BUS301: PEST Analysis Report on Hollister's South Africa Venture

This report presents a PEST (Political, Economic, Social, and Technological) analysis of the American lifestyle brand Hollister, owned by Abercrombie & Fitch, focusing on its potential expansion into the South African market. The analysis examines the impact of political factors, such as government regulations and trade policies, and economic factors, including inflation, interest rates, and labor costs, on Hollister's business decisions. It also explores social factors, such as consumer demographics and cultural preferences, and technological factors, including the role of the internet and technological advancements, which can either positively or negatively influence the company. The report concludes that a thorough understanding of these external factors is crucial for Hollister to shape its business activities appropriately and succeed in the South African market. The study references relevant academic sources and provides a visual representation of the PEST analysis.

PEST Analysis
on
Hollister

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. PEST analysis on Hollister......................................................................................................1
CONCLUSION................................................................................................................................3
REFERENCE ..................................................................................................................................4

INTRODUCTION
A PEST analysis is an analysis of the external macro-environment that affect to business.
PEST is an acronym for the political, economic, social and technological factors of external
environment. Present study is based on the “Hollister” is an American lifestyle brand owned by
Abercrombie & company. It is founded in July 27, 2000. They want start their new business in
South Africa. They have currently stores across the US and Europe. Study lays emphasis on
PEST analysis on Hollister company.
TASK 1
1. PEST analysis on Hollister.
Political factor
Government regulation and legal factors affect the Hollister environment and trade
market. The main issues in this factor includes Political stability, tax guidelines, trade
regulations, safety regulation, and employment laws (Abner and Spurgeon, 2018). Customary
law followed by the South Africa government. This law affect to the Hollister business. They
have to do changes according to this law. South Africa's trade policy can also affect the
decision-making of Hollister while expanding market over there. Like for example Company
must engage in providing employment opportunities to people of that region and support
regional growth. South African Customary law can also affect there business, like services must
be given according to the needs and demands of people.
Economic factor
With this factor, Hollister can examine the economic factors issues that have impact on
the company. This include factors like inflation, interest rate, economic growth, the
unemployment rate and policies and the business cycle followed by the firm (Ingrao and et.al.,
2017). South Africa's economic condition can impact the performance of their stores. For
improving the sales the economical condition of region must be stable. Like for example due to
high inflation rate in South Korea Hollister has bear loss.
For example: Increase in labour rate can impact the business and customers too. That simply
mean is the number of labours are working in the business. In the South Africa they introduce
their new store. Their they want higher number of worker who are working with them. In case
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they not hire proper and sufficient workers they faces losses. B. Labour cost totally depends on
the country economic.
Social factor
The social factor, a Hollister can analysis the social economic environment of the market
by element like customer demographics, cultural limitation, lifestyle attitude and education
(Alava, 2018). By these, they can understand the consumer needs and bring them to market for a
purchase. But South Africa lifestyle is different from Hollister parent place. They need to set
price according to the purchasing power of target group as higher cost structure can provide
disadvantage to Hollister.
For example: The purchase that requires a high level of involvement. The consumers will have
various choices and develop beliefs about each choices that needs to be followed by company
Hollister have to design and select clothing pattern according to the taste and preference of target
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Figure 1: PEST analysis
Source : PEST Analysis, 2017.

group. Designing product's according to taste and preference of consumers it will lay positive
impact and will also increase productivity, increase their morale and also improve customer
services. According to this, Social factor affect to the business in negative and positive effect
then they start their new business in South Africa.
Technological factor
Technological factor can either positive and negative impact to the Hollister. These factor
include technological advancements, lifestyle of technologies, role of internet and spending on
technology research by the government (Rubio and et.al., 2018).
For example: there is very easy to use existing technology but when new technology introduce in
the marketplace then it difficult to use and give negative impact. They use social media to
promote their business in south Africa. This factor give positive impact on business like:
customer purchase and live comment on website that see by all. This help increase there
customer. While negative effect is customer not get right information on the site. According to
this technology affect to Hollister in negative and positive.
CONCLUSION
From the above study it had been concluded that PEST analysis has useful technique for
reviewing the external forces that impact on business. That helped to understood the
macroeconomic business environment. In case of Hollister, political, economic, social and
technological factors affect to business development. By understanding these factors in the
external environment, company shaped its activity appropriately.
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REFERENCE
Books and journals
Abner, M. and Spurgeon, E., 2018. Using the PEST Framework to Facilitate Active Learning in
Fashion History Class.
Alava, R.P. and Mu, J.M., 2018. PEST Analysis Based on A Case Study for. Neutrosophic Sets
and Systems. p.84.
Ingrao and et.al., 2017. Biocontrol on the edge: Field margin habitats in asparagus fields
influence natural enemy-pest interactions. Agriculture, ecosystems & environment. 243.
pp.47-54.
Rubio and et.al., 2018. Anti-odour and antibacterial fabric in textile goods. U.S. Patent
9,907,311.
ONLINE
PEST Analysis. 2017. [Online]. Available through. <https://pestleanalysis.com/pest-analysis/>
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