presenting their sincerity, excitement, or sophistication personality (Ayman & Kaya 2014). The company has reached such an extensive impact due to employing social networks (Godey et al. 2016; Park & Kim 2015). Therefore, it is viable to conclude that Burberry has a rather positive effect on the macro environment since it has the potential to govern society’s preferences and values.
The Environmental Effect on the Macro Environment
While Burberry’s influence on the macro social environment is rather positive, it is not possible to say the same about its environmental effect. Like any fashion industry, Burberry is responsible for excessive consumption of resources, such as water. Also, the organisation shares the responsibility for greenhouse gases emissions and toxic waste with other fashion retailers. The company even received the infamous title “Bloody Burberry” based on the investigation of its damaging processes (Anguelov 2016, p. 166). Hence, it is not possible to call Burberry, a green organisation because of its harmful activities. However, Burberry is striving to reduce its environmental footprint by improving its dyeing mechanisms (Roy Choudhury 2014). Thus, it is relevant to note that Burberry’s environmental effect on the macro environment is largely negative, but it has implications for improvement.
Gucci
The Social Impact on the Macro Environment
As well as Burberry, Gucci has a strong positive social impact on the macro environment. Gucci’s clothes are known to be “hip, lively and up to the world” (Ahmad, Ashraf & Shaikh 2014, p. 90). Gucci is well represented on social media, which makes it easier for the company to reach out to consumers and affect their behaviours. The brand offers its clients a unique opportunity to customise their own garments (Godey et al., 2016). At the same time, it is crucial to note that Gucci’s clients are prone to conspicuous consumption – buying luxury goods to signal status (Johnson, Tariq & Baker 2018). However, recently, the apprehension of being negatively evaluated made Gucci’s customers turn to pro-social product pursuit. Thus, the company has the potential to influence the values and choices of certain population groups.
The Environmental Effect on the Macro Environment
Gucci’s environmental footprint is known to be less damaging than Burberry’s one. The brand has been reported to initiate activities toward sustainability lately (Kim & Hall 2015). Thus, it may be considered a green brand due to its attempts to enhance the production process. Janssen, Vanhamme, and Leblanc (2017) also emphasise Gucci’s positive evolution toward environmental responsibility. Hence, it is viable to conclude that Gucci’s environmental impact on the macro environment is becoming more beneficial.
Conclusion
The solution to the problem is initiating more campaigns on raising fashion retailers’ awareness of their destructive environmental activity. The answer to the question of why the situation is unsatisfactory at present is that global fashion brands concentrate on their positive social impact while neglecting their negative ecological effect. The recommendation is to govern such companies’ activity by legal policies that would reduce the possibility of harming the environment by excessive waste amount, resource exploitation, and other processes.
The significance of the material is in the understanding of the PESTLE analysis’ basics and the possibility to apply it both when scrutinising the factors influencing companies and evaluating the impact of the latter on society and the environment. The path forward involves thorough consideration of the most destructive factors of fashion retailers that can be eliminated to improve the macro environment. It seems suitable to employ a positive social effect to implement changes in the ecological sector since the former is reported to have a beneficial character. The fashion industry is one of the most powerful, but at the same time, it poses many threats to society and the environment. Hence, it is the responsibility of brands’ owners to eliminate the harmful impact of their production and retail processes.
Reference List
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