The footwear industry

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

P.E.S.T.L.E. analysis
Opportunities facing the industry
Threats of the industry
Conclusion
References

Globalization, international trade and good international relations have enabled companies to target international markets. International trade has greatly favored the world footwear industry; players can enlarge their market base to countries other than their country of incorporation.

The industry is composed of both new and second-hand footwear. The industry can further be divided into women footwear, men footwear and children footwear. This report takes an external environment analysis of the footwear industry; it will use P.E.S.T.L.E. analysis as the tool of analysis.

P.E.S.T.L.E. analysis

P.E.S.T.L.E. analyzes the external environment that an industry faces; it interpolated those factors that are beyond the control of an industry.

It analyses some factors that a company has no control with but they affect the business. P.E.S.T.L.E. analysis is a management tool that assists in making informed decision about the influence that the company is going to get from the outside environments as the technology and other variables change

Political

The world political environment is changing to the benefit of the industry however; the stability of the industry is adversely affecting the industry. There is an increased growth in international trade and international cooperation making the industry be able to fetch markets from the international arenas.

Footwear industry can takes advantage of the political situation in the world; the world is in the process of employing a free trade policy whereby the market is the one that determines the price in the market as well the products to be supplied. The global financial crisis has a negative impact on economies of the world however; it has compelled countries of the world to relax their trade barriers.

The relaxed trade barriers is to the good of companies in the industry since they can expand to other many countries. This will increase the market base. Access to market has been increased and thus the products can be sold in different countries.

Political globalization has numerous advantages to the industry and at the same time can pose some threats, it leads to an increased market and consumer choices are enhanced. When dealing with international communities, a company is able to think outside the box in the efforts of effectively competing in the global arena, this lead to the growth of the industry.

Economical

The world is undergoing economic globalization supported by globalization, international trade and removal of trade barriers; on the other hand, it is only recovering from financial crisis of 2007.

The globalization efforts by the world has lead to an increased market for the industry; however the reduced disposable income from different people has made them to opt for second hand shoes. generally designer apparels are relatively expensive than other products; this segment of the footwear industry is threatened by the reduced disposable income resulting from the global crisis.

Whether they will be bought, depend with the economic strength of a person buying them and that of the country. In the past decade, the economy of the world has been on the low pace with other countries recording a negative rate. Even if the rate today is not so good, there is hope and thus a risk taker can as well diversify his business.

Social

Enlighten of consumers on the need to have footwear in their list of basic needs have lead to a ready market for the industry; people are willing to live high standard lives thus they offer the industry market.

The level of income has influenced consumer’s choice of fashion and products they buy; it is also influenced by the society that they are living in. the industry is called upon to be constantly be developing products that consumers find fashionable; this will determine the success of an individual company in the industry.

What the society perceives as fashionable influences the decision for example adolescences are willing to wear something that boosts their esteem. If the society believes that a certain outfit is fashionable, the youth consumers are more likely to put on the outfit.

Change in tastes and consumer preferences that seems to be ever changing offers the industry a good opportunity to remain in business all through; what is much needed is for the industry to keep innovating and coming up with new designs to fit the changed market needs.

Technological

Technology can be used to design, and market the product; scientific advancement has benefited the industry reduce production and selling costs. If the right technology is used, the industry benefits from a reduced cost of production and is able to design and come up with computer-generated designs. Currently, there are a number of social networks, which the brand can be used as advertising tools.

Such networks include Face-book, yahoo, google and twitter; the industry is better placed to use these sites to advertise their products, they also help in targeting the international market. The use of search engines has also increased. This is created from the angle of thinking that the customer knows what he want.

In this marketing strategy, the user looks at what he thinks fits him. The work of the marketer or the advertisers is to ensure that when the customer is searching, he will see the products that he is selling. Some of these software are Google and Yahoo search.

Technology has also reduced the traditional reliance on leather as the main raw material in the industry; there are other forms of materials that have been developed by use of technology that can be used to replace leather products. This has assisted the industry continue in business amidst reduced leather supply.

Legal

There are numerous laws that have been enacted in different contrives to regulate the industry; what players in the industry can do is to comply with the needs of the legal legislations.

Ecological

The world values its environment; however, human exploitation has reduced the sanity of the environment. The changed environment has lead to an effect on many industries. When the environments are polluted, then the rate of leather production is reduced because animals reared for the production of leather cannot survive the changing weather patterns.

This lead to low supply of raw materials necessary for the success of the industry; other than the reduced supply of raw materials, the industry is forced to look into its production method , they should be made environmentally friendly.

On the positive note, since the world realize that no production can be made without emission of waste, it has embarked on waste recycling technologies as well as adopting environmental friendly technologies.

The industry will not be let down by the regulation but will adopt the available remedies; it can also consider environmental conservation as its social corporate responsibility; using a green supply chain management will also assist the industry contribute to environmental conservation, protection and restoration.

Opportunities facing the industry

The industry faces an advantage in the growth of global trade and strengthening of globalization; the industry can have an increased market for its commodities since the target market is the global environment not limited to single country.

Growth in technology offers the industry an increased cost cutting, production efficiencies and marketing advantages; when using technology, the company can produce at relatively cheap cost thus increases its profit margin; it is also able to make numerous designs that are responsive to consumer needs.

The improved living standard of people have made footwear a human need; his means that as long as people are born, the industry will have something to sell.

Threats of the industry

The major threat likely to affect the industry is deterioration of economic situation in the world; when people have less disposable income, then they are more likely to stick to their old shoes thus sales of the industry does not grow.

On the other hand, if the rate of environmental damage is not checked, the industry is likely to suffer from lack of raw materials; leather. This is likely to make them switch to other raw materials use, which may be costly in the end( Footwear Industry Profile: Global, 2010).

Conclusion

The world footwear industry has been favored by growth in international trade and improved living standards across the world; it is expected to growth further; however, it faces challenges from environmental damage and world economic crisis. When the environment is damaged, rearing of leather producing animals becomes a challenge; leather is the main raw materials in the industry.

References

Footwear Industry Profile: Global. (2010). Footwear Industry Profile: Global, 1(1), 1-34.

Click Here To Order Now!