POLITICAL
Date: 2015-10-07; view: 479.
PEST Analysis
Macro Environment
Political
• The CEO Diego Della Valle is an important public person, who has stated to become a future candidate (risk of impact on the brand);
• Increase in corporate taxation in Italy, due to the financial crisis;
• Huge availability of workforce in Italy (the place where the main factories and the productive processes are located), due to the financial crisis.
Economical
• Zero economic growth in Europe, which represents more then half of sales;
• Low interest rates in Italy (opportunity for investments);
• Euro depreciation versus dollar.
Social
• Negative population growth rate in Italy, which represents 33% of sales;
• New European trend of “confortable elegance”.
Technological
• The growth in use of social networks could obligate companies operating in the luxury industry to change their way to do communication.
PRIMARY ESTIMATION
| Factors | Explanation | Opportunity/Threat |
| Possibility of a future political activity of the CEO. | The TOD's CEO Della Valle stated his interest to set up a new political party. | Threat of a negative impact on sales, in the case of a confirmation of his statement. |
| Because of several recent phenomena of corruption, Italian politicians have a very bad reputation. In consideration of the fact Italian market represents nearly the 30% of the total sales of the Tod's group, in case Diego Della Valle become member of the govern, there will be a risk of a negative impact on the brand in Italy. | ||
| Middle East instability. | The recent phenomena of terrorist group activities (ISIS) in the Middle East are creating a deep political instability in the North Africa and Middle East Area. | Threat of a negative impact on sales in the Middle East Area, and concern on companies operations in those regions. |
| In the last year the North Africa and the Middle East Area are characterised by a deep instability, due to the fighting activities of a terrorist group (ISIS), which is spreading itself on the all Mediterranean area. The consequences of those actions consist of an increasing in concerns about companies operations in that area (Tod's is present in that area with his direct operating shops). | ||
| Transatlantic Trade and Investment Partnership. | Since the last year, Europe and the United States are negotiating an agreement for free-trade between the two areas. | Opportunity of better conditions in import of raw materials (Tod's acquires in part leather from U.S.), and export of goods. |
| The Transatlantic Trade and Investment Partnership (TTIP) is a comprehensive free trade and investment treaty currently being negotiated between the European Union and the USA. The main goal of TTIP is to remove regulatory barriers, which restrict the potential profits to be made by transnational corporations on both sides of the Atlantic. | ||
| Russia embargo. | International community adopted a measure that limits trade and commerce versus the Russia. | Threat of a negative impact on sales, in the case of a prolongation of this embargo. |
| Due to the military activities of Russian forces on the south and east of Ukraine, the International community has adopted strong measures limiting trade activities from and to Russia. In consideration to the fact that Russia area represents an interesting market for Tod's (especially in the shoes segment), the maintenance of the embargo could stress the company results. | ||
| Political Instability in Ukraine. | The war in the south and in the East of Ukraine is fuelling an economic crisis in the country. | Threat of a negative impact on sales, in the case of the launch of the Tod's products in the Ukraine market. |
| Due to the military activities of Russian forces on the south and east of Ukraine, the 2007-2008 effects of the global financial crisis have augmented. As a consequence, the purchase power of the potential customers has decreased. |
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