Impact of COVID-19 on Fashion Co.: Key Developments and PESTLE Analysis

This report analyzes the impact of COVID-19 on Fashion Co. and provides a PESTLE analysis of the fashion industry. It also discusses the importance of structure, culture, leadership style, and psychological contract in boosting efficiency of the business firm.

Individual report

Table of Contents
Question 1........................................................................................................................................3
Key development....................................................................................................................3
PESTLE analysis....................................................................................................................4
Question 2........................................................................................................................................6
Structure and culture...............................................................................................................6
Leadership style......................................................................................................................7
Question 3........................................................................................................................................8
Psychological contract............................................................................................................8
References .....................................................................................................................................10

Question 1
Key development
With upcoming of pandemic of COVID-19 it has shook operational working of retail
industry. Over the past few years businesses working under fashion retail have to go through
several difficulties in respect of their operational working. With upcoming of coronavirus, it had
lead to causing impacts on mental as well as physical health to various individual residing in
impacted regions. In context of chosen firm i.e. Fashion Co., said company have across 30 retail
outlets being distributed in UK region. The given company has its existence since 2015 and have
traded as the sole in their retail stores. However, through upcoming of COVID-19 pandemic it
have resulted in causing serious impact on working of the retail firm in its respective operational
markets. The said development of retail firm have caused significant impacts to the given retail
company these are as follows (Crossick and Jaumain, 2019); Temporary closure: With upcoming of highlighted development it resulted in temporary
closure of various retail outlets of the company. This was in accordance to
implementation of lock-down situations as proposed by government of the respective
region. Dropping sales: Under this element dropping sales of respective company was being
reported for fashion firm. This could be the impact of lock-down situation and significant
changes in behaviour of individual customers during COVID times (Ferreira, Sousa and
Gonçalves, 2018). More emphasis on consumer relations: In this element operational working of
operational firm was being moulded to focusing on better consumer relations. Under the
technique effective standards were being set in organisational firm and several strategies
were being proposed to define effective working of the firm considering aspects of
consumer behaviour in its operational marketplace.
 Stakeholder management: Another impact on operational working of the business firm
related to productive technique to manage stakeholders of the corporate. Furthermore,
proper initiatives were being taken to develop better understanding of changed company
working guidelines which enables organisation towards sustainable approach working
(Gereffi, 2019).

PESTLE analysis
PESTLE analysis is a concept of marketing principles that gives the clear view of the
external factors affecting a business organisation. PESTLE is a mnemonic word that combines
all the macro factors of a business which are Political, Economic, Social, Technology, Legal and
Economic factors. It is a model that helps the management of a business to accomplish its future
opportunities,growth, expansion, introducing new product in the market, controlling resources
etc. This analysis is used by the new comers who wants to are ready to enter the market to
analyse the place, product, man power, techniques that are available, trade tariff etc. PESTLE
analysis of Fashion Co. are been explained by having the light in all of the macro factors as
below (Griffin‐EL and Olabisi, 2018);
Political: Tax Rates: Tax rates of fashion services are stable as compared to the tax rates of other
nations. This makes the manager happy to work at its fullest and gaining high profits
without the fear of paying high taxes on it.
 Political power: Political power plays a major role in the proper functioning of fashion
industry. Unfortunately if the party who is in power bans tourism over a place for a time,
it will results as a major loss for the business of fashion firms.
Economic: Currency Stability: Currency stability is one of the major factor affecting the business of
fashion industry. For example, if currencies of other foreign countries is higher than UK,
people living outside UK will like to visit the country.
 Investment cost: A fashion industry needs a high amount of investment to get it started.
This high investment comes with the high risk, that to in the competitive market of the
UK (Latukha, 2018).
Social: Consumer buying patterns : At times most of the tourists use to prefer affordable
fashions for there stay. Dorchester serves the customers at a high rate charge for a single
day which in times are non affordable by many of the tourist visiting London. This high
rates sometimes makes the fashion being vacant at peak times.
 Socio cultural: As per the studies it is stated that population shares the combination of all
age groups, that includes children, adult and old age peoples. Nowadays, adults are much

fond of travelling, exploring new places. There stay can be for a day or can extend for
more few days which makes them search for a well furnished, home like stay. Most of the
tourist end ups their search by having a comfortable stay at the Fashion Co. (Liang and
Chan, 2018).
Technology: Social media: With the increase in the use of the social media, comes with the
opportunity of developing and the risk of ruining the image of the fashion reputations.
People nowadays are more into blogging and v logging. They like to share their
experience they had in the particular fashion. Having a bad experience results in the form
of bursting out with the medium of social media.
 New technologies: At ancient times, fashions were having the sourse of media in the
form of radio, fax and telephones. But fortunately with the innovation of technology in
the past few years helped them in promoting there fashions by publishing advertisements
in tv, social media ads, fashions android and apple applications etc. (Loosemore and
Lim, 2018).
Legal: Crime rates: If a fashion is located in a area with high crime rates, it will effect the
reputation of the fashion as everyone wants to stay at a place having no crime rates or
less crime rates. High crimes rates area may affect the safety of the tourists visiting the
town.
 Consumer protection: Protection does not comes with just by saying. Having a proper
CCTV surveillance in fashion areas, security guards, etc. assures the customers that they
are at a safe place.
Environment: Climate: Climate is one of major factor that affects the business of fashion firm. People
visits a place for a variety of reasons, some visits to meet there friends and relatives,
some for business purposes and some for vacations. This purpose of reasons can be
affected with the abnormal weather conditions. That is the reason people suggest to visit
a place in a particular period of time.
 Geographical: If a person is out for a vacation to London will definitely be looking for a
fashion in London itself rather than looking for a fashion to stay that is far away from

London. So deciding the perfect location before establishing a fashion is also a major
point to keep in mind.
From the above studies, it is been cleared that fashion industries suffers from a major
external factors to run its business. All the factors mentioned above are equally important for the
proper flow of the fashion industry. This kind of industries can gain reputation and profits with
proper analysis. There is no doubt that Fashion Co. is facing competition from its competitors as
well. This makes the manager to analyse every single factor individually in brief for leading with
the obstacles ahead. If the manager does not do so, the fashion is going to face more hurdles in
nearby future (Manlow, 2018).
Question 2
Structure and culture
The structure and culture of an organisational firm plays a vital role in developing better
standards of working. In its inclusion various market changes and related issues faced by an
organisational structure can be tackled by the operational firm. This is the theory which shows
effectiveness of an organisational firm when working in a team. It shows the necessity as well as
the desire of a individuals and their team working to overcome operational issues and producing
task given in an appropriate manner with optimum utilisation of resources of the business firm.
In context of chosen company i.e. Fashion Co., provided theory will enable development of
effective structural operations and will provide effective learnings by seeking to overall
behaviour in every aspects of workplace (Sobol, Cleveland and Laroche, 2018).
Tuckman's team management model plays a vital role in enhancing collaborative
approaches towards performing tasks to attain desired goals and objectives of corporate firm.
The said model was introduced by Bruce Tuckman in 1965. The given model comprises of
following stages under which collaborative efforts can be ensured while approaching to a give
business goal or objective; Forming: The respective stage is an inclusion of forming up of a team in an
organisational firm and agreeing on derived goals and objectives of the business firm. In
relation to given context, this stage will discuss about changed policy of working in
Fashion Co. in respect to pandemic situation.

 Storming: The next stage is an inclusion of building trust between members of the team.
For the given stage members of team begins to start understanding themselves and get
familiar to working style of each individual in team. Norming: The said stage includes realisation of importance for working in a team. As
various collaborative efforts produced may result in productive working which will
enable motivation towards approaching towards business aims. Performing: For the given stage actual activities takes place towards attainment of
desired goals and objectives of the business firm.
 Adjourning: In this stage team work is completed reflecting to attained team goals. For
given stage derivates are being observed and necessary changes are made for future
projects (Vaishnavi, Suresh and Dutta, 2019).
Leadership style
Behind every successful team there is a a dedicated team leader. Leadership is a quality
which cannot learn on paper, individual have to develop it in its personality. This work field is
very diverse as well as uncertain challenges come at every aspect. A good leader is always stood
up with team to solve their problems. it should be solution oriented. Great man theory states that
a leader is born to be a leader it cannot be made. The quality are inherited it cant be develop.
These type of leader have unique identity in the society they possesses others by their
intelligence. Under the theory, team leaders motivate the employee to make them more
progressive. There are so many research which shows that motivated employee are more
productive rather then normal employee.
To motivate a person the best way is to fulfil their needs. There are different ways to
motivate the employee. There can't be a same way to motivate all. It is not necessary that a same
thing can motivate every person. Under the theory there are various importance that could be
derived and would suit the structure or culture being followed in Fashion Co. (Bhatia and Priya,
2018);
Trust- Trust build between the employee and employer is must .the employer should
known the employee want vice versa. The trust bond play a vital role. Through adopting
principles of provided theory i.e. trait theory of leadership, leaders in the business firm can
enable effective trust while regulating operational working.

Acknowledge the employee- The employer should be appraise the hard work done by
the employee some applause for its work. For given leadership style proper acknowledgement to
respective employees working in corporate firm can be ensured. Furthermore, said approach will
develop better standards through defining clear vision of corporate firm also by avoiding
wastages of resources of the firm.
Reward– The employer has to reward for the hard work done by the employee. Such as-
incentive, appraisal, promotion etc. In relation to the given firm as changes proposed in the
operational firm due to impact of development. Rewarding an employee under one of the
principle of theory will engage operational working of the corporate to deliver productive efforts
while approaching to the said business goals and objectives (Arminen and et. al., 2018).
Question 3
Psychological contract
Importance of psychological contract in regards to boosting efficiency of business firm
have risen over period of time. According to Mason Steveson, (2018), HR professionals very
often uses concept of psychological contract. The concept of the psychological contract was
originally developed by Denise Rousseau. Rousseau is a H. J. Heinz II University Professor of
Organizational Behaviour and Public Policy at Carnegie Mellon University. The said technique
enables with business organisation to develop better understandings over business goals and
objectives (The Importance of the Psychological Contract, 2018).
In relation to the given approach retail industry can facilitate better motivational
techniques being pursued in the operational firm. In context of fashion retail, managers of the
firm takes considerations of respective approach that delivers appropriate techniques for
employee retention and providing satisfaction to customers of the operational firm. In the given
approach of psychological contract managers of respective firm can focus effectively in terms of
developing better standards of working. In evaluation following are the key considerations of
approach; Suitability: Psychological contract provides with suitable approach for respective
organization to adopt because this will increase the overall cost of respective organisation
as Fashion Co. have to spend lot of amount on infrastructure development like getting a

premises, employee training and many more, this will increase the overall cost of retail
much more than profitability of retail. Feasibility: This psychological contract is feasible for respective organisation because
there are lot of old age employees working in retail who are not aware about strategies
application and advancement, as they are still using old techniques to do retail work.
Establishment of given service for those employees acts as they use collaborative
approach whenever they are in problem approaching to business goal.
 Accessibility: This psychological contract provides accessible for respective organisation
because this will reduce the overall profitability of retail firm. As there are various
employees working in retail that uses appropriate techniques. providing with technique of
psychological contract enables managers of the corporate firm to develop better standards
of working in the operational firm.

References
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Online
The Importance of the Psychological Contract, 2018. [Online]. Available at:
<https://www.hrexchangenetwork.com/employee-engagement/articles/the-importance-
of-the-psychological-contract>