Lecturer: Keith SeedWord Count Including appendix one:
AbstractOn the 4th of February 2010 the BBC reported that borders-based Pringle of Scotland has recorded losses in excess of £9m for the third year running. Considering Pringles rich heritage in knitwear and a well-documented history of supplying some of the most luxurious clothing item available since the 1800’s, these figures beg the question ‘where has Pringle gone wrong, and what seems to be the problem?’. Devising from the PESTLE, Porter Five Forces and VRIN models, an analysis model is developed. This model indicates the current issues and challenges Pringle faces. Suggestions were then formulated based on the analysis model and other reference to relevant case studies and academia relating to Pringle. During this report the PESTLE analysis unearthed some interesting findings which shows fluctuations in the exchange rate due to crashing currency around the globe could create a financial problem in terms of PoS’s import and export premiums. This report finds that these factors as well as the well documented rise in the price of cotton (independent.co.uk) and other ‘luxury’ materials has the potential to impact sales if PoS were forced into spreading the cost of this through their products and onto their customers to a level which was deemed unacceptable by its consumers. A report by Mintel,2011 indicates that unemployment figures have dramatically risen as a result of the 2007 economic recession and reports that 51% of consumers are spending less on the purchasing of clothes. This huge drop in % in spending creates a hostile environment for PoS and increases the difficulty for luxury brands as a whole to operate in. This report analysis Pringles past as well as its present it terms of strategies and issues the organisation faces. Furthermore it provides analysis on its findings suggesting options Pringle could implement to combat the issues covered. An example being a strategy to create a new more affordable line, that remains classed as ‘luxurious’, thus just adjusting to the reduction in lower disposable incomes which sees customers being more inclined to spend less on high end, pricier brands but instead settle for cheaper imitated designs found on websites like dropshop.com or eBay. a breadth of additional analysis is recorded as well as several suggestions for organisational improvement within the political, economic, social, technological and legal environments it operates within. Introduction
For this assignment I will be conducting a position analysis on Pringle of Scotland. I will be using a series of academic models which include, PESTLE, Porters Five Forces, Vrin as well as other credible and relevant material. Using this analysis my aim is to then critically assess the current issues and challenges Pringle of Scotland face today and create a range suggestions as to how the company may address these issues in order to achieve a higher profitability potential and to become a more efficient operation overall. Present Pringle analysis using PESTLE
It is important for Pringle of Scotland (PoS) to establish the macro-environment factors which have an impact on the industry in which it operates, in PoS’s case the textile industry. PESTLE as a framework is clearly depicted by JSW core text, 9th edition and assists in determining the important areas which need to be considered when undertaking strategic planning. Diagram 1.1 found in Appendix 1 identifies such areas for consideration. Areas most notably identified by PESTLE include the current weakened state of the economy, more specifically fluctuations in the exchange rate. The UK has seen the pound crash as a result of the 2007 recession and this in turn may have an impact of future sales for Pringle if the company is forced to spread its costs through their products onto their consumers. Albeit it...