PESTLE and SWOT Analysis of ASOS: Opportunities, Threats, Strengths, and Weaknesses

Context of Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PESTLE analysis of ASOS....................................................................................................1
SWOT analysis of ASOS.......................................................................................................3
In what ways PESTEL factors has made an influence on the Opportunities and threats of a
business. How company is using its strengths to negate their weakness and threats ............4
Leadership style that could help ASOS to meet their business objectives.............................7
Corporate Social Responsibilities of ASOS...........................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business environment refers to all the internal and external factors that could influence
functioning of companies. These factors includes customers, social, political, employees,
suppliers, economic changes, etc. which impacts strategies of organisations directly or indirectly.
Leaders also play very important role in company as they provide guidance to their employees to
overcome challenges and achieve goals (Shibia and Barako, 2017). The following report covers
internal and external environmental analysis of ASOS with the help PESTLE and SWOT
business tools. ASOS is a cosmetic and fashion company in UK which was founded in year 2000
in London. The company sells its own products of clothing and accessories in almost 196
countries. In this report the focus is paid on factors that could become threats or opportunities for
company and how its strengths are impacting risks and weaknesses are affecting opportunities in
market. Furthermore, it has also been discussed in this file that what leadership style should be
implemented by the company in order to complete their business objectives. The last section of
this report explains corporate social responsibilities of the company.
MAIN BODY
PESTLE analysis of ASOS
Political factors:
These elements plays important role in finding out political factors that could impact
ASOS profitability in long term. The company deals in various international market and is
bounded to follow rules and regulations implemented by government of those countries (Junior,
Oliveira and Yanaze, 2019). The political factors which could impact the company are political
instability, corruption, bureaucracy, trading regulations and many other factors. In UK the
market of the company was highly impacted by Brexit. The company has faced exceptional
growth as it has experienced Brexit tariff costs of about £15 million along with the trade
deal that was struck. The overall year profit that the organisation expected was almost
around £17 million, up from approximately £135 million that analyst have composed (Asos
faces £15m in Brexit tariff costs following booming sales in pandemic, 2021). The company
also have to make sure that it does follow all the rules of the nations in which it is operating
its business in.
Economic factors:
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These elements explains those factors which impact the financial status of the company.
In case of ASOS, the company face major challenges at times of COVID-19 as during lock-down
its sales increases but firm has to repay furlough cash to government. The online sales rose
almost by 10% to £1bn in year 2020 and due to this factor the firm took decision for returning
cash received by government under furlough scheme (Asos to repay furlough cash as lockdown
sales rise, 2020). The preferences of people has shifted from traditional shopping to online
purchasing during lock-down which pressurised organisation to keep updated its websites.
Social factors:
Social factors refers to cultural beliefs of people which plays important role in
understanding how the selected company should design its products or services. The social
factors that could impact company are demographic changes, power structure in society,
immigration policies and many more factors (Suseno and Pinnington, 2018). Education level in
society also impacts the company as people become aware about quality of jobs and level of
income. People are also becoming conscious about their health and safety as well as prefer
to buy those cosmetic products which are beneficial for their skin. The new trends in the
market also influence the preferences of people. People are becoming more concerned
about their health and skin care which increase a pressure on company to manufacture
those beauty products which could provide healthy skin. People are also getting attracted
towards organic beauty products which makes company to focus on meeting their
demands.
Technological factors:
These factors include utilization of advanced technologies in order to acquire more
customer base. The company should execute technological equipments to attract more buyers
such as it must keep updated its website. The company should post on social media websites in
order to attract young customer base. The company is required to use its social media channel
to promote its services and products so that people could become aware about the firm.
The implementation of digital technologies in the industry enhance the pressure on
company to use it for their marketing promotional activities. The new feature in
application of many cosmetic and fashion companies provide customers an opportunity to
view what cloth or beauty product will be suitable for them. The selected company should
also pay its focus on providing this technological feature to their potential customers.
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