PESTEL ANALYSIS OF REEBOK (UK)

PESTEL ANALYSIS OF REEBOK (UK)

Political factors – The political factors have affected the Reebok company positively. This is because the UK government has introduced many reforms that have helped in the development of the business of the company (Väyrynen 2019). Due to such a favourable condition, the company has been successful in introducing its products in its home country (Song et al. 2018). The company has also been able to expand its market in outside countries, which has removed the unemployment condition of the economy. It has also earned higher revenues for the economy through import or export activities.

Economic factors – The GDP growth of the brand has been 7.3% every year due to its vast profit and popularity among customers (KC 2017). The strong policies of the brand have lessened the inflation rate of the brand. The financial markets are pressurised by fiscal deficit and high trade activities (Turkyilmaz et al. 2019). Due to the emergence of Reebok, the condition of the middle-class society improved. This led to an increase in the sale of branded sports products.

Social factors – The positive social factors affecting the company are the lifestyle structures of the young generation and their daily habits (Lacovidou et al. 2017). Most of the teenagers participate in different games and require suitable sports apparels, including shoes (MacKay and Stoyanova 2017).  As a result of these activities, the brand has gained massive popularity among the young generation.

Environmental Factors- The Company has made substantial efforts towards curbing the adverse effects of the environment through its products (Gegg and Wells 2017). The company ensures that there is a prevalence of the fair, safe and healthy condition in its factory (Singh and Negi 2018). The company also abides by the environmental regulations and principles set up by the authorities of the UK.

Legal Factors – Legal factors have negatively affected the company as it is required to pay taxes to the government of the UK (Katamba et al. 2016).The company should also meet the labour wages as stipulated in the regulations of the country (Harvey 2018).  Reebok follows the local policies and ensures the safe and quick supply of its products such that it can earn the right amount of profit.

COMPETITIVE ANALYSIS

The top competitors of Reebok Company are Nike, Fila, New Balance and Puma.

1. a) Nike has been a popular name in the sports apparel industry (Chen 2017).  Nike manufactures and sells quality products to the sportspeople playing soccer, basketball and many other popular games.
2. b) Fila offers a wide variety of products in the sports sector and have given Reebok a significant competition in the market (Nixon 2019). Unlike Reebok, Fila is mainly specialised in manufacturing running and training shoes of the sportspersons.
3. c) New Balance has established footwear products of premium quality, especially in the markets of the UK and USA (Singh 2018). New Balance has given a fierce competition to Reebok by enhancing its sponsorship through basketball competitions, Olympics, cricket tournaments and many other sports activities.
4. d) Puma is engaged in developing sports apparel for different kinds of sports such as motorsports, men’s golf tournament and others (Valera Gil 2016). The pricing and product strategy of the company has given a tough challenge to Reebok.

TARGET MARKET

The target group of Reebok is divided into three segments, that is, income, age group and gender. Considering the section of income, the company primarily targets middle-class as well as wealthy class people. Accordingly, it offers the products of the medium price range. For the affluent class people, the company offers premium products of high quality and class. The company targets the age group from 3 to 7 years and 7-12 years (Datta and Sanyal 2016). These sports apparels are specially manufactured for kids belonging to this age group. Other garments are created for the adult segment belonging to the age group of 21 years to 25 years. The gender segment consists of both men and women.

DISTRIBUTION CHANNEL

The distribution channel of the company is massive, consisting of 100 independent chains in a single country. Along with this, the company has a retail presence at over 2500 brand stores. The brand is currently undergoing growth and development by increasing its number of stores each week (David 2017).  The company has an ambitious plan of opening one store at an interval of three days. The company also functions in different online stores through an organised web system, which is responsible for the distribution of products. Reebok has merged with various online stores to sell its products effectively.

RECOMMENDATIONS

Some of the strategic guidance for Reebok can be summarised below.

1) Betterment of the customer services for catering to their needs perfectly.

2) Improvement of the retails presence of the brand in both physical as well as online stores.

3) Building up of cooperative relationships with the retailers and the suppliers.

4) Focussing on the fashion and function of the products (Veldekens 2016).

5) The company should prepare innovative strategies to protect itself from fake imitations.

6) The company has commercialised its products extensively, which has diluted its brand image (Brohi et al. 2016).  The company should focus on developing unique products to compete at the global level.

References

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Datta, S.K. and Sanyal, S.N., 2016. Integrated Marketing Channels. Strategic Marketing Management in Asia: Case Studies and Lessons across Industries, pp.403-424.

David, L.P.F., 2017. Equity Research-Adidas AG (Doctoral dissertation, Instituto Superior de Economia e Gestão).

Gegg, P. and Wells, V., 2017. UK macro-algae biofuels: a strategic management review and future research agenda. Journal of Marine Science and Engineering, 5(3), p.32.

Harvey, M., 2018. Competition as instituted economic process. In Market relations and the competitive process. Manchester University Press.

Iacovidou, E., Busch, J., Hahladakis, J.N., Baxter, H., Ng, K.S. and Herbert, B.M., 2017. A parameter selection framework for sustainability assessment. Sustainability, 9(9), p.1497.

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Turkyilmaz, A., Guney, M., Karaca, F., Bagdatkyzy, Z., Sandybayeva, A. and Sirenova, G., 2019. A Comprehensive Construction and Demolition Waste Management Model using PESTEL and 3R for Construction Companies Operating in Central Asia. Sustainability, 11(6), p.1593.

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