Report: Analysis of the Footwear Industry Challenges and Impacts

This report analyzes the footwear industry, focusing on key issues such as increasing costs and technical problems. It categorizes these issues using the PESTEL framework, specifically highlighting economic and technological factors. The report examines the positive and negative impacts of these issues on businesses like Nike and Adidas, considering factors like customer demand and online presence. It also reflects on the lessons learned, including the importance of research skills and understanding industry-specific terminology. The report concludes by summarizing the industry's contribution to the economy and emphasizing the relevance of external factors in shaping the sector's performance. The report also includes personal reflections on the learning process, highlighting challenges faced and skills developed during the project.

Report

Table of Contents
INTRODUCTION...........................................................................................................................1
Describing two issue that affect sub sector..................................................................................1
Using PESTEL, categorize two issue and explaining the reasons...............................................2
Describing the issues had a positive impact on business.............................................................3
Describing the issues had a negative impact on business............................................................3
Summary of the lesson learnt from this.......................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
The selected sub sector for this report is Footwear which includes all kind of footwear
such that sandals, manufacturers and distributors of shoes, boots, sneakers and different types of
footwear as well. Data shows that, revenue of footwear market also contribute high part for the
growth of economy and the market also expected to grow annually around 1.1% as well
(Footwear UK, 2018). The current report describe two main key issues that affect the overall
footwear sector and further, by using PESTLE analysis as a strategic management tool,
categorize two issue and provide justification as well. Further, report describe positive as well as
negative impact upon business and then provide a summary of lesson learnt from the entire
session.
Describing two issue that affect sub sector
It is analysed that footwear industry grows every year in the terms of revenue, but there
are number of issues that also affect the industry in opposite way. These are as mention below:
Increase cost: This problem affect the overall sub sector in opposite way such that there
are different types of raw material used to make footwear and If the cost of these footwear is
increases, it affect the overall cost of the industry. On the other side, if the country's economic
situation is not stable, then it also affect the overall industry (Macchion and et.al., 2017). For
instance, if there is inflation rate, then the rate of products is also increases, that directly increase
cost of footwear as well. As a result, customers did not willingly pay to purchase high price
footwear and the financial performance of the company also got affected. On the other side, If
the company start using low material products, then it also affect the overall profitability in
opposite way. Therefore, sudden increase in cost of the products and poor quality affect the
overall footwear sector in opposite way. Even the firm did not satisfy the needs of customers and
as a result, the profitability affected in opposite way.
Technique related problem: Footwear sub sector also faces issues related to technique
such that techniques are the tool, machine and methods which are used in production of good.
Therefore, it is a part of technology and it is also consider as a problem for footwear sector. The
material last provide by CLRI is suited for shoes and sandals only but not for all footwear
fabrication and if it is used by them then it creates difficulties for fitting and stitching. In this
sector, they also faces issues related to lack of training while using technique. Such that most of
them are not aware how to manufacturer shoes by using advance technologies and as a result, it
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creates difficulty for them (Tsai and Jhong, 2019). In addition to this, the problem related to
technique is design and most of the manufacturer did not know how to use the tools to meet the
demand of customers. While on the other side, top footwear companies recruit best manufacturer
so that they may provide their own design and may also change the existing ones so that they
may stick up with changing fashions.
Therefore, this clearly reflect that by not complying with advance tools and techniques,
the footwear sub sector affected and that is why, both increase cost and techniques are consider
as a issue for this selected sector.
Using PESTEL, categorize two issue and explaining the reasons
As footwear sub sector faces issue related to increased cost and technique related
problem and this both are consider as a external factor that affect the overall industry. In the
same way, using Pestle analysis as a strategic management tool will help to identify how the two
issues are categorize under this.
Such that increased cost is categorize under economic factor because the factor is
majorly link with cost , interest rates. Therefore, due to sudden fluctuation in the country's
overall economy, it affect the rapid growth of the developing market such that the cost of raw
material is increases and as a result, it increase the actual cost of footwear as well. As a result,
people are not willingly pay to purchase any footwear. Not only this, sudden fluctuation also
increases the labour cost and revenue ear by the firm also decreases. Moreover, due to raise in
increases cost of the footwear, customers also shift towards another where they did not pay more.
Another issue is Technique related problem and it is concerned with technological
factor. As using advance tools will help the industry to develop the ability to innovate products
in so many ways such that from interacting with users to designing the products. But the
footwear sub sector did not use the same and as a result, it affect in opposite way. This issue falls
under technological factor under Pestle analysis because not using advance tools and techniques
consider an issue (Kadar, Devadasan and Balakrishnan, 2019). Even they did not provide
effective training session to the manufacturer to use these advance techniques into the working
area in order to save cost and increases efficiencies as well. By using best techniques, footwear
sector also increases its profitability and also leads to sustain the brand image as well.
On the other hand, it is also analysed that rapid technological obsolescence also threaten
the sector by putting the pressure to increase the product development. At that time, it is essential
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for the firm to use best and advance techniques such that online tools, mobile app are consider as
an advance tools and technique that helps to generate more source of revenue (Maciel and et.al.,
2017). In this modern era, using advance technique will help the firm to meet the demand of
customers and it also provide opportunities that based on new and changing technologies. Thus,
both factors are interlinked with external factor and it also affect the overall footwear industry as
well.
Describing the issues had a positive impact on business
Increased cost may also affect the Nike and Adidas in positive way such that it may
increase the demand of the customers and as a result, it increased the demand. Such that in the
country, due to any event, the cost of footwear is increases, then customers have to purchase the
products because they have no option (Marques and et.al., 2017). As there is a positive
interrelationship between increased cost and demand of customers such that most of high class
societies prefer to use the products with high range and Nike also provide the same. At that time,
they may agree to pay huge amount as well. Thus it shows the positive impact upon Nike.
Nike also uses high techniques related to manufacturing of footwear and this affect in
positive way. Such that in this competitive era, customers wants uniqueness in their products and
it is analysed that most of the techniques are used by Nike while manufacturing footwear is only
suited for shoes only. But still company uses the same in order to attract wide range of customer
and it also increases profitability as well.
Describing the issues had a negative impact on business
Increase cost may affect the business of Nike in opposite way such that it may shift the
customers towards another shop. Due to fluctuation in economy of country, business may also
affected in opposite way and it leads to increase cost. Moreover, the issue may also affect the
industry' s profitability such that people did not pay more when the quality is low and offered
products is not up to the mark. Therefore, it creates negative impact upon the business and it also
affect the brand image as well.
On the other side, by not complying with advance tools and techniques, company also
suffered such that in this competitive era, when Nike did nit supply the products online then it
affect its customer base (Polese and et.al., 2019). Therefore, most of the footwear company start
dealing online so that it will grab attention of many customers. In addition to this, Nike may also
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uses advance tools and techniques in order to increase the operational strategies but on the same
time, it also creates opposite impact upon management such that they completely depend upon
this tools only and as a result, human resource become decline that creates direct impact upon the
business.
Summary of the lesson learnt from this
My overall experience regarding this project is so good because I learn so many new
things that helps me to enhance my knowledge but I faced two main issue. First is not identify
difficult words related to footwear industry and external factor. This issue affect my project in
opposite way such that initially I did not understand the term but I overcome the problem with
the help of my mentor. He help me to understand the meaning of the difficult terms and as a
result, I reach to the conclusion. On the other side, another challenge is research skills. Though it
is my first project and I did not have effective research skills. Therefore, I faces issues to
research the topic. In order to overcome this challenge, I start making notes and then start
identifying terms that helps me to understand the sentence. Further, I also start using these key
terms in different ways and with the help of my mentor I also start developing research skill in
different projects as well. So that it will help me to develop these in my future projects too.
Overall, my experience of this project is so good and I also develop skills that helps me to
leads my project in successful manner. Moreover, I also gain enough knowledge related to the
project such that different issues that affect footwear industry in opposite way and how it affect
the overall industry as well. In addition to this, I also realized that I enhance my current
knowledge and that helps me in future projects too. Moreover, I felt good that my teachers and
mentors supports me whenever I faces any issue and they are also ready to provide assistance
and as a result, it motivates me to complete the report in better way and also raise my knowledge
as well as research skills. The lesson which I leant from this is footwear industry that contribute
to overall economy in positive way. Further, I also analyse that in every year, this industry is
raise up to 1% and also analyse that it contribute around one- fourth portion for the growth of
economy.
Beside this, I also learnt different external factors which affect the industry such that I
learn PESTLE framework and its six types of factor and then I analyse how to categorize two
main issue fall under this. At that time, I learn economic factor, technological are the two main
factor that cause issues and it also affect the overall sector into opposite way. In addition to this, I
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also learn how any issue creates positive impact upon business and as a result, it leads to raise
profitability. On the other side, I also enhance my statistical knowledge by using different figures
and facts which I used during an entire project. I analysed that this also assist me to grab future
goals of my life. Therefore, the overall experience with regards to this project is good and I also
learn so many things that may be utilized in my future projects too.
CONCLUSION
By summing up above report it has been concluded that footwear industry contribute high
amount for growth of economy in UK. Though there are many issues that affect the overall
business but report concluded increased cost and technique related issues are consider the most
effective issues in footwear sector. Study further concluded that increased cost lies on economic
factor while, techniques related issue lies on technological factor under Pestle. Lastly, report
concluded that these issues affect the business in both positive as well as negative way such that
it may attract customers but in the same time, it increases competition as well, that affect the
overall sub sector too.
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REFERENCES
Books and Journals
Kadar, U. A., Devadasan, S. R. and Balakrishnan, K., 2019. Design of agile supply chain model
for footwear industry. International Journal of Business Excellence.17(2). pp.230-244.
Macchion, L. and et.al., 2017. Personalisation management in supply networks: an empirical
study within the footwear industry. International Journal of Manufacturing Technology and
Management.31(4). pp.362-386.
Maciel, V. G. and et.al., 2017. Comparative life cycle assessment among three polyurethane
adhesive technologies for the footwear industry. ACS Sustainable Chemistry &
Engineering. 5(9). pp.8464-8472.
Marques, C. S. and et.al., 2017. Knowledge, innovation, internationalisation and performance:
insights from the Portuguese footwear industry. International Journal of Entrepreneurship
and Small Business.32(3). pp.299-313.
Polese, F. and et.al., 2019. Sustainability in footwear industry: a big data analysis. Sinergie
Italian Journal of Management.37(1). pp.149-170.
Tsai, W. H. and Jhong, S. Y., 2019. Production decision model with carbon tax for the knitted
footwear industry under activity-based costing. Journal of cleaner production. 207.
pp.1150-1162.
Online
Footwear UK. 2018. [Online]. Available through:
<https://www.statista.com/outlook/11000000/156/footwear/united-kingdom>.
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