The retailing industry is an area that has grown worldwide owing to the increased consumer interaction that is involved in the retail business. Most importantly, the retail industry has grown internationally because of factors such as brand management and advertising based on lifestyle trends of consumers (Fernie, Fernie and Moore 1).
PESTLE Analysis
Political Factors
Political factors influence the performance of a company such as Target. Different countries have differences in terms of tax regulation and tax rates based on the various acts of legislation in the respective countries. Additionally, a retailing business may not be viable in countries with unstable political climate.
Economic Factors
Economic policies that affect demand and supply include changes in taxes that affect ease of access to finances. Recent increases in world fuel prices have had a negative influence on the performance of retailing organizations. The increase in fuel prices tends to affect the distribution of products to various retailing stores. Additionally, in the case of recession, the consumers spending habits may be influenced negatively. Consumers tend to have less disposable income. Hence, consumers may not spend as much money as they would in the case of the absence of a recession.
Social Factors
Retailing organizations can be able to improve their performance by improving their brand management and advertising through corporate social responsibility activities such as community involvement. Further, in order to suit the different markets and cultures, products offered in the various retails stores are diversified and suited based on the preferences of the consumers in the different locations.
Technological Factors
Use of technology to improve customer experience may involve the use of gift cards. Additionally, companies can set up websites where they provide consumers with access to check availability of the different products different stores offer.
Environmental Factors
Adherence to environmental regulations and good business practices are essential for the retailing stores to address environmental challenges.
Legal Factors
Lawsuits against retailing organizations may negatively affect the company’s image and also lead to the company losing millions of dollars in paying for fines and legal expenses.
Profit Potential
The retailing industry profit potential is high based on the ability of the retailing store to internationalize and have different stores in different countries that are oriented to the culture of the respective countries.
Work Cited
Fernie, John, Suzanne Fernie, and Christopher Moore. Principles of Retailing. 2nd ed. New York: Routledge, 2015. Print.
