Market environment analysis Assignment Example | Topics and Well Written Essays - 1500 words

Market environment analysis - Assignment Example The influence of environmental factor and its effect on any company can be better analysed by PEST analysis which is covering 4 important environmental factors namely political, social, economic and technological. Political Factors: An overview of its investment patterns will suggest that Topshop has constantly chosen to invest in countries that have a capitalist form of government. The capitalist government helps them to use labor, capital and fund more easily with less restriction. This is the reason why Topshop has invested mainly in Europe which is governed by capitalist systems.Recently after the change in the government policies in different countries, Topshop stated to operate in other parts of the world like USA and China. In USA, the company is looking to start its operation in 2014 only with their first store in Springfield Town Centre. (Bhattarai, 2014) Economic Factors: Amongst the economic considerations, the most vital factor is inflation. In case of high rates of inflation and resulting increase in money supply in the economy, the prices will rise. Then the people will not be able to afford the fashionable clothes and accessories offered by Topshop. Other economic factors that must be considered by the company before investing in any country are the balance of payment situation, fiscal and monetary policies, and the counter-trade policy of that country.Low labour cost, availability of raw materials with lower price, are also important aspects before setting up new outlets and considering these factors Topshop therefore now considering the developing nations(Like India, China) to setup there manufacturing unit to increase profit margin by reducing manufacturing cost.(Kaye, 2011) Social Factors: The social factors prevalent in the target market can have a major impact on the performance of a company. The social factors include the social systems, family backgrounds, education, religion, occupation and income levels of