Prada PESTLE Analysis

Published by MBA Skool Team, Last Updated: December 13, 2020

PESTLE Analysis of Prada analyses the brand on its business tactics. Prada PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand.

PESTLE analysis is a framework which is imperative for companies such as Prada, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.

Let us start the Prada PESTLE Analysis:

Political Factors:

The political factors in the Prada PESTLE Analysis can be explained as follows:

Prada is an Italian fashion brand manufacturing which is specialized in leather hands, shoes, perfumes, ready to wear clothing and several fashion accessories. It has its presence in more than 70 countries in the world. Every region has its own political situation which has to be considered by Prada as a brand for effective and profitable business all across the world. To be specific the government in Italy has come down due to break down of its political alliance. The election for new Presidential candidate is yet to take place. The change in political power may bring substantial changes in the policies that govern the country’s business. The integrity of new president and his initiative against the level of corruption is necessary to be considered. The stability of politics in region where Prada operates is important because the whole supply chain of fashion industry is governed by the law in that region. Also, the risk of military invasion should be taken into consideration before venturing into any new country for business as whole business might be disrupted if military rule comes in that specific country.


Image: pixabay


Economic Factors:

Below are the economic factors in the PESTLE Analysis of Prada:

The economy of Italy as a country is vulnerable to global economy.

The proof of the same was seen during 2008 world economic recession. It took no time for Italy and its economy to crumble. It was slow to recover. In such a situation Prada faces many issues. The interest rates shoot up which in itself creates problems for the business to function. Also, the customer won’t be able to buy costly accessories on loan basis as he rates would be sky rocketing. Political scenarios like Brexit may cause the import and exchange rates in the Britain market to change drastically. The currency rates of Italian Lire against the dollar is also critical since most of the international market of Prada operates in dollar terms, US being the major importer of fashion and accessories. Another important factor that decides the economic condition of business is the labor laws and minimum labor wages. Fashion industry is labor intensive and thus a lot depends on labor laws of a country.


Social Factors:

Following are the social factors impacting Prada PESTLE Analysis:

Fashion is not just related to rich and wealthy bunch of people these days. The disposable economic income of customer is increasing with passing time. People relate their living status and class to the fashion they carry on themselves. Prada should consider the economic class in the demographic they want to sell their product. It should not happen that there is a mismatch of class of people and product offered to them. Beauty ad fashion is more related and concerned with female customers and that division as well while targeting should be considered. People are more focused on quality and brand. They are little or not worried about the cost of product since their desire to buy fashionable and their inclination towards the same is more than ever.


Technological Factors:

The technological factors in the PESTLE Analysis of Prada are mentioned below:

Technology grows with time. The firms which keep up the pace with growing technology hails or else the firm starts going out of business and soon is not a competitor in market. Prada has been innovating with technology since the beginning. It was the first to get into market the ‘fashion phone’ with first capacitive touch even before Apple launched its iPhone. This was done in collaboration with LG. in April 2019 Prada confirmed that it is adopting a suite of Oracle Advanced technological solutions in its retail business. This is in view to better the experience that customers have when they visit Prada store for shopping.

Online website giving complete look of the products they have on sale is also result of adoption of advanced technology.


Legal Factors:

Following are the legal factors in the Prada PESTLE Analysis:

Various legal concerns are present for fashion manufactures like Prada. The changing taxation policies of various countries with time are serious concern because if the taxation policies are not obliged to then the fines and penalties are huge. Then comes the labor laid down by various government. Labor is the most important entity in manufacturing fashion products and thus this set of rules and regulation are necessary to be focused upon. Environment laws are strict than ever. This is a global concern and the pacts are signed by almost all the countries at United Nations to make this world a better place to live in. Merger and acquisitions is also to be legally followed, if at all necessary. Intellectual property or a design developed by Prada has to be patented or secure with a copyright so that its illegal usage by its competitors in market is avoided.


Environmental Factors:

In the Prada PESTLE Analysis, the environmental elements affecting its business are as below:

Fashion industry is evolving at faster speed than anyone could have ever imagined. This is more to do with raise in level of disposable income of fashion enthusiasts. But fashion and textile industry as a whole is second most polluting industry only after oil industry. The amount of waste that is generated by this industry is immense. Many firms have been severely penalized for polluting water bodies and air as well. The waste that is generated has to be neutralized under the regulations given by authorities and then only their disposal is permitted.

Renewable ways of manufacturing fashion products is something Prada and all other fashion manufacturing brands should focus on. Prada has its Re-Nylon project is to connect upcycling initiative around the world. Here in this project Prada turns harmful waste from old carpets to fishing nets into iconic and stylish Prada pieces.

To conclude, the above Prada PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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