Boohoo Company PESTEL Analysis Essay

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Boohoo Company PESTEL Analysis
Boohoo Company PESTEL Analysis Essay
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Updated: Jul 5th, 2022

Economic Analysis
Social Factors

Environment Factors

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Boohoo is an online fashion retailer dealing in trendy apparel and targeting customers of all ages (, 2021, para. 1). Despite COVID-19 challenges, the company can grow by analyzing prevailing political, economic, social, technological, legal, and environmental (PESTEL) factors affecting the apparel industry.

Political Factors
Being a key player in the European market, Boohoo must be aware of the current government, economic systems, labor dynamics, inflation, and interest rates in countries where it wishes to expand its operations. Europe exports over 30% of clothing and textile to other parts of the world (European Textile and Clothing Sector consolidates satisfactory evolution in 2018, 2019). During the COVID-19 pandemic, most governments have placed strict regulations on international business engagements with different restrictions imposed. However, the movement of goods has not been limited, which gives Boohoo a vital market opportunity (Kleinman, 2021, para. 5).

Boohoo can take this advantage by increasing its export volumes to countries where it did not do business initially. Boohoo can look at countries with attractive foreign tax, trading, and pricing incentives during the pandemic and try to establish its market niche.

Economic Analysis
The COVID-19 pandemic has significantly affected the interest, saving, and inflation rates globally. Reinsdof (2020) of the International Monetary Fund notes that in the wake of COVID-19, the consumer price index for clothing was recorded at -0.03 percent in 2020. Consequently, various governments have restructured the apparel and transport industry, reducing taxation and opening investors opportunities to boost the industries.

This is an opportunity for Boohoo as it does not require much capital to set up its online presence in such countries. As reported by Redcowmedia (2021) Boohoo has recorded a 26% increase in orders through social media marketing in France and another 17% increase in social media traffic in the US. These statistics suggest that the company has excellent potential to venture into new markets. Besides, the company may seek to establish new production lines in fast-developing countries, which can be realized by analyzing prevailing interest and employment rates.

Social Factors
Despite the COVID-19 pandemic, people are still concerned about their dressing trends. Ideally, the significant increase in social media during the pandemic for interaction provides online retail companies such as Boohoo with marketing opportunities. The company has already seen its sales grow significantly compared to its competitors through its #BoohooInTheHouse marketing campaign during the pandemic (Sentance, 2020, para. 5). Using its experience in the social media market, the company can venture into new markets globally. It can invest in swift shipping strategies to have a head start even after the pandemic is over.

Technology Factors
During the pandemic, the apparel industry has faced economic challenges, with the use of technology being a critical factor in reducing the impact. Boohoo can leverage this factor by having a proper industry analysis of the emerging technologies in the industry ( 2021). For instance, the company can market its brand globally through social media while paying attention to the legal implications of the pandemic.

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Environment Factors
Environmental concern is another challenge facing global companies. In the apparel industry, the primary aspect is the use of non-biodegradable materials. Consequently, this has a significant effect on the duty, import, and export tax rates of such products (Textile and garment supply chains in times of COVID-19: challenges for developing countries, 2020). Therefore, Boohoo can take advantage of this factor by investing in environmentally friendly strategies such as planting more trees as a corporate social responsibility. Ideally, this will improve the companys brand image to potential consumers.

Legal Factors
In the legal realm, the company should be aware of prevailing legal implications in the apparel industry related to COVID-19. The two vital legal factors are health and safety law and employment law (Reinsdof, 2020, para 5). In its quest to expand to new markets, Boohoo should critically analyze the existing health safety laws in the new markets. To show its commitment to such regulations, the company can participate in community awareness campaigns. Regarding the employment law, the company can leverage its economies of scale to provide flexible working terms for its employees. It can be having several work shifts to maintain social distancing and other safety measures.

In summary, Boohoo has a significant market opportunity in the apparel industry globally during the COVID-19 pandemic. Through an innovative analysis of existing political, economic, social, legal, and technological factors, the company can expand its market base in the UK and globally.

Reference List
European Textile and Clothing Sector consolidates satisfactory evolution in 2018 (2019). Web.

Kleinman, M. (2021) Boohoo renews high street raid to complete Arcadia break-up. Web.

Textile and garment supply chains in times of COVID-19: challenges for developing countries (2020). Web.

Reinsdof, M. (2020) Data Disruption: The Impact of COVID-19 on Inflation Measurement. Web.

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Sentance, R. (2020) How Boohoos content has fuelled success in the midst of a pandemic. Web.

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Reading time 3 min
Type Essay
Pages 2
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Subjects Business Company Analysis
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