Levi Strauss PESTLE Analysis
Detailed PESTLE analysis of Levi Strauss examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Levi Strauss is currently present in more than 100 countries. Each has its own different political situation. Growing tensions and instability in the political environment will lead to a decline in growth and limit the opportunities for Levi Strauss. It is pertinent for Levi's to regularly study the current political trends in every country they are present in, as a change in powers may alter the government's priorities towards the development of different industries. In countries where corruption is high and law enforcement is weak, it will make the business environment unpredictable and weak. If the brand decides to enter into markets with a corrupt economic, political system, it will not be sustainable for the company as it will destabilize the society, harming the justice system and endangering the rule of law. Taxation also plays a very important role in choosing a region, Levi Strauss should maintain and expand in markets with low taxation so that they can earn high profits and can invest more in R&D.
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This concludes the political factors in the Levi Strauss PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Levi Strauss:
The economic status of a country plays a vital role in the growth of an organization. A growing economy does offer a lot of growth opportunities for Levi's, whereas, entering into a developed economy where the market is saturated will be difficult and it's not considered a good option.
Moreover, the infrastructure that the host country’s government has built is also very crucial for the growth of Levi Strauss. The demand and supply of the labor force determine the cost of skilled labor. Levi's should study the labor market conditions to understand how it can attain skilled workers at a relatively cheaper cost. For instance, a country like Bangladesh where the labor force is skilled and very productive would be a good market considering this economical factor. In countries, where GDP growth or per capita income is high, consumers will be able to spend more on offered products. Other factors are interest rates and exchange rates, while high-interest rates encourage more investment in that particular country on the other hand exchanges rate will determine Levis' international trade and profitability in that market.
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Social Factors:
Following are the social factors impacting Levi Strauss PESTLE Analysis:
Changing demographic patterns like an increasing number of young population, migration socio-economic status, etc. are paramount for Levi Strauss. Studying these factors will help in determining the right market segment for Levi's. Studying gender roles is equally important for the company so that they can align their marketing and HR strategies. The consumer’s spending pattern is impacted by their purchasing power, Levi's clothing being a status symbol in some markets while it is seen as a functional aspect. It is important for for the company to study these consumer behaviors and social trends so that they can leverage their marketing strategies to the best of their potential. The brand should also focus on making local teams in order to develop local partnerships in order to understand societal norms.
Technological Factors:
The technological factors in the PESTLE Analysis of Levi Strauss are mentioned below:
The ever-developing technology has led towards the adoption of innovative strategies to reach out to customers. Levi Strauss should focus on social media marketing because almost half of the world has access to social media and this can be leveraged to improve business performance and technological trends can be used to design social media strategies to create and expand online communities. Technology such as 5G should be carefully followed by Levi's because it will improve user experience, speed, and access. Entering into markets where technology advancement hasn’t reached will give an added advantage to Levis and they can increase their market share by introducing new technologies to that region.
Disruption in technology has shortened the product cycle, new products are developed quickly and it puts pressure on the brand to develop product quickly and diverse their range of product to keep up with their competition in different regions.
Legal Factors:
Following are the legal factors in the Levi Strauss PESTLE Analysis:
Providing a safe work environment for workforce is very ethical and more importantly obligatory for Levi Strauss, they should also make sure of employee health and safety measures, some countries have very strict laws related to labors. Similarly, Levi's must make sure of implementing anti discriminatory measures in every work place. Apart from these important laws the company will have to implement strong data protection laws. They need to study data protection laws to protect customer’s data. There are certain more laws like setting of maximum price, maintaining certain quantum of quality that can protect customers from fraudulent acts. Inability to protect intellectual property rights can result in losing advantage over competition, which may weaken the positioning of the brand. against other market players.
Environmental Factors:
In the Levi Strauss PESTLE Analysis, the environmental elements affecting its business are as below:
Renewable energy is the need of the arc and it is our future, so many countries are offering subsidies for encouraging investment in renewable energy. Levi Strauss can invest in it because it will offer a long-term sustainability. People are becoming conscious about using products that are harmful for the environment. Levi's can take it as an opportunity to adopt green/eco-friendly means for producing its products. Changing weather condition and climate can also influence efficiency of business, extreme weather conditions will directly affect productivity which in turn will impact supply chain and, in such situation, The brand will have to revisit their production and marketing strategies.
The company must make sure they comply with every country’s regulation regarding use of natural resources. Such acts easily draw attention of media, environmentalists and all the consumers. Exploiting resources is seen as a very heinous act and will leave a very bad impression, and such news spread across borders in no time.
To conclude, the above Levi Strauss 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.
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