PESTLE Analysis of UK Fashion and Clothing Industry and T.K.Maxx

This report provides a PESTLE analysis of the UK fashion and clothing industry, focusing on T.K.Maxx. It examines the political, economic, social, technological, legal, and environmental factors affecting the industry and the company.

Pestle Analysis

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PESTLE Analysis........................................................................................................................3
PORTER'S five forces.................................................................................................................5
REFERENCES................................................................................................................................7

INTRODUCTION
Fashion and clothing industry is a multi billion dollars global industry deals in making
and selling of clothes. As, human need clothes for different purpose and occasions. There are
several factors which affect the clothing and fashion industry. In this report, PESTLE and
PORTER'S five forces analysis is performed on UK fashion and clothing industry and on
T.K.Maxx company to analyse the effect of several factors.
MAIN BODY
PESTLE Analysis
POLITICAL
Political factors is a biggest factor that create uncertainty in the clothing and fashion industry.
Political stability, geopolitical events and instability due to Brexit, terrorism activities in and
outside the country is giving the sense of uncertainty in this industry in UK. Government can
encourage the companies of UK apparel industry to buy fabrics from the local market of UK if
the taxes and imports from other countries becomes costly. Political persons also influences the
fashion trends in UK (Gander, J., 2017). People expect fashions and trends from actors-
actresses, celebrities and the persons who work for the country.
Political factors affecting T.K.Maxx
T.K.Maxx was established in 1994 & its headquarters is in Framingham, Massachusetts U.S.A. It
is now expanded its business in UK and open so many store. Oil prices, elections, Brexit issue,
terrorism and political shifts is a threat to the business of fashion and clothing industry.
ECONOMICAL
Economical factors like GDP, inflation rate, bank rate affect significantly the growth of fashion
and clothing industry. Volatility and slow down in Chinese market, demonetization in India,
decrease in US and UK economy growth rate decreases the purchasing power of the customers in
UK. Fashion and clothing industry adds to the economy of the country since it is a industry
which gives highest employment.
Economic factors affecting T.K.Maxx
T.K.Maxx shows the ways on its website by which it helps to save the environment through its
business. Company recycle 94% of their store waste and currently working on 6%. So, the
factors like inflation rate, growth has comparatively low effect over company net profit margin.
SOCIAL

Social factors also have an important role in the growth of fashion and clothing industry. Social
changes in UK and other giant cloth manufacturing countries may affect the demand for fashion
products (Ferreira, A. I. C. G., 2016). The generation goes on changing so the preferences
changes with the generations. Musicians, political persons, social sites, groups and organisations
affect the trends in this market. People are choosing the stylish and great design clothes even If
the fabric is not great like luxury brands so the companies are offering the new design and trends
of good quality using technologies at affordable prices. Now, customers are more concerning
about their clothing and select the outfit base on need whether interview, job or office hours and
special occasions after getting information about the brand from many resources and reviews.
Thus, fashion and clothing industry has become challenging.
Social factors affecting T.K.Maxx
As social media like Twitter, Facebook, Instagram, Google plus and you tube posts, comments,
shares and videos affect the people's thought in latest fashion trend and clothing industry so the
company uses these social media as an advertising tool to increase the company sale and thereby
increases the overall income. Company also performs the charity work and advertises it on social
sites by “Give up clothes for good” tag line.
TECHNOLOGICAL
technological factors and its effect over UK clothing industry and T.K.Maxx
As the technology and trends are improving, it becomes very important for the company to make
its site up to date, introduce phone app and adopt the new innovation and technology due to
globalization, information technology and internet use. So it has become challenging for UK
fashion and clothing industry and T.K Maxx to adapt the changes because the technology
revolving around the company is very poor because company do not have phone app yet.
LEGAL
Legal factors and its impact over UK fashion and clothing industry and on T.K.Maxx
Both the fashion and clothing industry in UK and T.K.Maxx have to follows the local and
country rules & regulations and policies. There are employment and labour rules, environment
rules which have grown tough and required to be complied (Bessière and et.al., 2019). But the
legal factors and the ethical image benefits the fashion brands.
Environment

Fashion industry has a strong impact on the environment and this impact is not good for
the environment as many clothes are made from cotton and other fabric material which consists
of various types of chemicals which are hazardous for the environment. Fashion industry has
become one of the contributory factor for polluting environment so, it has become really
important for T.K.Maxx to be careful about their carbon footprint and market their brand as more
environmental friendly and has get involved in the sustainable practices.
PORTER'S five forces
Porter's five forces analyses the forces which affect the business and determines how competitive
the company is? The forces are-
Bargaining power of buyers or customers: It is the ability of the buyers to decrease the prices
of clothes they pay. In clothing and fashion industry in UK, the buyer power is relatively large
force because there are so many retail industries are there to buy the clothes. So the buyers power
is high force in UK clothing and fashion industry.
Bargaining Power of suppliers: it is the ability of suppliers to increase the cost of their product
or service that can be raw material in the clothing industry. Supplier power in this industry is
relatively low and insignificant (Abalkhail, T. S., 2019). Because, there are so many
manufacturers which are providing the material of good quality at reasonable cost so very small
chances of increasing the cost of the product and service by the suppliers. Hence, this force in the
the UK fashion and clothing industry is low.
Threats of new entrants:The threats posed by new entrants for the UK fashion and clothing
industry is small because there is little uniqueness in the trends right now however new entrants
try to introduce their products and service in a unique way (Mokhethi, M. C., 2019). The
clothing industry in UK is at high risk for new entrants so the force of threats of new entrants in
UK fashion and clothing industry is low.
Threats of Substitutes:
Fortunately, there is negligible to substitute clothes and all substitute is just competition. Thus,
the force of threats of substitutes is low for UK clothing and fashion industry.
Competitive rivalry: The fashion and clothing industry has large number of retailers and brands
in the UK. As there is little innovation in this field exists and market is full of similar products
and becomes saturated. So, the force of competitive rivalry is medium.

CONCLUSION
It can be concluded from the PESTLE analysis over UK fashion and clothing industry
and T.K.Maxx that political and economical factors significantly affect the clothing and fashion
industry (Shuai and Shu-li, 2018). Social and technological factors also have influence over the
company business while legal factors have little. It can be concluded from PORTER'S five force
analysis that threats of substitute are negligible, threats of new entrants and bargaining power of
suppliers are low, force of competitive rivalry is medium while force of bargaining power of
customers or buyers is high.

REFERENCES
Books and Journals
Abalkhail, T. S., 2019. Entry and Expansion Strategies for Burberry in Oman by Applying
Porter's Five Forces Model. Indian Journal of Marketing. 49(1). pp.25-35.
Bessière and et.al., 2019. A vision of re-distributed manufacturing for the UK’s consumer goods
industry. Production Planning & Control. 30(7). pp.555-567.
Ferreira, A. I. C. G., 2016. The factory events: business plan for the creation of a company in the
United Kingdom (Doctoral dissertation).
Gander, J., 2017. Strategic analysis: a creative and cultural industries perspective. Routledge.
Mokhethi, M. C., 2019. The Perceived Export Barriers of Micro, Small, and Medium
Enterprises: An Analysis from Lesotho-Based Manufacturing Enterprises. Manag Econ
Res J. 5(2019). p.7683.
Shuai, L. and Shu-li, H., 2018, December. Analysis of Export Competitiveness of Chinese
Children's Clothing. In 1st International Conference on Contemporary Education and
Economic Development (CEED 2018). Atlantis Press.