PESTEL Analysis Of Penneys

A PESTEL analysis is a tool used by companies to track the external environment they’re operating in or are planning to expand into and it allows them to identify the various factors that shape this environment. It is a mnemonic that highlights six crucial factors, for any industry, which play an integral role in describing the environment in question and the ways in which these factors will influence the organisation’s future decisions and operations; the political, economic, sociological, technological, environmental and legal factors, however for the purpose of this essay I am going to discuss the political and legal aspects together and the sociological and environmental aspects together. A PESTEL analysis is very important in order for

In addition, it is also very useful when developing a SWOT analysis as it leads to a far more comprehensive analysis of the firm’s strengths, weakness, opportunities and threats (PESTLE Analysis, 2015) (Idealessaywriters.com, 2015). In this essay I’m going to present a PESTEL analysis on Penneys. Penneys is an Irish clothing store which specialises in cheap yet fashionable clothing. It is so beloved in Ireland that the phrase, “Penneys finest”, is heard on a regular basis after someone receives a complement about their outfit. It also has had a great deal of success across Europe in countries such as the UK, Germany, Italy and France and has recently begun an expansion project into the difficult to crack US market. In the following PESTEL analysis, I will assess the attractiveness of the US market for

It is necessary to look at this aspect carefully as the US market is one of the most difficult to enter with less than half of UK retailers believing that they can achieve commerciality. However, they feel that they’re up to the challenge and that they have an advantage over their US competitors because their stock turns 6 times as opposed to the US average of 2 times. Therefore, their high level of efficiency at every level should result in the best price in the market providing them with a unique selling point which differentiates them from other brands targeting young fashion lovers. As well as this, they are aware that price is one of the most important factors to American buyers, so they expect there to be a large market for their cheap fashionable clothes. They achieve these low prices through the use of a low cost model which means that they don’t spend much on advertising, celebrity endorsements, an online sales platform or on music in stores. They also have a, “value retailing”, model consisting of low gross margins and high volumes. As well as this, they bulk buy from low cost economies to further reduce costs e.g. from Bangladesh in Asia and in this way they ensure that they get full benefit from their effective supply chain. However, much of their success in the European market has hinged on their supply