PESTLE Environmental and Legal (Contributor, 2011).The political factors

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PESTLE analysis is used to examine the macro-environment the company exists in. It is a helpful tool used to understand the market growth or decline, current position of the organisation and more. In addition, it is used to evaluate certain factors that the company operates in such as: political Economic, Social, Technological, Environmental and Legal (Contributor, 2011).The political factors include government regulations and laws such as employment laws and tax policy. Economic factors affect the purchasing power of a company since it plays a vital role when a company decides their financial decisions, in particular and also affects the cost capital. These factors include interest rates, economic growth as well as inflation. Social factors affect customer’s needs, population growth, potential market size such as John Lewis’s goods, fashion and age demographics. Technological factors include innovation and change of technology and its impact on the company. Environmental factors include the weather and climate change and its impact on certain tasks that require a specific climate in order to be undertaken. Last but not least, legal factors include laws related to discrimination, employment and health and safety, these affect John Lewis in terms of their costs and the demand on their products (Contributor, 2011)PoliticalThe government is thinking of decreasing the corporation tax from 30% to 28%, which will help John Lewis increase sales  and profit as well. Immediately after the brexit vote, political uncertainty lead to a decrease in consumer confidence regarding spending. In the mid-term, goods purchased overseas will become more expensive. This means that the organisation would need to decide whether or not to increase their prices.  However, in the long term considerations for the organisation would be their reliance on any non-UK workers and potential opportunities. An exit from the EU means the UK would be able to follow any tax system anticipated with a higher level of confidence (Impact of Brexit on Retail sector, 2016).EconomicWhen the UK is facing a recession, there will be sensitive to changes regarding the interest rates. Over the two decades globalization has been the main factor in the business life and became a contested debate. Globalization results in increased competition. Competition includes products and services offered, cost and price, target market and more. Also, competition against other sectors of the retail has resulted in retails giving many incentives to customers, which would influence John Lewis since their prices have to be lowered most of the time and ensure they meet their customers expectations to keep up the sales and profit (How globalization affects business | Bookboon Blog, 2011).Socio-culturalConsumer’s preferences, taste and lifestyle is changing into a new market created by them due to the society being more materialistic. Therefore, John Lewis should consider introducing more high end brands and the latest fashion items to ensure they please their customers (Neville, 2013).TechnologicalFor retail industries such as John Lewis, internet shopping is very common, it directly influences the sales approach. The organisation is continuously carrying out IT systems, which are accessed via secure servers. As a result, this will make customers browse more comfortably, leading to higher sales and profit.EnvironmentalThe renewable source of supplies that are used in production, mainly cotton and wool are both environmentally friendly. Threats are to do with legal penalty for livestock’s in terms of health and safety. Western companies have put a lot of emphasis on the role of big companies in reducing carbon footprint and increasing energy efficiency (Bream 2008). Almost every firm will have to prove they are reducing impact on the environment and when this is done, it will create customer loyalty and improve the company’s reputation.LegalNational legislation become stricter regarding health and safety to do with consumer rights and production of renewable sources used to make the clothing

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