PESTLE Analysis For Country Road

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In order to gain a core competence, an external analysis is necessary. This section is a simple PESTLE analysis for Country Road. Political factors: Australia has a transparent and efficient government and legal framework. The judicial and law enforcement system play an important role in keeping low level corruption and high degree of business certainty. All these factors contribute to build a stable and open political environment in Australian economy and enable various companies to be founded and developed in the market. Economic factors: Australia’s economic growth rates are stable and higher than most OECD countries. According to the data from World Bank, the GDP growth rate in Australia in 2012 was 3.73%, which was higher than that In…show more content…
There are three main social classes: the working class, the middle class and the upper class. Among these classes, the middle class occupies the largest percentage in Australia’s society. Australia is a multi-cultural society as well. People with different culture and beliefs have different choices on their consumption. Therefore, the type of target consumers is a significant factor that Country Road needs to consider. Technological factors: The technological aspect of the fashion industry is relatively mature. As a result, the barriers to entry in this industry is low. Furthermore, the machinery is keeping developing so that the productivity and quality are becoming higher with a lower costs. Besides the development in the manufacture aspect, the rapid expansion of online shopping has an impact on fashion industry. More and more people prefer to shop online rather than in physical store. Therefore, these factors are not only bringing opportunities but also…show more content…
The Australian lifestyle spread out over the world through famous Australian films like Crocodile Dundee and artists like Ken Done. Country Road has created a brand image of Australian way of life which brings it a core competence to enter into other countries’ market (Kerr & Sarina 2006). Secondly, trade policies have impacts on the international expansion strategy. The Free Trade Agreement reduces the barriers to entry in a new market. However, it also intensifies the competition in the domestic market. Low tariff rate in other countries like New Zealand (1.38% in 2013) is another attractive factor that leads Country Road to expand its business. The third aspect that influence Country Road’s international strategy is the intense competition in the fashion market in Australia. As the entry threshold is lower, competition become intense especially in the mid to upper tier of the fashion retail sector. Country Road not only has to compete with local brands, but also face the threats from foreign competitors like Zara and online retailers like ASOS. Expansion in new market can be regarded as a defense of its total market share. The last but not least, cost plays an important role in the international expansion strategy. Material and labor costs are gradually increasing in recent years. For example, according to the 2005 Annual Report, the revenue from sale of goods increased 8.26% while the
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