MACRO ENVIRONMENT FACTORS

Macro Environment Factors

Macro Environment Factors

PESTEL Analysis

A PESTEL analysis allows a business to identify the major political, economic, social, technological, environmental, and, legal concerns that may have an impact on its performance. As far as the fashion industry is concerned, the macro environmental factors affecting businesses are those which lie outside small businesses and their competitors. The owners of businesses in the fashion industry have a lesser degree of control over external factors such as consumer characteristics, government influence, technology, and economy (Bohdanowicz & Clamp, 1994).

Gap Inc has been augmented by a numerous of external factors that are very essential and are also incorporated in further maximizing the company's potential. These external factors are beyond the jurisdiction of Gap Inc but still they help in shaping of the company for coping with future external factors. Experiencing these external factors not only identifies the small lope holes that gets highlighted but also helps the management of the company in making respective managerial decisions for present and future issues that might occur again as a result of some external factors.

The manner in which small companies become adapted to macro environmental factors decides how they will perform differently from their major competitors in the industry. In the case of Levi Strauss and Gap Inc., the following are the major external environmental factors affecting the business:

Political Factors

Political factors of any country can affect greatly on the economic and industrial sector of that country. Political factors are as important as they have the direct impact on the methods that different businesses follow for running their respective operations. Paying of large taxes is considered to be one of those controls that a government usually read carefully. Through this act of government, most of the companies are damaged financially and usually are unable to operate successfully in that country.

It has a negative impact in the retail industry as it could be easily changed beyond the limits that were established and will also have an adverse affect on the business. Beside this, those companies that are target oriented will have to obtain a much higher cost in terms of expenses due to these changes. This will have a great affect on the operations of their retail business will affect these political decisions negatively. Gap and Levi Strauss will have to bear a set of legal and political forces in order to manufacture and products within the industry to meet their demands. Gap Inc. and Levi Strauss must be obey the laws such as health and safety laws, labor laws, and laws related to other manufacturing and working conditions.

Political factors which affect Levi Strauss and Gap Inc and other businesses within the clothing industry include the implementation of the Multi-Fibre Agreement (MFA) by the WTO. This created a closed market with respect to the importation of textiles and clothing from the developing countries to the developed ones and this in turn created new and numerous markets which were not effective and efficient in delivering products at low ...