PEST Analysis of Hollister: External Factors and Business Strategy

This report presents a PEST (Political, Economic, Social, and Technological) analysis of the lifestyle brand Hollister, focusing on the external macro-environmental factors influencing its business, particularly in the context of its potential expansion into the Indian market. The analysis examines how political stability, trade regulations, tariffs, government regulations, and legal issues impact Hollister's operations and profitability. Economic factors such as interest rates, inflation, unemployment, and credit availability are also assessed for their effects on sales and profit. The social factors, including population growth, education, age distribution, and consumer attitudes, are considered to understand market demands. Finally, the report investigates how technological advancements, including automation and R&D, influence product development, cost structures, and market competitiveness. The conclusion summarizes the positive and negative impacts of these factors, highlighting the importance of adapting to external changes, especially within the dynamic Indian market.

PEST Analysis of Hollister

Table of Contents
INTRODUCTION...........................................................................................................................1
PEST Analysis of Hollister..............................................................................................................1
CONCLUSION ...............................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
This reports shows about PEST analysis in which it defines all the external macro
environment that effect organization. It describes a framework that how external factors
influence Hollister in positive and negative ways. These factors are beyond the control of
Hollister. Hollister is a life style brand company it was established in 2007 at Easton Town
Centre in Columbus. This is a clothing company, it designed to attract consumers aged 14-18, at
a lower price than the other brands. It wants to expand its business in India which is the 7 largest
country by area which have more than 1.2 billion people. In the following study PEST analysis
for Hollister will be done that how these macro external factors can influence this organization.
PEST Analysis of Hollister
Political Factors: Political factors play a significant role in determining the factors that
impact on Hollister. Political stability influences to Hollister because it set a structure of rules in
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Illustration 1: PEST Analysis
Source: PEST Analysis, 2016

country when political instability come in country then rules and regulations are changes
continuously. In international business of Hollister trade regulations and tariffs can also
influence, because from these factors cost of product is increased or decreased (Sammut‐Bonnici
and Galea, 2015). When tax and tariffs are increased for clothing industry then this become
reason of increasing cost of product for Hollister as well as market and because of this profit is
reduced of Hollister. India runs on a federal form of government. There are many multivariate
factors such as octroi and utility taxes, service taxes which are taken care by local bodies, impact
on business environment of India. Government regulations and legal issues affect a company's
profitability and success such as mandatory employee benefits and minimum wages regulations
can also effect Hollister because after applying this Hollister have to give all benefits which are
compulsory and minimum wages have to provide its all workers or employees which increase
cost for and decrease profit of Hollister (Grünig and Kühn, 2015).
Economical Factor: This examines issues of outside that can play role in success of
Hollister. Interest rate, inflation, unemployment, credit availability these can be reason of profit
and loss of Hollister. Such as if inflation rate is increased then credit flow of buyers will decrease
from which buyers resist for extra expenses which will decrease sales of Hollister that directly
affect profit of organization. There arte some policies like liberalization of foreign capital and
reductions in industrial licensing help in constant improvement and growth of India's economic
environment. Skill level of workforce is also put impact on Hollister because if more skilled
workers are available then it decreases cost of wastage and reduce chances of errors. Through
this Hollister can achieve customer satisfaction which helps to increase customer loyalty and
brand value of Hollister. Growth of Hollister is dependent upon total economic growth of
country it fluctuates according to that, so economic growth can also become a factor which
influences Hollister (Schuetz, Mair and Schrefl, 2018).
Social Factor: Social factors are demographic and cultural factors of external
environment which affect Hollister and India. These factors can be population growth rate,
education, age distribution, career attitude of buyer and others. For example, India' ageing
population is rising that lead in rise in pension costs and also increase in older worker
employment. These factors are used to identify that what customer needs and what bring buyers
to the market to purchase clothing of Hollister. It offers wide range of cloths which can change
according to market demand and belief and attitude of buyers and customers. Because shared
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belief and attitude of population plays great role for marketers of Hollister. Entrepreneurial spirit
and broader nature of society helps to increase the profit of Hollister because this class has its
own perception which is not fluctuated easily. Some societies encourage entrepreneurship while
some don't (Alava and Mu, 2018).
Technological Factor: This is fast disrupting in various industries. In today's time
technology is changes in day to day life. Impact of technology can be seen in product which is
offering in market. Technology put its impact on cost structures also because through applying
advanced technology cost of product and wastage can be decreased. Technologies influence
development of products and help in using cost-cutting processes. India possesses strongest IT
sector in the world and also promote IT development. With the introduction of new product, new
technology or services by Hollister a certain marketplace can have a tough time to adjust with
new technology so its important or Hollister to assess the technology from all angles that it will
impact positively or negatively to buyers and customers. In current time government and
organizations both investing in R&D and technological advancement and this is beneficial for
Hollister. When Hollister will use new technology to make its product then quality of product
can will increase and cost will decrease which generate profit for organization. Major
technological actors that can affect Hollister such as automation, technology incentives, R&D,
technology change in market and others(Dobele, 2015).
CONCLUSION
From the above study it has been concluded that all external factors (political, economic,
social and technological) have Their different impact on Hollister. All factors affected Hollister
positively as well as negatively. Economic, social and political are those factors on which
organization can not have any control these factors have their impact according to situation but
in technological factor if any changes is occurred than Hollister can control this by making some
changes in its technology as well.
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REFERENCES
Books & Journals
Alava, R.P. and Mu, J.M., 2018. PEST Analysis Based on A Case Study for. Neutrosophic Sets
and Systems. p.84.
Dobele, L.A.S.M.A., 2015, April. Factors which influence the development of social innovation.
In Proceedings of the 2015 International Conference “Economic science for rural
development (No. 40. pp. 226-238).
Grünig, R. and Kühn, R., 2015. Global Environmental Analysis. In The Strategy Planning
Process (pp. 89-96). Springer, Berlin, Heidelberg.
Sammut‐Bonnici, T. and Galea, D., 2015. PEST analysis. Wiley Encyclopedia of management,
pp.1-1.
Schuetz, C.G., Mair, E. and Schrefl, M., 2018, October. PESTEL Modeler: Strategy Analysis
Using MetaEdit+, iStar 2.0, and Semantic Technologies. In 2018 IEEE 22nd
International Enterprise Distributed Object Computing Workshop (EDOCW) (pp. 216-
219). IEEE.
ONLINE
PEST Analysis. 2016. [ONLINE] Available through <http://www.netmba.com/strategy/pest/>.
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