Published by MBA Skool Team, Last Updated: April 04, 2021
PESTLE Analysis of Clinique analyses the brand on its business tactics. Clinique 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 Clinique, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
Let us start the Clinique PESTLE Analysis:
The political factors in the Clinique PESTLE Analysis can be explained as follows:
Clinique is one of the leading cosmetics and beauty brands in the FMCG sector. This is an American brand manufacturing cosmetics, toiletries, skincare and fragrances. It has stores in over 135 different countries worldwide. There are a number of different political factors in each of these countries which influence the profitability and performance of this brand. The political stability in the operating countries is the most significant for this international brand to operate and successfully grow its business over the region. With different trade policies having strict entry and exit barriers may demotivate this cosmetic brand with high imposed taxes. Even the government set rules and regulations guidelines in different countries sometimes put a red tape on the operations of this brand. For e.g. In some countries, the policies related to the ingredients and composition of skincare and beauty products makes this brand change its strategy planning process. Policies on products testing on animals, non-carcinogenic product ingredients etc. need to be adhered to lawfully and ethically by this brand for bringing more customer loyalty and high returns.
Below are the economic factors in the PESTLE Analysis of Clinique:
A number of economic factors in different operating countries impact the business model of Clinique.
This includes factors such as rising taxation, high import-export duties, inflation, recession and currency exchange rate risks etc. Due to COVID-19 pandemic globally, the sale of this beauty and skincare brand dropped tremendously. Due to lockdown restrictions, the customer demand dropped drastically as its stores are mostly in high end stores and malls. Even with rising inflation, the prices also increased which dropped sales and huge profit margins. With high GDP growth rate and good economic conditions, disposable income tends to increase on luxury and beauty products. This is a good opportunity for a brand like Clinique to strategically cater the consumers’ needs and demands with right pricing and segmenting the target market. It can become a market leader in an emerging economy like India with its highly demanded customized and chemical free products.
Following are the social factors impacting Clinique PESTLE Analysis:
Society has a major role to play in driving consumer lifestyle and choices. People usually get influenced by the community around them. With demographics such as age, gender, income, education level and employment standard and earnings, the consumers tend to make their buying decisions. Culture and traditions in any society is an important factor for their choices. In some societies, there is more demand for homemade beauty products as compared to products from International brands in the market. Clinique has a major disadvantage in this segmented market. It needs to strategically position itself here. The factors such as gender stereotyping in a patriarchal society, certain norms and values like no animal tested products etc. impacts the business for this brand. It needs to research its target market and tailor its strategies according to the context. It must adjust its business practices in accordance with the purchasing pattern. Both the macro and micro environmental factors need proper attention for making functional level strategies. Like the marketing, branding promotions etc. need to clearly send the message across for attracting customers. It should cater to the varied customer needs according to their skin types and offer the required products. In India, a lot of natural and herbal skincare and beauty brand rivals have come up like Nature’s Tattva and SkinKraft etc. to compete with Clinique. The local Indian brands pose a threat for this brand to retain customer loyalty. It should offer a unique value proposition to its customers with its quality products having no parabens and harmful chemicals which can cause skin problems. This can lead to high market share and increase its revenue.
The technological factors in the PESTLE Analysis of Clinique are mentioned below:
Technology has a role to play in the beauty and skincare products today. Clinique is leveraging high technological innovation in its products like custom-fit skin care, makeup, fragrances. It is constantly involved in innovating new skin friendly products with its research and development processes. It is making use of Artificial Intelligence for customized experience with products having appeal from younger generations. This brand has also invested heavily in developing its free Clinical reality application for customers to upload their face close up snaps in order to get personalized recommendations for their unique skin tone and complexion. It has also spent on creating the best customer experience beforehand by buying skincare and cosmetic products. It was the first brand to revolutionize shopping experience with integrated digital technologies. It has cutting edge virtual makeover tools run by TAAZ technology, Smart Bar technology powered by Microsoft Surface etc. at every interactive touchpoint. All this gives it a first mover as well as competitive advantage over other competitors. With smart technological advancements, it is important for this brand to offer personalization in order to stand out from the rest. It is also important to map out effective business strategies continuously to attract new customers and retain existing ones. It also takes into consideration the use of VR and Augmented Reality technology for its processes and operations. The brand has also launched its products on E-commerce platforms for selling in almost all operating countries.
These factors influence customer’s purchasing decisions and make the brand profitable with high sales.
Following are the legal factors in the Clinique PESTLE Analysis:
There are a number of legal factors which a skincare and cosmetics brand like Clinique should consider during day-to-day business operations. Factors such as consumer protection laws, intellectual property laws, data protection and health and safety laws etc. have a major importance for sustaining and growing the market share. It is vital to protect consumer data from fraudulent practices, any unlawful practice which breaches any law. Consumer’s privacy and security concerns need to be taken care of by this brand. Advertisement and marketing of products should be legally bound without any wrong claims for consumers. For e.g. Its competitive brand had to change its name because of racist and discriminatory ads for the target market. There are laws which keep an eye on the price, quality and the prohibited ingredients used in making cosmetic products. Even the employees should be ethically and legally respected keeping in mind their health and the work environment safety. The patents, intellectual property rights and regulations in a country are very important for any brand like Clinique. It protects its valuable ideas and inventions in the cosmetics industry and gives it a competitive advantage over other market players.
In the Clinique PESTLE Analysis, the environmental elements affecting its business are as below:
Some of the major environmental factors which Clinique should consider during the strategy planning process are waste management, recycling and renewable technologies etc. This brand should consider the circular economy for its business operations to stand as the best among the rest in the industry. With the help of recycling, remanufacturing and the efficient waste management system, this brand can have a sustainable competitive edge over other competitors in the industry. All countries are focusing on reducing their carbon footprint and the emissions polluting the environment. Many companies are working in this direction which is mandated by law and proves to be beneficial for the business in the long term. Customers are becoming more aware and their attitude and demand towards environment friendly products is increasing.
This is important for this company to take this an opportunity and adapt itself to the green business practices. Scare raw materials used in the manufacturing of products should be used responsibly. All these factors make Clinique stand apart and undercut the market share of its competitors.
To conclude, the above Clinique 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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