MRKT 20057: Strategic Analysis of Ugg Boots in the UK Market

This report provides a strategic analysis of Ugg Boots' potential expansion into the United Kingdom. As the newly hired Marketing Manager, the author conducts an external environmental analysis using the PEST framework, examining political, economic, social, and technological factors impacting the footwear industry in the UK. The report highlights the attractiveness of the UK market due to its large consumer base and fashion consciousness, while also considering the implications of Brexit and the increasing importance of e-commerce. It concludes with recommendations for Ugg Boots to navigate the UK market effectively, emphasizing the importance of understanding local laws and consumer preferences to achieve a competitive advantage. The analysis suggests that the UK market is suitable for Ugg Boots' expansion if the company carefully considers the identified external factors.

Running head: GLOBAL BUSINESS MARKETING
GLOBAL BUSINESS MARKETING
Name of the Student
Name of the University
Author Note

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Executive Summary
The given report throws light on the strategic management and expansion of any business to an
international country. Australian Ugg Boots wants to expand its business to the external
international market outside of Australia and hence, the marketing manager is required to
conduct an external analysis for the same. The report follows a systematic format whereby it
introduces the topic followed by a brief on the company. The main body of the report
concentrates on the PEST Analysis of the chosen country, the United Kingdom which is then
followed by recommendations and conclusion for the same.

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Table of Contents
Introduction......................................................................................................................................3
About the Product............................................................................................................................3
About the country............................................................................................................................3
External Environment Analysis.......................................................................................................4
Political Factors...........................................................................................................................4
Economic Factors........................................................................................................................4
Social factors...............................................................................................................................5
Technological factors...................................................................................................................6
Recommendations and Conclusion..................................................................................................6
References........................................................................................................................................8

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Introduction
External environment analysis forms an integral part of any business organization. The
primary reason behind this is that the business organization has various factors related to the
dynamic environment and it is essential for them to conduct an external environment analysis on
various dimensions like Political, Economical, Socio-cultural and Technological (Barney, 2014).
The given report states the external environmental analysis in the chosen country. The country
chosen by Australian Egg Boots is the United Kingdom. The PEST Analysis will used.
About the Product
The Australian UGG boots are handcrafter shoes made in Australia. The shoes have been
made for individuals conscious about their well being as well as about fashion. The shoes are
available in various categories and for all age groups (Australian Ugg Boots Pty Ltd., 2018).
They are used for all age groups and can be worn to protect oneself from cold. The stylish design
and good quality material used to make the product is the primary selling point. The product is
priced on the upper hand with a shoe for women priced at 110 AUD on an average. The boot for
men is priced at 150 AUD and the kid`s products are priced at AUD 80.It can be stated that the
given product is priced at a rather high range and is meant for the premium segment of the
market.
About the country
The United Kingdom comprises of the England, Scotland, Wales and Northern Ireland
and is situated in the northwestern part of Europe. The capital of the United Kingdom is London
and the city is an influential centre of finance and culture. The consumer market in the United
Kingdom is very large and according to Bettis et al. (2014), consumers have spent roughly $100
bn on footwear n 2016.This figure is the largest outlay in the globe with respect to the given
products. However the share of consumer spending has been declining and the figure has been
5.8% in 2016 as compared to 6.4 in 2010.

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External Environment Analysis
When a business decides to expand its operations in other countries for the purpose of
international trade and sales, the business needs to scrutinize the external environment of the
business in order to make sure that their investment decision is correct. The given section will
strategically analyze the business environment of the footwear industry in United Kingdom. The
tool used for the analysis is the PEST Analysis (Eden & Ackermann, 2013). The PEST Analysis
is a strategic tool which assists in identification of the various components of the external
environment. The PEST is an acronym for the factors of Political, Economic, Social and
Technological Factors. The PEST Analysis of the UK footwear industry is as follows:
Political Factors
The political factors are based on the government intervention of a particular economy.
Political factors primarily comprise of arenas like taxation, labor laws, environmental laws, trade
tariff and restrictions along with the stability of the political government (Ginter, Duncan &
Swayne, 2018). The given factors might also include the services and goods which the
government at large wants to provide and those goods which it does not want to provide. The
political factors tend to have an impact on the purchasing power of the customers in the industry
and on health, education, infrastructure of a particular nation.
The footwear industry in the United Kingdom was considered to be the most attractive
industry due to the number of jobs which it was capable of creating. UK has ancient history of
getting imports from various counties and this has taken a downturn recently (Martinsuo, 2013).
This means that the country is not being able to produce as cheap products as that of the low cost
manufacturers based in other countries (Peng & Nunes, (2017). The current political scenario of
Brexit will also have an impact on the given business scenario of the booth company. The
various considering legislations related to this are laws covering minimum wages, working times
and the imports made.
Economic Factors
The economic factors consist of factors like economic growth, interest rates, inflation and
exchange rates (Hill, Jones & Schilling, 2014). The economic factors are primary determinants

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of the flow of operations and decision making in the given business enterprise. For instance, the
inflation rate affect the purchasing factor of the people in the economy and the interest rates
determine by the economic decision makers affects the capital cost and the growth of the
business (Stead & Stead, 2013). The exchange rates often tend to affect the internal imports and
exports of goods and services.
The economy of United Kingdom has been supported by Gross Domestic Product growth
which generally tilts towards the various service industries, retailers, financial sectors and sunrise
industries (Slack, 2015). Although the traditional industries have continued to decline, industries
such as footwear and clothing have undergone a huge rise (Morschett, Schramm-Klein & Zentes,
2015). The lifestyle and fashion statement of people has changed considerably and therefore this
could have an impact on any country entering the market. The job instability due to the Brexit
scenario may have impacts.
Social factors
The social factors comprise of the cultural aspects of the population in the given
economy. These factors are health consciousness, growth rate of the population, age factors,
attitude towards the career and the emphasis of the people in the economy on well being. The
particular factor which determine the social factors have a huge impact on the demand for a
product in the given market. For example, if the younger generation in the given market grows
then it is quite expected that the rise of fashionable products and technologically advanced
products will be expected. In the same manner if poor the population of the older generation
rises then the cost of labor shall increase (Wheelen et al., 2017). Depending upon this, various
companies then change their strategies according to the needs of the target market.
The dress and fashion sense of the society s a huge indicator of the demand placed by the
consumers on the given economy (Ho, 2014). The United Kingdom has always been on top
when it comes to fashion. Hence, any new style goes unmissed in the given country. The fashion
industry has undergone a huge boost due to the e-commerce industry growth. Furthermore, the
given temperature in the given country causes people to stock winter clothes and this causes
Australian Boots the perfect opportunity to market their products in the given country.

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Furthermore, due to the high income level and standard of living, the nationals in UK
often prefer branded and good quality products. Although sportswear dominates the industry
primarily in the given sector however, winter collection is very popular as well.
Technological factors
These factors comprise of factors which relate to Research and development activities,
automation, incentives and rate of change with respect to technology (Lasserre, 2017). The
technological aspect of any industry relates to the barriers to entry production efficiency and
costs quality related to innovation as well.
The demand for clothing and footwear has increased with the rise in fashion notion of the
people an as the winter collection has always been particular about quality of the goods,
technological advancement goes a long way in determining the production and facilitation of
goods and services (Gupta, 2013). The winter collection has certain requirements which it needs
to follow in case it is producing the good in the given industry and in case it is so, the given
scenario in the United Kingdom would be perfect for the company as the given country is quite
technologically advanced.
Furthermore, if the company plans to enter the given market through online portal then
the exposure of the United Kingdom market to the various e-commerce websites would go a long
way in abiding by the company`s policy and it will become extremely easy for the firm to reach
out to the potential customers through the online portal (Rothaermel, 2015). This would make
the business environment very suitable for the given firm.
Hence from the given PEST Analysis it can be stated that the business environment of
United Kingdom is quite suitable for expansion of the Australian Ugg Boots and the company
should look out for the various legislative laws and rules in order to make its entrance easier and
achieve success.
Recommendations and Conclusion
Therefore, from the given analysis it can be stated that scanning the international business
environment is essential before selling or marketing the product to any other country. This is

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because there is a presence of various factors in the market which then tend to form a barrier or
hindrance on the different factors which exist in the given country. If the factors analyzed from
the external environment are taken care of then it becomes very easy for the firm to achieve a
competitive advantage and success. The given report discussed the various external
environmental factors using PEST Analysis and it could be seen that the environment of United
Kingdom is suitable for the expansion of Australian Ugg Boots.

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References
Australian Ugg Boots Pty Ltd. (2018). Australianuggboots.com.au. Retrieved 17 April 2018,
from https://www.australianuggboots.com.au
Barney, J.B. (2014). Gaining and sustaining competitive advantage. Pearson higher ed.
Bettis, R., Gambardella, A., Helfat, C. & Mitchell, W. (2014). Quantitative empirical analysis in
strategic management. Strategic Management Journal, 35(7), pp.949-953.
Eden, C. & Ackermann, F. (2013). Making strategy: The journey of strategic management. Sage.
Ginter, P.M., Duncan, J. & Swayne, L.E. (2018). The Strategic Management of Healthcare
Organizations. John Wiley & Sons.
Gupta, A. (2013). Environmental and pest analysis: An approach to external business
environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), 13-17.
Hill, C.W., Jones, G.R. & Schilling, M.A. (2014). Strategic management: theory: an integrated
approach. Cengage Learning.
Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European
academic research, 2(5), 6478-6492.
Lasserre, P. (2017). Global strategic management. Palgrave.
Martinsuo, M. (2013). Project portfolio management in practice and in context. International
Journal of Project Management, 31(6), pp.794-803.
Morschett, D., Schramm-Klein, H. & Zentes, J. (2015). Strategic international management (pp.
978-3658078836). Springer.
Peng, G. C., & Nunes, M. (2017). Using PEST analysis as a tool for refining and focusing
contexts for information systems research.
Rothaermel, F.T. (2015). Strategic management. McGraw-Hill Education.
Slack, N. (2015). Operations strategy. John Wiley & Sons, Ltd.

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Stead, J.G. & Stead, W.E. (2013). Sustainable strategic management. ME Sharpe.
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. & Bamford, C.E. (2017). Strategic management
and business policy. pearson.