Old Navy PESTLE Analysis

PESTLE Analysis of Old Navy analyses the brand on its business tactics. Old Navy
PESTLE Analysis examines the various external factors like political, economic,
social, technological (PEST) which impacts its business along with legal &
environmental factors. The PESTLE Analysis highlights the different extrinsic
scenarios which impact the business of the brand.

PESTLE analysis is a framework which is imperative for companies such as Old

Navy, as it helps to understand market dynamics & improve its business
continuously. PESTLE analysis is also referred to as PESTEL analysis.

Let us start the Old Navy PESTLE Analysis:

Political Factors:
The political factors in the Old Navy PESTLE Analysis can be explained as follows:

Old Navy is an American clothing and accessories company owned by gap Inc. with
its headquarters in San Francisco, California, United States. Political factors can play
a significant role in the long-term profitability of the company. This is mainly because
Old Navy has its stores in various locations and hence it has to adapt to the political
environment in all those locations. The political stability in a country determines how
smoothly the industries or the companies operating in that environment would be
able to bloom in the future. The integrity of the politicians and their decision making
could have a great impact on the demand for the industry as well. The existence of
policies for intellectual property protection is also of major concern for any business
to start in a country. Apart from the eye protection there are different policies after
government that could have an impact on the industry and hence this must be
analysed well before entering into it.
Image: Wikimedia

Economic Factors:
Below are the economic factors in the PESTLE Analysis of Old Navy:

Old Navy brand is affected by several financial factors.

The changes in foreign exchange rate, interest rate, gross domestic product, inflation
rate, employment rate, prediction of recession in a country are some of the major
economic factors that could have a great impact on a company’s operations and its
profit in the long term. High level of unemployment in a country could help the
company to get cheaper labour which will help them to gain larger margins of profits.
On the other hand, high levels of unemployment would also state that a smaller
number of people would be willing to spend on nonessentials. The levels of GDP in a
country are also a factor that could help in analysis of demand. The prediction of
recession in a country could not only help a company to take decisions on its
operations but also to take protective measures to survive in certain conditions. The
government intervention in the free market and deficiency of financial markets
maybe more such factors that could determine the availability or the ease of
acquiring capital in the country.

Social Factors:
Following are the social factors impacting Old Navy PESTLE Analysis:

There are several demographic issues that the retail industry faces no matter which
country it is operating in. the population in the country also has a great impact on the
demand. This is because declining population may lead to fewer population in
stores. And an increase in population may result in an increase in multi generation
households which could in turn impact the buying behaviour, leading to
unpredictable buying behaviours. This industry is also impacted by the frequently
changing trends that changes attitude of people and this usually takes place on
social media. more and more industries are being impacted Irish people are being
more opinionated on the Internet. Internet influencers hence play a major role in the
clothing retail industry. Another social factor impacting Old Navy could be the rising
education levels, people’s interest in the cultures and traditions of the country,
leisure interests and gender diversity.

Technological Factors:
The technological factors in the PESTLE Analysis of Old Navy are mentioned below:

With an increase in online shopping technological advancements are needed to be

kept on storefronts and the companies should take initiatives to enhance the online
experience by ensuring availability of products and good customer service. today we
live in a world where technology is advancing every single day and this in turn affects
the companies throughout the globe and hence Old Navy must keep up with these
advancements. Investment in research and development could help the company
become sustainable for the long run by innovation and first mover advantage. The
level of acceptance of technology must also be studied before adapting to any fancy
technologies. Social media marketing is another technological factor that the
company must invest in, as modern business environment demands it.
Such measures can also help companies to lead in market share and help the
company gain competitive advantage in the industry.

Legal Factors:
Following are the legal factors in the Old Navy PESTLE Analysis:

Though the political and legal issues may go hand in hand, the legal issues are more
related to the laws made by the government that every company in the industry has
to abide by. Some of those laws maybe consumer protection laws, employee
protection laws, anti-trust laws, health and safety laws etc. Abiding by these laws
ensures smooth operation of Old Navy company in the country and away from any
legal charges or law suits. Employment laws insure good conditions of the
employees. If there are any unfair practices taken against the laws whether it is
related to wages or related to the working environment conditions employees can
question the management based on these laws. The consumer laws are in place so
that the company cannot cheat its customers by selling bad quality products.
antitrust laws are also in place to ensure that the business runs smoothly and fairly.
Ensuring abiding by the law helps the company to operate efficiently without any
extra expenditures and time spend on legal proceedings.

Environmental Factors:
In the Old Navy PESTLE Analysis, the environmental elements affecting its business
are as below:

People have now become more willing to shop at eco-friendly places as they are
concerned with the amount of waste and pollution that are emitted by the prominent
brands. companies in such detail industries would also use material that are
provided by the external environment like plastic which could be heavily regulated in
certain countries. Consumers have now started focusing on how companies use the
products affecting the environment.

The company is also regulated to find out if their products use high level of energy or
exhaust high levels of air waste. this could also be an issue for these retailers as
consumers will be more conscious before buying these products. More factors like
waste management, laws regulating the environment pollution, recycling, weather
change, climate change etc may have a direct impact on the final products or an
indirect impact on its raw materials.