Published by MBA Skool Team, Last Updated: February 27, 2021
PESTLE Analysis of New Balance analyses the brand on its business tactics. New Balance 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 New Balance, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
Let us start the New Balance PESTLE Analysis:
The political factors in the New Balance PESTLE Analysis can be explained as follows:
New Balance operates in over 120 countries, so it has to properly analyze the political environment of the various countries. Political instability in the country affects the profitability of the business adversely. The US has a low interest rate which really helps in the growth of this industry. The brand must always follow manufacturing laws in the countries in which it has its manufacturing plant. These factors are not in control of the business but are very important for the business to grow. Political conflicts between countries also put an impact on the revenue of the brand. The government of the various countries have made new laws to address the problem of COVID-19 so a New Balance must follow these laws to satisfy its various stakeholders.
Below are the economic factors in the PESTLE Analysis of New Balance:
New Balance sells medium price products which have a good reputation among its customers.
So, this company faces less threats from the economic factors like inflation rate, GDP, growth rate etc. However, decrease in the level of income of the people may force them to move to low priced products which can decrease the demand of the products of the brand. It earned a good amount of profit last year, so the company has a good amount of resources to chase after small emerging markets to increase their revenues. Due to COVID-19 many people have lost their jobs and are left with less income to spend. This is a major threat for the company revenues and profitability which companies need to address.
Following are the social factors impacting New Balance PESTLE Analysis:
New Balance shoes are widely accepted in the sports industry. The company enjoys good social status among its customers. The culture of the people varies from country to country. It operates in more than 120 countries so it needs to have a close look at the social factors of that country. As people are becoming more health conscious now, New Balance has a great opportunity to increase their revenue as their brand has a good name in the sports and fitness industry. Also demand for the sports apparel will also increase due to this, which is really good news for the company. All these social factors need to be considered by the company to choose the right marketing campaign to attract its potential customers.
The technological factors in the PESTLE Analysis of New Balance are mentioned below:
Technology plays a very important part when it comes to innovate in different ways. From producing goods to interacting with customers technology plays a very crucial role in enhancing the experience of the customers. The rise of social media today has allowed various companies to use valuable information through various metrics allowing them to target their potential customers. As New Balance faces intense competition from various major brands like Nike, Puma etc. so adoption of innovative technology really helped the company in competing with major competitors in the footwear industry. It should continuously innovate and be compatible with the new technologies. Technology trend awareness is very important for any company to capitalize the benefits of that technology. Also new technology helps in producing innovative products at less cost thus improving overall profitability of the firm.
So the brand must not afford to overlook technological factors to gain the competitive advantage.
Following are the legal factors in the New Balance PESTLE Analysis:
As New Balance operates in various countries, therefore laws and regulations of different countries are different. The legal obligations of the particular country can impact the whole industry in respect of competition, employment and health. It must follow national as well as international laws to be within the legal factors. It has ownership of intellectual properties and patents for avoiding other companies to copy its product design. As a big company it has trademark production too. Countries continuously make changes in their laws and regulations according to their needs. The company must tackle such issues to sustain their global presence. Taking example of recent time many countries have introduced workplace regulations to tackle the problem of the COVID-19, so New Balance should make sure that they abide by these regulations and at the same time increase their revenues. Companies cannot afford to ignore legal factors of a particular country as non-compliance of it may result in heavy penalty on it.
In the New Balance PESTLE Analysis, the environmental elements affecting its business are as below:
New Balance has stopped using the restricted material in production and packaging of the product. The company has also committed towards reducing carbon emission resulting from their production process. This shows that the company is really working towards saving its environment. Low waste initiative program was started by the company to tackle the problem of waste it creates during the production process. The analysis of environment factors become very crucial as ignoring these factors may tarnish the image of the company.
The company is committed to ethical business practices which have enhanced the image of the company in the world. To address the issue of non-renewable plastic it has substituted plastic bags with renewable bags at all its stores worldwide. This shows that Company really considers these factors very important in designing its marketing strategy.
To conclude, the above New Balance 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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