SWOT analysis of a company is important, it helps to knows environmental surrounding of an organization from internal and external point of view. It analysis the all types of situation in an organization like Strength, weakness, Opportunities and threats.
It helps an organization its internal strength and weaknesses to improve it in profitable way and it also evaluate the opportunities and threats in the market which we can be aware of. According to Jeyrak et al., (2012) SWOT analysis as part of the strategic planning process to identify strengths, weaknesses, opportunities and threats before proceeding to the formulation of a strategic planning.
It can also be defined as a key success factors which belong to highest ranked set of technique of strategic analysis used by an organization. As Kotler et a., (2008) has explains SWOT analysis method it is an extract of the findings of both external and internal audits which pat attention to organization’s strengths and weaknesses as well as the opportunities and threats facing the company. According to Hassan and Hassan (2014) SWOT analysis is important because it is a systematic techniques to understand the performance issues and identify the external and internal factors.
According to Hassan and Hassan (2014) TOWS matrix is method to analyze the external environment which are threats and opportunities, and the internal environment which are weaknesses and strengths in order to influence to the decision makers in an organizations. Although the TOWS matrix can be used identify relationships, it can become a complex process when many factors are involved (Weihrich, 1993)According to Kotler (1998) PEST analysis is the strategic tool to evaluate business position, market growth and direction of operating. It is useful for analyzing strategic planning and product development stages. PEST analysis can be useful in identifying of the environmental where the company operate and provide data information that will enables the company to identify future difficulties. Porter (1985) also mention that the P.E.S.
T. also ensures that company’s performance is aligned positively with the powerful forces of change that are affecting business environment. PEST analysis of the company can be defines in four factors; Political, economic, social and technological factors.
However the economic factors are influenced by political terms and conditions where government policies and decisions are major factor influencing affecting economical factors. Social factors varies from the general changes in fashion and disposal income. The company should be aware of demographic changes which includes population, gender, age etc. which can have an important role on demand for product. industry still have no negative effects in comparing to other business. According to (OECD, 2013) there are more money left for consumers to purchase clothes, which may increase the total sales of fashion companies.
In the course of this trend, there might be less people able to buy fashion clothes due to the unemployment, but those who are employed can spend more money on the products due to the higher disposable income as mentioned in (European Commission, 2013). Social factors; fashion industry is one of the industry which may be affected by the impact of social factors. Highly growing population in UK may lead a socio- cultures factors a big changes in fashion industry.
It may direct influence to the business plan of the company. However rapidly growing Socio-culture may create an opportunities open up new fashion retailer. As mentioned by Cachon and Swinney (2011) moreover the increasing demand for convenient shopping, especially in times when people become more career-seeking and have less time left that can be dedicated for leisure and