M RahmanPESTEL analysis of the footwear industry
This is a detailed PESTEL analysis of the footwear industry which draws examples from the UK, the USA, and some other industries. The footwear industry has been around for centuries, with its roots stretching back to ancient Egypt. As one of the largest industries in the world, it employs millions of people and has a market size estimated to be worth over 381.9 billion U.S. dollars (Smith, 2022).
It is essential to understand the factors that affect the global footwear industry and to take these into consideration when making decisions. This can be done through a PESTEL analysis, which stands for political, economic, social, technological, environmental, and legal environments. This article explores these six factors and discusses their impact on the footwear industry.
Political factors affecting the footwear industry
Political factors can have a significant impact on any industry, and the footwear industry is no different. These factors include government regulations, types of government, political climate, taxes, and trade policies.
Government regulations can have a major impact on the footwear industry as they can restrict or prohibit certain activities or products. Likewise, taxes need to be considered as well as they can increase the cost of production and make it difficult for businesses to compete.
Finally, trade policies are also important to consider when looking at the footwear industry. They can affect the cost of imports and exports and can make it difficult for businesses to trade across borders. They can also restrict the types of products that can be imported or exported, making it difficult for businesses to access certain markets.
Economic factors affecting the footwear industry
The economic environment is a key part of discussion in the PESTEL analysis of the footwear industry. Economic factors such as inflation, cost of production, exchange rates, and interest rates can have a significant impact on the global footwear industry.
Inflation is a major factor as it affects the cost of production. As the price of raw materials and labor increases, it can make it more difficult for businesses to remain competitive.
Smith (2022) reports that China, India, Vietnam, Indonesia, Brazil, Turkey, Pakistan, Bangladesh, Mexico, Iran, Philippines, Italy, and Thailand are the leading footwear producing countries in the world. Most of these countries are famous for low-cost production.
Exchange rates can also have an impact on the footwear industry as they can affect the cost of imports and exports. For example, if the value of a foreign currency decreases relative to the US dollar, it can make it more expensive to purchase materials or labor from foreign countries.
Finally, interest rates are also very important as they can affect the cost of borrowing money. Higher interest rates can make it more difficult for businesses to access capital, which can affect their ability to invest in new technologies or expand their operations.
Social factors affecting the footwear industry
Social factors are also important to consider when looking at the footwear industry. These factors include consumer tastes and preferences, demographics, and cultural influences.
Consumer tastes and preferences can have a major impact on the footwear industry as they can determine which products are successful and which ones are not. As their tastes have changed, many footwear products have been replaced with new designs and looks.
Demographics can also have an impact on the global footwear industry as they can determine which types of products are most successful. For example, younger consumers may be more likely to purchase athletic shoes, while older consumers may be more likely to purchase dress shoes.
Tunney (2022) reports that the U.S. footwear sales are expected to go over $103 billion for the first time in history. It turns out that 7.3 pairs of shoes are purchased by every man, woman, and child in the country. This is an example of love for footwear. Indeed, many people around the world are obsessed with shoes.
Many high-end customers love shoes from luxury brands such as Miu Miu, Gucci, Manolo Blahnik, Louis Vuitton, Burberry, Jimmy Choo, Prada, Stuart Weitzman, Alexander McQueen, Walter Setiger, Stuart Weitzman, Brian Atwood. Their gorgeous design, unmatched comfort, and exclusivity are what many people love to associate with.
Nike and Adidas products are popular around the world. These companies target middle-class consumers. On the hand, people with financial limitations often buy products from companies such as Deichmann, Shoezone, Bata, Shopper’s Stop etc.
Finally, cultural influences are also important factors. Different cultures may have different preferences when it comes to footwear, and businesses must take these into consideration when designing and marketing their products.
Technological factors affecting the footwear industry
The technological environment is another important part of discussion in the PESTEL analysis of the footwear industry. Technology is extremely important as it can affect the way shoes are designed and manufactured, as well as how they are marketed and sold.
One of the most significant technological advances for the footwear industry is the development of new materials. New materials can make it easier for businesses to produce lighter, more durable, and more stylish shoes.
Technology can also affect the way products are manufactured. For example, 3D printing technology can make it easier for businesses to produce customised shoes. It can also make it easier for them to produce shoes in small batches, allowing them to experiment with new designs and materials without having to invest in large quantities of inventory.
Finally, technology can also affect the way products are marketed and sold. For example, the internet has made it easier for businesses to reach a wider audience, as well as to create more personalized and engaging marketing campaigns.
Environmental factors affecting the footwear industry
Environmental factors are also important to consider when looking at the footwear industry. These factors include climate change, waste management, and resource management.
Climate change can have a major impact on the footwear industry as it can affect the way products are designed and manufactured. For example, if the climate changes, businesses may need to design shoes that are suited to the new climate. This can involve using different materials or changing the design of the shoes.
Waste management is also important as it can affect the environment. Businesses must ensure that they are disposing of their waste responsibly and in accordance with regulations.
DiNapoli (2022) reports that more than 20 billion shoes are manufactured every year in the world. Every year in the US, people throw away over 300 million pairs of shoes, 95% of which wind up in landfills. This is very challenging for the environment.
Finally, resource management is also important for the global footwear industry. Businesses must ensure that they are using resources responsibly and that they are not over-exploiting them. This can involve using renewable resources or recycling materials.
Legal factors affecting the footwear industry
The legal environment is the last component of the PESTEL analysis of the footwear industry. Legal factors can impact on the global footwear industry significantly. For example, intellectual property laws are very important as they can protect businesses from having their designs and products copied.
Environmental laws can also influence the footwear industry. These laws can help to protect the environment and to ensure that businesses are disposing of their waste responsibly. It is worth mentioning that many footwear companies have been fined by legal authorities for breaching certain rules and regulations.
Summary of PESTEL analysis of the footwear industry
This analysis can help footwear companies identify opportunities and threats in their external environment. It can also help them explore various factors that can affect their operations. By understanding these factors, they can make better decisions and be better prepared for any changes in the industry.
Hope you like the article: ‘PESTEL analysis of the footwear industry’. Please share the article link on social networking sites to support our free academic work. You may also like reading:
PESTEL analysis of the fashion retail industry in the UK
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Last update: 07 February 2023
References:
DiNapoli, T. (2022) Global shoe waste: the environmental impact of footwear, available at: https://www.unsustainablemagazine.com/global-shoe-waste/ (accessed 07 February 2023)
Smith, P. (2022) Value of the global footwear market, available at: https://www.statista.com/forecasts/976367/footwear-market-size-worldwide (accessed 04 February 2023)
Tunney, G. (2022) The shoe industry’s dirty secrets–and how technology will clean it up, available at: https://fortune.com/2022/09/08/shoe-industry-dirty-secrets-technology-environment-greg-tunney/ (accessed 04 February 2023)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
