BUS214 Marketing Management [SWOT ANALYSIS]

Esprit Australia | 8
Appendix 3
PEST Analysis
Economical
Australia is ranked as the 13
th
largest economy in the
world in 2009 with an estimate of US$1.0 trillion of
value for its goods and services produced. Its economy
has expanded for 18th successive years in 2008-09.
With a robust and resilient economy and close proximity
to the rising Asian markets, Australia will enhance its
standing in the world ranking in terms of its GDP
growth and its overall economy.
Australias retail turnover has been stable fell 0.1% in
March quarter 2011. Although there is a slight fall in
turn over, it is safe to say that the retail sector is stable.
Moreover, the result may be due to the impact of the
Queensland flood in 2010. A stable retail sector will
affect decision making from the Esprit management
team.
Australia has a healthy unemployment rate of 4.9%.A
high employment rate means that locals have the ability
to purchase products. This would also affect Esprits
ability to attract employment.
Consumers in Australia have high bargaining power, as
the retail industry is competitive.
Industry events such as the Australian Fashion Week
will provide the opportunities for Esprit to showcase
their products.
Political
In 2010, a research done by IMD World
Competitiveness Yearbook ranked Australia 3
rd
in terms
of political stability. A good and stable government. A
stable government boosts investors confidence and
brings prosperity for its people, thus affecting the way
Esprit operates.
A clean and transparent government will implement
policies that help to provide a fair and competitive
market. The Corruption Perceptions Index 2010 ranked
Australia 8 out of 178 countries.
There may be a few government policies may affect
fashion retail industry. Government, may control
factors by limit work force age, control retail or fashion
concepts that are operating in the country.
Government policies generally attract foreign
investments to the country. This may result high threat
of entrants and substitutes to Esprits product.
Government decisions on taxes, such as goods service
taxes, or corporate taxes may affect revenue of Esprit.
GST would affect price display, billings, bad debts,
agency relationship and staff fringe benefits. Currently,
the GST rate is taxed at 10%.
Social-Cultural
Australians are largely influenced by western countries in terms of
fashion. This will affect Esprit product lines, as they aim to meet
consumers taste.
Information is readily available via the media, such as the Television,
Magazines or the Internet. This affects how the society at large dress
and portray themselves. This thus affects Esprits decision to on its
products.
Increasing trend of online shopping provides a platform for Esprit to
work on. It provides more competition as well as opportunities for
the company
Australia is a big national divided into states, cities and suburban
areas. Different areas might have a different taste and appeal to
products, Thus, Esprit must carefully manage and watch the product
life cycle of their products.
As compared to the America, Australia is considered to be rather
conservative country. Therefore, the visual communication Esprit
wish to display should not offend or be too provocative.
Major Fashion events such as LOral Fashion Festival and the
biannual Rosemount Australian Fashion Week provide a showcase
and product launching platform for Esprit.
In accordance to the Australia 2006 census, Australia is shifting
towards an ageing population which would result in the a reduced
output and consumption per person. This affects the retail industry in
general.
Technological
A survey conducted by the Department of Broadband in 2008 shows
that 75 percent of Australian household had a computer, and of
those, 90 percent connected to the internet. This provide an
opportunity for retail business to conduct their operations online (e-
store, promotions etc)
Advancement of internet meant that Australians are more aware of
global trends. This would affect Esprits product line decision.
With the low entrant barrier, online shopping can be a indirect
competitor to Esprits business.
Internet can be an effective tool for marketing and customer
relationship management programme. Esprit must be consistent in its
image both online and offline. At the same time, Esprit can leverage
on the internet to watch its competitors, in terms of the product and
marketing strategy.
Emergence of New Media such as Facebook, Twitter and Blogs
affects how Esprit communicates and reach es out to its consumers.
According to a survey conducted by the Australian Interactive Media
Industry Association in 2009, 36% of the Australians access to their
emails with their mobile phone. This creates an additional
advertising ground for Esprit such as sending Electronic Direct Mail
to their customers
With the rising use of social media website, there will no longer be a
fashion dictatorship. People will use these media platforms to
express their opinion and reviews on their likes and dislikes, creating
more fluidity and divergence causing fashion to be in and out
quickly.
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