Speedo Company Case Analysis
Running Head: Speedo Company Case Analysis
Speedo Company Case Analysis Name
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Speedo Swimwear Manufacturing Industry: PESTLE /Context Analysis
Political Factors
Political factors affect the way business entities conduct their activities. Government decisions influences daily business operations and can come in the form of legislation or policy. For the Australia, the government is run under democracy. Australia is a capitalist state and a free-oriented economy thus business firms and corporations are free to make the vast majority of economic decisions. Australian government plays a minimal role in the domestic economy. Consequently, the country has relatively smaller social safety net, and thus corporations face considerably less rules and regulations (Pearce, & Robinson, 2005)
Employee rights in Australia have substantially influenced businesses. With Speed Manufacturing Industry being labor-intensive, employees and labor laws have significant effect. Australian government has established laws that govern employees’ minimum wage, benefits and over time. It has also well established health and safety regulations. In 1984, the Australian government introduced Medicare health care system which stipulates that all residents should access high quality health care. Speedo Swimwear manufacturers have to conform to this regulation through provision of health care needs to its employees (Australian Government, 2010).
Economic Factors
Currently, Australia has the strongest economic growth than other countries such as US and United Kingdom. Australia’s current GDP is higher than that of Germany, France and United Kingdom. The country’s economy is characterized low degree of risk. The economy boasts stable interest rates, relatively high level of employment, and consistent strong GDP and low rates of inflation. According to.., the Australian main cities are characterized by relatively low employment rates. Nationally, the average unemployment figures stands at around 5%, a clear indicator of strong economy. The country presents vast number of economic opportunities which Speedo can capitalize. There are high chances that the company is likely to achieve high growth (Pearce, & Robinson, 2005)
Social Factors
These include demographic aspects (race, gender, family size, age etc), population shifts, lifestyle changes, fads, education trends, living standards, fashion, health, diversity, leisure activities, occupations and earning capacity of populace among others. The social factors encapsulate demand and tastes. Australian people value fashion hence business firms which constantly produce a more unique product are likely to prosper. Demand and tastes of consumers vary with disposable income which can in turn provide both opportunities and threats. As stated earlier, most Australian citizens are employed and most of them earn high income. The consumption rate is very high because of high disposable income. This implies that there exists a very good market for products within this economy. The wider market available for Speedo’s products influenced the way it does business.
Demographic changes i.e. the structure of population by age, regions, affluence, numbers working have a significant bearing on demand of particular products and services in the economy. Most of the Speedo’s products are consumed by the younger population. From the demographic statistics of the country, young people form a larger part of population. This presents a good market for company’s products. Most Australian people belong to middle-class thus necessitating business organizations to avail products that are affordable to this class.
Considerably, swimwear is a kind of product that changes from being a novelty to a situation of market saturation. This influence pricing and promotional strategies adopted by the manufacturing firms. Changes in taste and preference influence demand of a product. Similarly, swimwear sells around the Australia with little disparity. This influences the production and distribution pattern of Speedo manufacturing industry.
Technological Factors
Australia’s economic growth is attributed to technological innovations, inventions, new discoveries, research and development. The government widely recognizes the importance of technology in the economy. Over time, it has supported business firms and corporations to adopt more advanced technologies. This is evident by stipulated laws and regulations that affect technological innovations and inventions in the country. Speedo has managed to incorporate technology in its business operations. Consequently, this has lead to advanced manufacturing processes hence quality products and services. The technological change is useful in the creation of competitive advantage. Equally, more advanced technology provides a useful input in the manufacturing process of the Speedo Company, but its purchase calls for substantial funding and extensive training of employees. However, the rapid technological changes in the Australian economy may also prove threat to existing business firms and corporations since of their products are likely to be rendered redundant. Australian government has consistently improved its level of technology in an attempt to provide a more superior transport and communication network in the country. It has been in fore front in reducing technological gaps as evident in other countries of the world. Superior transport and communication network boost manufacturing operations of Speedo Company (Australian Government, 2010).
Legal Factors
The Australian government has well established legal structure which affects emerging and already existing firms and corporations. The government tax system was established specifically to respond to opportunities and challenges that occur due to globalization.
The system has been structured to better attract potential investors in a way that enhances national income. The comprehensive income tax presents a relative merits to manufacturing companies. In the recent past, the country has experienced high influx of great investors. New entrants pose threat of competition to existing firms. The right balance of tax bases and rates in the Australian economy has led to creation of globally competitive business environment. This is useful in attracting investors and international businesses, thereby increasing its national income (Australian Government, 2010).
Customers
Speedo is the world leading manufacturer of swimwear brand. Its products target customers from diverse demographic backgrounds, children, youth and adults, from all parts of the world. The company has designed various strategies since its inception to attract and retain the existing customers. As revealed by the case study, various issues relating to customers, both existing and potential ones can be deduced, in relation to the opportunities and threats faced in the market. The main opportunity that the compo any has always exploited to enhance its customer base is through innovative products development. Specifically, the company has very innovative product designs that are aimed at satisfying customer needs. This way, most of its existing customers recognize the brands and identify with them. Similarly, it is such innovative product development and designs that have made the company to be a market leader and keep off some of its rivals from its niche.
To ensure that the customers are satisfied and their needs are met, the company ensures that specific needs of the clients are fully met. Accordingly, the needs are categorized into ‘speed, comfort and fit’ (Qumer, 2009). For example, the attires are made in away that the wearers can slip into the swimsuit. At the same time, the designs allow for easy movement without accidental slip offs. This way, all the designs are tailor made to meet these unique customer requirements. However, to obtain new market access and enhance its customer reach, and also to reach the potential customers whose needs are not catered for by other players, the company invests in research and development. Through such initiatives, the company ahs been able to understand, appreciate and know the market needs, customers’ behaviors and potential and their changing tastes. As such, a research and development unit has been created to meet such requirements at Aqualab. notable outcomes of research at the Speedo company is the 2004 launch of Fastskin FSIL that based on the computational fluid dynamics and the 2007 launch of Fastskin FS-PRO 21,that was described as one of the best and innovative swimwear in the market , and the 2008 LZR Racer, with the most technologically advanced qualities (Qumer, 2009). The research also targets other players in the market and decision making units apart from the customers such as coaches. Through such elaborate market research processes, the company has been able to design quality products that are widely accepted in the market.
Another business strategy that the company uses to acquire new markets is emphasizing on fashion. Since sports are associated with trendy fashions, customers have found the products to be in line with the prevailing fashions that inspires the swimmers.
Another strategy used by the company to ensure maximum reach to clients in different regions is delegated marketing. The company has its products’ distribution done by Pentland Group that has reliable channels and market expertise. As such, the company has ensured that it has a reputable professionally run distribution channel. This way it has been able to expand its global brand presence and reach new markets while at the same time getting feedback on market needs and dynamics. Promotion is another element of marketing that Speedo uses to reach its customers apart from ads and sponsorships. The use of celebrities and public figures such as Tony Blair and Prince Williams has helped the company to reach more customers and ensure that its products appeal to many people (Qumer, 2009). Sponsorships as a marketing strategy are done in such areas as Olympics and local competitions. This is normally accompanied by and exhibitions such as the UK Trade and Investment forums. Significantly, market analysts describe Speedo as one of the companies that have positively taken competition, to maintain its customers, from the market and designed proactive and objective response that are based on research and technological application in all processes of businesses functions. One brand that should be developed further and made to augment revenue generation and competitiveness is the LZR brand. This is because the brand is strong and is market leader with a bout USD 200 Million performance. It’s also notable that the company has been able to focus on its competitive advantages such as market focus, and product differentiation. This has resulted into its competitors losing the market share to it due to the consumers switch to its products. In fact, some competitors exited the market due to intense and technologically oriented competition. Conclusively, it will be able to design more proactive approaches to products development that are cost effectively and meet the current and future market needs.
References Lists
Australian Government (2010). Business and Industry. Retrieved August 22, 2010, from
HYPERLINK “http://australia.gov.au/topics/business-and-industry” http://australia.gov.au/topics/business-and-industry
Pearce, J. & Robinson, R (2005) Strategic Management. New York: McGraw-Hill
Qumer, S., M. (2009). Speedo: Leading the swimwear Market. ICMR Centre for Management Research, India.
