SWOT and PESTLE Analysis of Armani Organization

This report provides a detailed analysis of the internal and external factors affecting the success of Armani organization. It includes a SWOT analysis and PESTLE analysis to identify the strengths, weaknesses, opportunities, and threats, as well as the political, economic, sociological, technological, legal, and environmental factors impacting the organization.

REPORT

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
SWOT Analysis...........................................................................................................................1
PESTLE Analysis........................................................................................................................2
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Internal environment is a part of business environment, which consists of internal factors,
that are climate, culture, members, etc. External environment is also a part of business
environment, which consists of external factors that are suppliers, customers, economic,
sociocultural, political, etc. The enterprise that has been selected for this project is Armani
organisation, it was introduced by Giorgio Armani in 1934. This project will determine the
elements that affects the success. These factors are further described on the basis of PESTLE
analysis and SWOT analysis.
MAIN BODY
SWOT Analysis
SWOT Analysis:- This analysis is enables companies to identify their internal strength
over weakness and external opportunities and threats. This is short form of Strength, Weakness,
Opportunities and Threats of an organisation (Dimitrakopoulou, 2015). The SWOT analysis is
implied by Armani enterprise to identify its positive and negative elements that affect the
business stability either from inside or outside.
Strength (S) Weaknesses (W)
 It consists of good globalised marketing
with brand visibility which creates
expansion of industry to meet its large
number of customers.
 The product brand is diversified in
another field of fashion which focus on
diversification and cost focus.
 Brand meets the consumer satisfaction
with Armani merchandising.
 It leads in source of information for
strategic planning which helps to
identify competitive advantage of the
firm.
 High level of branding creates negative
impact of fake imitation on target
market which reduce its sale.
 Long-term branding in diversification
affects the brand in long run to compete
with rivalries.
 Its products are highly priced which
reduces its number of customers and
result in minimisation of profits.
 Establishing of new products, not
promoted to consumers, create negative
impact on sales promotion and
minimisation of wealth with delay in
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 It leads to achieve organisational goal
with effectiveness and efficiency with
proper direction and control of Armani
managers.
goal achievement.
 It identifies the defects in performance
and needs to evaluate that where is it
lacking to achieve goal.
Opportunities (O) Threats (T)
 Brand may be expanded in new eco-
friendly product lines which facilitates
in more consumption of products with
no side effects of consumers.
 More innovative products should be
produced with new design, package,
etc., to promote digital media to
increase globalised market.
 Foray in emerging market trends with
Foreign Direct Investment for retail
sectors.
 Armani enterprise should maintain its
least cost on product with proper
quality management that increases
consumers loyalty of products.
 It creates opportunity for Armani to
identify competitors strategy which can
be utilised by the firm in opposition of
rivalries.
 Competitive firms such as Peta, use
diversified branding which creates high
competition to Armani enterprise to
compete.
 Reduce dealing with many organisation
which eliminates specialisation and
differentiation as they are well known
about your production concepts.
 Low customer base may affects change
in target market which affects
profitability.
 Consumers who are not loyal to product
and keep on changing create threats for
organisation which results in least sale.
 It lacks in firms to reduce its external
weakness which are highly
uncontrollable by Armani managers.
PESTLE Analysis
PESTLE Analysis:- It is a framework that analyse key elements which affects business
from outside. It is an acronym of political, economic, sociological, technological, legal and
environmental factors. It is most useful for new entrance of firm in foreign market. The PESTLE
analysis is very essential for cost effectiveness, understanding the changes taking place. It also
helps to develop these factors in alert development, exploit opportunities. These factors are
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implemented by managers of Armani organisation for the strategic decision making process in
order to create core competence with their rivalries. These factors are further explained below
which are as follows:-
Political factors:- This factor determines about the dynamic and uncontrollable changes
of government. These elements are as tax policies, tariff, fiscal policy, monetary policy, foreign
trade policy, etc., which affects business stability (Hauge, 2016). Managers of Armani
organisation have a great impact with these political factors as it increase risk factors which may
further leads in loss. Managers are very adversely affected by the foreign trade restrictions as
they can't import products of good quality at least cost for customer satisfaction with
maximisation of profits.
Economic factors:- These factors are component of economy performance. It consists of
factors which are related with economy such as foreign exchange rates, interest rates, economic
growth patterns, disposable income of consumers, unemployment factors, etc. It have direct or
indirect effect on business entity by impacting the purchasing power of consumers which results
in fluctuation of demand and supply. Managers of Armani enterprise are affected by the
economic factors by consumers as they are king create great impact through their purchasing
power. Consumer prefer to save income by postponing their purchase in future for cheap price
creates negative impact on firm's sale with maximisation of profits.
Sociological factors:- The determinants of these factors are demographic conditions,
population growth rate, age and income distribution, emphasis on health and safety, individual
lifestyles, cultural implications, etc. These factors create both positive and negative impact on
business organisation. Managers of Armani enterprise are highly affirmative with increase in
population growth as it increase more customers for firm's high demand. It leads in diversify
behaviour of suppliers and customers which helps to understand needs and desire of target
market.
Technological factors:- These are the factors which are highly developing in this
modernisation of world. The elements of this factors are new innovation, research and
development, automation, etc., which are both favourable and unfavourable for an industry.
These factors mainly focus on entrance of firm with new innovative products to compete with
their rivalries. Managers of Armani enterprise are affected by this factors as lots of money is
being spent on developing new innovated technology to compete which will also be obsolete in
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future. New innovation of products with diversified techniques may create positive impact for
firm with its specialisation as competitive advantage.
Legal factors:- It is the factors which is overlapped by political factors with more of
lawful and legal obligation to be followed by the organisation. These factors include elements
such as employment law, consumer protection rights, copyright and patent laws, etc. Managers
of Armani enterprise are adversely affected by these legal factors as they have to follow the legal
ethos, norms and code of conduct while running the business. This leads to have negative impact
by reduction in maximisation of profits and to focus on consumer protection rights which does
not create instability of firm and bad view on consumers (Leite, 2019).
Environmental factors:- It is the most important factor of an organisation to utilise the
scarce resources in an effective and efficient manner to achieve organisational goal. These
environmental elements are further described as increasing scarcity of manufacturing products,
pollution targets, weather, climate, etc., which adversely affects the industry agriculture and
insurance. Managers of Armani are very negatively affected by these environmental factors
through ecological and surroundings standpoint concerning with forecasting the changes in
weather and climate. Managers have to be aware of waste management with Corporate Social
Responsibility (CSR) by reducing pollution which may affect the society health.
CONCLUSION
From the above discussion it has been concluded that business environment consisting of
internal and external surroundings affects the organisational stability favourably or unfavourably.
This is further described on Armani enterprise with the implication of SWOT analysis and
PESTLE analysis which identifies the positive and negative impact of external elements on
achievement of its success.
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REFERENCES
Books and journal
Dimitrakopoulou, P., 2015. The Development Of A Bussiness Strategy Model For A Luxury
Brand.
Hauge, C., 2016. Are Plus Houses the Future? A Model for Guiding Decision Makers based on
Current Standards for Sustainable Buildings and Plus House Projects. (Master's thesis,
NTNU).
Leite, B. R. B. F., 2019. Beatriz Bettencourt Womenswear marketing plan: a fashion brand case
study. (Doctoral dissertation).
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