Executive Summary
ASOS is a globally renowned online clothing company. It offers fashion and beauty products often worn by celebrities and public figures. As such, many people feel encouraged to try their products. Additionally, their product prices are lower than those of high street fashion. In the past few decades, ASOS has enjoyed significant growth in its market of operation, and as such, its sustainability is of utmost importance. Online shoppers differ from traditional shoppers in their preferences and behaviours. Therefore, it is inevitable for ASOS to conduct a regular external analysis of its market environment. This research mainly focuses on the external market environment, including threats, opportunities, weaknesses, and the political, legal, and economic environments. Since the company mainly focuses on online shopping, technological advancements need regular implementation to ensure a competitive edge over other rival companies offering the same services.
Introduction
The ASOS Company is a British online beauty and fashion galore that was launched in 2000. It offers over 750 fashion and beauty product brands like womenswear, menswear, accessories, and jewelry online, in addition to selling over 75,000 own branded products online and through mobile applications (Izquierdo et al., 2016, p.500).
Management and Ownership
Asos.com is a public limitedcompanys. This means that shareholders own it, and the shares are made available to the public for purchase. The shares are traded on the alternative investment market (AIM), which includes the London Stock Exchange (Cheung, 2015). As a member of the AIM, the company does not need to comply with the strict rules set by the London Stock Exchange market. Also, the company does not need to meet the size threshold regarding market capitalisation and the shares aspect.
As a limited company, the company holds a memorandum of association and the articles of association. The firm’s board has two non-executive directors and three executive directors. The non-executive directors are not permanent members of the board an only summoned when meetings are convened.
Importance of PESTLE and SWOT
These models are analysed in the preliminary stage of a business and mainly carried out to gain a competitive advantage over other opponent companies (Zalengera et al., 2014, p. 340). The strengths and weaknesses of a company are found out through the SWOT analysis. Also, analysis of the threats and opportunities that may affect the organisation is done under this framework.
The models provide a clear annual report of the data in a certain year (Johnston, 2016). This helps in finding out the emerging threats and opportunities, technological advancements, and economic changes in a certain market or period.
SWOT analysis
Strengths
ASOS’s products have unique features and are inclusive of both males and females. It also offers free delivery services.
Weaknesses
The products are advertised online. Thu, customers do not have the chance to try the clothes before buying them (Johnston, 2016). Also, the business does not do marketing platform advertisements. The free delivery service costs ASOS millions of pounds annually.
Opportunities
Unique products attract more customers; this poses an advantage to the divers and exclusive product features of ASOS. Additionally, customers continue to make purchases from online platforms through phones and other handheld devices (Bolt & Vazquez, 2015).
Threats
Uncertain economic periods can translate to reduced purchases from customers since they become more careful with spending their income. Also, more customers prefer interacting with the salesperson and the products while in the store.
PESTEL analysis
Political
The political party holding power in the government could alter the VAT on products sold by ASOS, thereby increasing commodity prices. Thus, ASOS needs to consider this to keep its commodity prices at reasonable levels (Fozer et al., 2017)
Economical
Recently, the UK government put in place strategies to remove grants meant for student maintenance. Consequently, university students now find themselves with limited funds to spend on such luxuries as fashion brands. This could hurt ASOS’s sales.
Technological/ social
In 2016, about 65% of people above 50 years old bought online products, compared to 30% in 2011. This shows that people above 50 years are increasingly embracing technology. Therefore, ASOS needs to find ways to advance its technology to accommodate older customers (Johnston, 2016). Online shopping is increasingly gaining popularity among customers of various age groups; for ASOS, this is an opportunity that the company can exploit to benefit from increased sales.
Environmental
The company involves online shopping; customers place orders, which are transported to their specific locations. Thus, ASOS should be careful of its carbon footprint since fumes from the cars cause air pollution (Atighechian et al., 2016, p 307). To prevent this, the company should consider having a pop-up ‘click and collect’ shop to help in lowering its carbon issue.
Legal
After the introduction of the Consumer Rights Act on 1st October 2015, businesses were required to do regular updates of their returns and terms and conditions. Also, all staff were required to have complete knowledge of these new regulations to enable them to operate in the new business environment.
Conclusion
A company must conduct regular analysis of its external environment for the purposes of staying ahead of the new changes around the business. Additionally, these factors help a company in its strategic preparation for future investments and in following the strict rules and regulations set by the government. Therefore, since ASOS.com Company is mainly based on an online platform, the company requires conducting regular technological changes surrounding the market environment to maintain a competitive edge.
References
Atighechian, G., Maleki, M., Aryankhesal, A., and Jahangiri, K., 2016. Are Macro and Micro Environments Affecting the management of freshwater sources? A Case of Iran with PESTLE Analysis. Material socio-media, 28(4), p. 307.
Bolt, J. and Vazquez, D., 2015. An exploratory study to understand online consumers' experiential responses towards fashion visual content. Academy of Marketing 2015: The Magic in Marketing.
Cheung, J., 2015. Exploring consumers' experiential responses and shopping intentions toward visual user-generated content in online shopping environments (Doctoral dissertation, University of Manchester).
Fozer, D., Sziraky, F.Z., Racz, L., Nagy, T., Tarjani, A.J., Toth, A.J., Haaz, E., Benko, T. and Massey, P., 2017. Life cycle, PESTLa, n, Multi-Criteria Decision Analysis of CCS process alternatives. Journal of Cleaner Production, 147, pp.75-85.
Izquierdo, A., Labajo, V., Jiménez-Zarco, A.I. and Martínez-Ruiz, M.P., 2016. Online Distribution Strategies: A Mix of Globalization and Diversification in the Fashion Market. In Handbook of Research on Strategic Retailing of Private Label Products in a Recovering Economy (pp. 491-512). IGI Global.
Johnston, C., 2016. ASOS-P-E-S-T-L-E analysis.
Zalengera, C., Blanchard, R.E., Eames, P.C., Juma, A.M., Chitawo, M.L., ad, Gondwe, K.T., 2014. Overview of the Malawi energy situation and A PESTLE analysis for the sustainable development of renewable energy. Renewable and Sustainable Energy Reviews, 38, pp.335-347.
