Published by MBA Skool Team, Last Updated: March 07, 2021
PESTLE Analysis of Old Navy analyses the brand on its business tactics. Old Navy 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 Old Navy, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
The political factors in the Old Navy PESTLE Analysis can be explained as follows:
Old Navy is an American clothing and accessories company owned by gap Inc. with its headquarters in San Francisco, California, United States. Political factors can play a significant role in the long-term profitability of the company. This is mainly because Old Navy has its stores in various locations and hence it has to adapt to the political environment in all those locations. The political stability in a country determines how smoothly the industries or the companies operating in that environment would be able to bloom in the future. The integrity of the politicians and their decision making could have a great impact on the demand for the industry as well. The existence of policies for intellectual property protection is also of major concern for any business to start in a country. Apart from the eye protection there are different policies after government that could have an impact on the industry and hence this must be analysed well before entering into it.
Below are the economic factors in the PESTLE Analysis of Old Navy:
Old Navy brand is affected by several financial factors.
The changes in foreign exchange rate, interest rate, gross domestic product, inflation rate, employment rate, prediction of recession in a country are some of the major economic factors that could have a great impact on a company’s operations and its profit in the long term. High level of unemployment in a country could help the company to get cheaper labour which will help them to gain larger margins of profits. On the other hand, high levels of unemployment would also state that a smaller number of people would be willing to spend on nonessentials. The levels of GDP in a country are also a factor that could help in analysis of demand. The prediction of recession in a country could not only help a company to take decisions on its operations but also to take protective measures to survive in certain conditions. The government intervention in the free market and deficiency of financial markets maybe more such factors that could determine the availability or the ease of acquiring capital in the country.
Following are the social factors impacting Old Navy PESTLE Analysis:
There are several demographic issues that the retail industry faces no matter which country it is operating in. the population in the country also has a great impact on the demand. This is because declining population may lead to fewer population in stores. And an increase in population may result in an increase in multi generation households which could in turn impact the buying behaviour, leading to unpredictable buying behaviours. This industry is also impacted by the frequently changing trends that changes attitude of people and this usually takes place on social media. more and more industries are being impacted Irish people are being more opinionated on the Internet. Internet influencers hence play a major role in the clothing retail industry. Another social factor impacting Old Navy could be the rising education levels, people’s interest in the cultures and traditions of the country, leisure interests and gender diversity.
The technological factors in the PESTLE Analysis of Old Navy are mentioned below:
With an increase in online shopping technological advancements are needed to be kept on storefronts and the companies should take initiatives to enhance the online experience by ensuring availability of products and good customer service. today we live in a world where technology is advancing every single day and this in turn affects the companies throughout the globe and hence Old Navy must keep up with these advancements. Investment in research and development could help the company become sustainable for the long run by innovation and first mover advantage. The level of acceptance of technology must also be studied before adapting to any fancy technologies. Social media marketing is another technological factor that the company must invest in, as modern business environment demands it.
Such measures can also help companies to lead in market share and help the company gain competitive advantage in the industry.
Following are the legal factors in the Old Navy PESTLE Analysis:
Though the political and legal issues may go hand in hand, the legal issues are more related to the laws made by the government that every company in the industry has to abide by. Some of those laws maybe consumer protection laws, employee protection laws, anti-trust laws, health and safety laws etc. Abiding by these laws ensures smooth operation of Old Navy company in the country and away from any legal charges or law suits. Employment laws insure good conditions of the employees. If there are any unfair practices taken against the laws whether it is related to wages or related to the working environment conditions employees can question the management based on these laws. The consumer laws are in place so that the company cannot cheat its customers by selling bad quality products. antitrust laws are also in place to ensure that the business runs smoothly and fairly. Ensuring abiding by the law helps the company to operate efficiently without any extra expenditures and time spend on legal proceedings.
In the Old Navy PESTLE Analysis, the environmental elements affecting its business are as below:
People have now become more willing to shop at eco-friendly places as they are concerned with the amount of waste and pollution that are emitted by the prominent brands. companies in such detail industries would also use material that are provided by the external environment like plastic which could be heavily regulated in certain countries. Consumers have now started focusing on how companies use the products affecting the environment.
The company is also regulated to find out if their products use high level of energy or exhaust high levels of air waste. this could also be an issue for these retailers as consumers will be more conscious before buying these products. More factors like waste management, laws regulating the environment pollution, recycling, weather change, climate change etc may have a direct impact on the final products or an indirect impact on its raw materials.
To conclude, the above Old Navy 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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