i

PESTEL ANALYSIS: ORIENTED ON RECOGNIZING THE OPERATIONAL

EFFICIENCY OF CUEROS VÉLEZ SAS IN THE MARKET

ANGIE KATHERINE IGLESIAS BALLESTEROS

KELLY JOHANNA MARCONI GUTIÉRREZ
YEFFERSON EDUARDO LOBO MORENO

Minuto de Dios University Corporation – UNIMINUTO

Specialization in Project Management

Management Principles

Colombia - 2020
 ii

PESTEL ANALYSIS: ORIENTED ON RECOGNIZING THE OPERATIONAL

EFFICIENCY OF CUEROS VÉLEZ SAS IN THE MARKET

ANGIE KATHERINE IGLESIAS BALLESTEROS

KELLY JOHANNA MARCONI GUTIÉRREZ
YEFFERSON EDUARDO LOBO MORENO

Delivered to

RAMIRO ANDRES VANEGAS

Minuto de Dios University Corporation - UNIMINUTO

Specialization in Project Management

Management Principles

Colombia - 2020
 iii

Table of Contents

P.

1. Introduction.....................................................................................................................................

2. Identification of the company.........................................................................................................

2.1. Cueros Vélez SAS..........................................................................................................................

2.2. About us..........................................................................................................................................

2.6. Company typology........................................................................................................................

2.6.4. Executive Summary.............................................................................................................................

3. PESTAL Analysis Development..................................................................................................

3.1. Political Dimensions.....................................................................................................................

3.2. Economic Dimensions..................................................................................................................

3.2.1. Economic dimension in the international environment of the sector...........................................

3.4. Social Dimensions...................................................................................................................................

3.5 Technological Dimensions...........................................................................................................

3.6. Ecological Dimensions.................................................................................................................

3.7. Legal Dimensions.........................................................................................................................

4. Analysis........................................................................................................................................

Conclusions....................................................................................................................................................

Bibliographic references................................................................................................................................
 iv

Table List

P.

Table 1 Cueros Vélez Executive Summary

........................................................................................................................................................
12

Table 2 Variation and annual contribution of the industrial production index by

industrial activity December 2019

........................................................................................................................................................

18

Table 3 Figures of clothing products imported by Colombia

........................................................................................................................................................
21

Table 4 Figures of clothing products exported by Colombia

........................................................................................................................................................
26
 v

Chart List

P.

Graph 1 Organizational Structure of Cueros Vélez SAS

........................................................................................................................................................
11

Graph 2. Production Sales Indexes for Spinning, Weaving and Finishing of

Textile Products and Clothing Manufacturing

........................................................................................................................................................

17

Graph 3 Comparison of the most imported clothing products in Colombia 2013-

2016 in thousands of dollars

........................................................................................................................................................

25

Graph 4 Comparison of the most exported clothing products in Colombia 2013-

2016 in millions of dollars

........................................................................................................................................................

29

Graph 5 Cueros Vélez Official Page

........................................................................................................................................................
37
 6

1. Introduction

Strategic planning in the context of the current market plays an important role for the

operational growth of organizational structures, hence the importance of having work

methodologies available that make it easier for managers to foresee future events; thus

highlighting the importance of this study to apply a PESTEL analysis, after being recognized

as an excellent instrument for evaluating the environment, especially in moments where

innovation capacity substantially prevails as an imperative to achieve a competitive advantage

(Parada, 2013). However, given the complexity of the economy, as a specific effect of

globalization itself, the perspective of a business management model cannot be addressed in

isolation; since factors related to the characteristics of the product, the economy and

competition must be estimated in an integrated manner with the purpose of forecasting the

greatest number of adverse scenarios applied in the long term.

A Pestel analysis is planned to be applied to the company Cueros Vélez SAS, characterized

by offering a broad portfolio of products that is always focused on attracting the attention of

men and women who want to demonstrate a completely unique lifestyle, which sets a trend

among life. social of your potential clients. In principle, both the leather, footwear and leather

goods sector has pre-existed in the national territory as one of the most traditional industries

that has not only boosted the economy, but has also changed lives; belonging to the

Textile/Confection, Design and Fashion cluster, which is recognized as a strategic

environment for the country, despite the fact that consumption in the union has been renewing

to the point of currently being filtered by a rather complex situation, in the same way that the

options to generate potential business in a large part of the Colombian industry. (Velasquez &

Castro, 2013)
 7

In this order of ideas, the PESTEL analysis will initially develop a quick analysis of the

company's business environment, in strategic factors such as: Political, Economic, Social,

Technological, Ecological and Legal (Jaramillo, sf). In general, these factors cannot be

controlled by Cueros Vélez, much less the effects that can transcend such as the existence of

positive possibilities, when innovating in products, designing the most convenient market

strategy to open the gaps that allow access to new business opportunities; but it can also cover

a negative area when it becomes a threat to the continuity of the company's industrial and

commercial activities, which would generate a revealing impact from the point of view that it

will arise in the manufacturing sector.

Therefore, this process allows us to identify the impact that in this case the company can

obtain in the long term by continuing with the marketing strategies that it is currently

implementing and, if necessary, being able to propose improvement actions that allow us to

counteract the mishaps perceived at the time of applying this management model; under an

approach characterized by managing a work route applied to project the continuous

improvement of the industrial and commercial activities of Cueros Vélez SAS.

 8

2. Identification of the company

2.1. Cueros Vélez SAS

The company was born in 1986 in the city of Medellín-Colombia, with an initial

commercial activity identified as manufacturing belts, in which its founder constantly

maintains a complete commitment to promote its projection of generating quality products to

continue transcending in the market. national and international, by managing to position its

brand and subsequently not depending on the management of third parties or the simple

versatility of the market that is constantly devaluing the union's merchandise.

Over time, it complemented its extensive product portfolio with bags, footwear and leather

goods, providing 100% leather merchandise. During 2009, a plant was put into operation that

at this time allows the verticality of an industrial model with 5 production plants. , ensuring

that more than 90% of the values are perfected within the company. In 2016, a new leather

plant was built, which has extensive, completely avant-garde technology, with a capacity to

generate 30,000 skins per month under eco-friendly techniques. Thanks to this advantage, the

company is appreciated as one of the most innovative in Latin America. (Vélez, 2020)

2.2. About us

According to the Cueros Vélez web portal (2020):

We are leather lovers, we tell stories through our products, we generate intense

desires and emotions to strengthen our commitment to the satisfaction and seduction of

you, our customers. (p.1)

 9

We are responsible for contributing to the construction of a better planet through

social responsibility and respect for nature. Our DNA is made up of four fundamental

axes. (p.1)

Surprising: a way to fall in love and generate emotions. Sensual: we stimulate the

senses. Sophisticated: you can feel trendy and chic. Natural: we are fashion, we are

inspired by purity and freshness. We have the soul of a Leather Lover. (p.1)

2.3. Mission

Satisfy and seduce our customers with fashion items in footwear, bags, belts, leather goods,

accessories and clothing; with a high specialization in leather manufacturing, seeking a

differentiating concept in design, comfort, quality and service. (Vélez, 2020)

2.4. Vision

In 2020, we will have leadership in the leather fashion concept based on innovation,

quality, design and positioning of the Vélez brand, through a wide network of stores and

distributors. (Vélez, 2020)

2.5. Corporate values

 Integrity
 I respect
 Responsibility
 Commitment
 Passion for the work
 10

2.6. Company typology

2.6.1. Legal form.

The Cueros Velez company is classified as a Simplified Joint Stock Company (SAS),

which is not required to create bodies such as the board of directors, or meet certain

requirements, such as plurality of partners. (Money, 2019)

Vélez and his collaborators are governed by municipal and national laws and decrees,

which are contemplated in the substantive labor code, commercial code, penal code and code

of renewable natural resources and environmental protection. All employees must adhere to

the rules and regulations established in the company, which will be applied in certain cases.

The level of application of the established standards is monitored by strengthening the highest

standards of ethical conduct within the Company. The cases that threaten transparency are

reviewed in any event where the company is affected and the investigations that are required

are directed. All employees who fail to comply with the laws may be subject to disciplinary

measures or corresponding actions, including termination of the employment contract by

unilateral decision of the Company and for just cause, without prejudice to the relevant legal

or judicial actions. (Arango, Gómez, & Cruz, 2019)

2.6.2. Size.

Cueros Vélez can be considered a very large company in Colombia and that is because

currently, the company of Paisa origin has an operation of “more than 3 thousand direct and

2,500 indirect employees, 120 suppliers of raw materials and finished products, a network of

stores in five other Latin American countries and a modern plant in Amagá,
 11

Antioquia, with the capacity to produce 30 thousand skins per month under sustainable

methods.” (News Center LATAM, 2017)

2.6.3 Organizational Structure.

Graph 1 Organizational Structure of Cueros Vélez SAS.

Source: (Castillo, Camargo, Betancurt, Escobar, & Arboleda, 2018)
 12

2.6.4. Executive Summary.

Once the description of the company has been made, the executive summary table presents

the basic data that associates Cueros Vélez SAS in the market. Fundamental to manage the

PESTEL analysis of this study.

Table 1 Cueros Vélez Executive Summary

Business name CUEROS VELEZ SAS

Website www.velez.com.co

Social capital $7,467,750,636.00 Colombian Peso

Permanent Employees 4969

Activity Code 1521

Social object Manufacturing and wholesale and retail

marketing of all kinds of fashion products

Secondary Activities  G4772 - retail trade of all types of

footwear and leather goods and leather
substitutes in specialized stores
 C1410 - manufacture of garments
except fur garments
 G4771 - retail trade of clothing and
accessories (including leather goods)
in specialized stores
 13

Suppliers  Calzado Perlatto SA In Liquidation

 ICVO SAS
 Marion Yes TO Yes In Business
Reorganization
 Willis Towers Watson Colombia
Insurance Brokers SA
 Ofixpres SAS
 SAS Goods and Products in Liquidation
 Customs Agency Mariano Roldan SA
 Disthinner Ltda
 Talón SAS Investments
 Tanneries Buffalo SAS
 Creatum Accessories SA
 Tanneries Of Itagüí SAS

Customers
 Natural people
 Marketing International Estrada
Velásquez Y Compañía SAS

Banks  Banco Comercial Av Villas SA

 Banco Davivienda SA
 Bancolombia SA
 Western Bank

Source: (E Informa, 2020)

 14

3. PESTAL Analysis Development

Impact Time Impact over

Grades Impact Importance
type frame time
+
PESTEL ANALYSIS High lake term > Increasing high
Positive
CÚEROS VELEZ How could the external factors indicated in - medium
Half ´= No changes low
column A impact? Negative term
Low Neutral short term < Decreasing

POLITICAL
The POT of the new rulers do not adapt to the
Periodic elections High Negative long term < high
needs of the company
There are subsidies for small and medium-
Government incentives High Positive long term ´= high
sized businesses.
Unemployment
Negotiation tables, inclusion for local labor half positive short term < high
management
Currently there are trade agreements to export
international deals high Positive short term > high
fur products to Europe and the United States.
ECONOMIC
interest rates Increasing trend in the usury rate. High Negative short term > high
Increase in production costs due to low
Inflation High Negative short term < high
demand
After Argentina and Bolivia, Colombia is the medium
Taxes High Negative < high
country where companies pay the most taxes term
Elimination of customs duty for skins medium
Growth High Positive > high
increases market movement. term
Supplies Low prices to purchase skins nationwide High Positive short term ´= high
SOCIAL
distribution Implementation of physical and virtual store High Positive short term > high
 15

demanding population Leather lovers for its high quality. High Positive short term > high
advertising Media and recommendation High Positive short term > high
TECHNOLOGICAL
Necessary changes in technologies according medium
improved equipment High Positive > high
to production needs. term
innovation Presentation of new products high Positive short term > high
Necessary to better market products including
marketing High Positive short term > high
digital marketing
Adapting to the current change, purchases,
Internet use inventories, sales, among others, are high Positive short term > high
generated virtually.
ECOLOGICAL
The company has an environmental
management plan and comprehensive waste medium
environmental restrictions half Positive ´= high
management in compliance with what is term
established by law.
It contributes positively in aspects such as
energy savings, water savings, substitution in
medium
climate change the use of polluting chemical substances to High Positive > high
term
others with better final disposal and
improvement in its wastewater plants.
Following environmental programs and
medium
waste control comprehensive waste management, this High Positive < high
term
control is satisfactorily executed.
LEGAL
standard to preserve and preserve and
Law 9 of 1979 high Positive short term > high
improve the health of workers
regulations on hygiene, housing and safety in
resolution 2400 of 1979 high Positive short term > high
companies
policies, programs, projects to improve the
decree 4108 of 2011 high Positive short term > high
conditions of workers.
 16

The leather company Vélez SAS, initially implemented a market investigation to obtain a

greater participation and provide new varieties in its products, with this it can be established

that the importance of carrying out the investigation is to have information that allows

formulating new alternatives to counteract the factors that are not under control, taking full

advantage of the alternatives offered by the market at the time the continuous improvement

process is being executed.

Due to the number of geographically dispersed branches, the company needed to integrate

its management systems to be able to access consistent data about the business. This was a

critical success factor, since Vélez belongs to an industry where material costs are highly

variable. Connecting the different points of sale with the headquarters was crucial to have

reliable and timely information, which would allow you to make more accurate business

decisions.

It was also essential to be able to exercise greater control over the dispatch, logistics and

stock areas, in order to improve the profitability of each product. In addition, Cueros Vélez

needs to optimize sales processes beyond retail activities, including corporate sales and

provision of items to manufacturers in other areas. Next, the factors that make up an essential

part of the PESTEL analysis will be detailed:

3.1. Political Dimensions

Colombia is a country that has presented a very slow evolution in the development of

industrial activities. Nowadays there are economic sectors that demand abandonment by the

state after becoming involved in other types of special interests.

 17

It was identified that political stability is very low and can have a considerable impact on

the development of clothing industrial activities in a global environment, although

government participation is active despite everything.

The strategies implemented by the government have not yet been able to have a favorable

impact on the sector and even more so in this year that many textile and clothing companies

have had to cease their production due to the lack of policies that manage to shield the sector,

so as not to harming families that depend unconditionally on these economic activities by

gradually unbalancing the economic, political and social fronts by not designing projects that

satisfy all the needs of businessmen and workers who are directly related by these poorly

established foundations and principles of the Colombian state . (Cano, 2017)

All this means that such an important economic sector for the country does not obtain

efficient development to meet the needs of the market because its progress is hindered by the

lack of key policies that protect the sector despite the fact that there are alternatives to be able

to carry out a business. of an international type that manages to favor them.

Unfair competition on the part of producers of inputs and consumer goods turns out to be a

problem for the development of a healthy economy in commercial terms, where it is worth

highlighting that the lack of credibility that businessmen have over the official state

institutions in charge of Maintaining order and protecting the manufacturing industry is

weakened, generating progressively more inconveniences to the industry and the need to

acquire resources is identified that allows maintaining a completely sustainable sector to

address the main challenges of the Colombian industry. (Asosec, 2018)

With the legislation of decree 2147 of 2016, the intention was to undertake a race against
 18

the clock between the entry and exit times of merchandise basically related to customs and

foreign trade operations, since this decree in its Article 139 is presented as a threat for

demanding industrial and commercial users a period of time to carry out said processes and if

not, they could face sanctions that would harm free zone users (Portafolio, 2017).

3.2. Economic Dimensions

To develop this dimension, we begin by describing the most relevant aspects of the state of

the clothing sector from an updated context, where the report prepared by the Superintendency

of Companies (2019) describes the main variables of the textile-clothing sector as well as

corresponding microeconomic aspects. to the year 2018, but at the same time corroborating all

this information with the data obtained in the GDP Supply and Demand Technical Bulletin of

the manufacturing industry corresponding to 2019 and the fourth quarter of 2018.

This document reports that for that same year the manufacturing industry in the textile-

clothing sector obtained an implication in the Industrial Production Index (IPI) of 11.1% in

the category Manufacture of textile products; On the other hand, the Tanning and retanning of

leather category presents a percentage variation of -1.8.

The year 2018 appears to be a good year of economic development for this sector

compared to the decline witnessed during 2017. Both manufacturing, marketing and exports

show positive progress, this is because sales of spinning, weaving and textile finishing

increased by 2.9%, while in 2017 this relationship was detrimental by -9.2 %, meaning that

year by year there was a growth of 12.1%. In relation to sales of clothing manufacturing, they

assumed an expansion of 1.5% for the year 2017, as can be seen in Chart No. 1.

(Superintendence of Companies, 2019)

 19

Graph 2 . Production Sales Indices for Spinning, Weaving and Finishing of Textile

Products and Clothing Manufacturing Source: Superintendency of Companies (2019) and

DANE quarterly data (2019)

The general behavior of the manufacturing industry during the month of December in what

dictates “The Quarterly Regional Manufacturing Sample - MTMR” of DANE shows us that

sales and the human factor decreased by 3.3% and 2.7%, proportionally (DANE, 2017).

Table 2 Variation and annual contribution of the industrial production index by industrial
 20

activity December 2019

Fountain: Index of Production Industrial (IPI) p.5. obtained from

https://www.dane.gov.co/files/investigaciones/boletines/ipi/bol_ipi_diciembre_19.pdf

With this panorama illustrated by the Superintendence of Companies and DANE, it is

evident that the sector is currently in a difficult situation because its production has suffered

considerable decreases at the national level and in fact this is a fact that it has not been able to

ignore, at The sector in general can be foreseen at a glance that it has challenges that must

necessarily be identified to determine the factors that specifically harm the clothing industry

in the city. The behavior of the economic factors of clothing, national and international trade

shows that its GDP growth is not very large according to the country's expectations due to the
 21

operational dynamics of the sector's economy and its inadequate management in the financial

movements manage to affect them directly. Followed by the tariff preferences obtained by

large companies in the sector.

By understanding this situation from a much more detailed perspective, we can have a

balance that demonstrates the current behavior of the sector. The market is in a state of

constant prospecting because the competition will always maintain an attractive proposal for

consumers, forcing other companies to always be combining their marketing strategies and

continually transforming their industrial production processes, since otherwise If this is the

case, it will be difficult to remove the threats that are acquired in an economy as competitive

as ours.

By relating an analysis of this economic environment to the existing difficulties and

disadvantages that some businessmen have with respect to companies that have a privileged

position in their infrastructure and benefits from tax and customs rates such as those obtained

by large clothing companies in the country we notice that finally they also have to work

persistently to be able to obtain a stable positioning in the national market, but this does not

mean that we should not overlook the strategies that can increase the category of a company

although certainly the institutional obligations such as taxes and fiscal policies represent a

very complex difficulty, but there are still creative ways to give added value to a product

despite the different economic difficulties that may arise.

According to Romero & Corredor (2009), in the leather goods market “there are about 69

leather goods companies, which generate 3,888 jobs per year, and represent about 1.5% of the

National GDP, according to studies carried out on leather goods in Colombia” (p . 62)
 22

3.2.1. Economic dimension in the international environment of the sector.

It is also important to consider international figures from a more globalized perspective in

the economy of industrial clothing production. It is decided to use the statistical tool available

to the general public “Trade Map” in the analysis of the imports and exports that Colombia

has carried out in the sector in recent years and correctly identify the behavior of the opening

of the markets and their differences.

Trade Map.com has commercial statistics and market performance indicators with data in

series from 2001 to the selected date, which made it possible to study and compare with other

times and see the dynamism in terms of values, growth rate and position in the world

according to the product category.

To locate the statistics that are described, the search engine that the tool provides on its

home page is used, whose keywords were knitted clothing garments and accessories, which

sends us to a very varied group of subcategories requiring to have an assertive criterion to

establish which statistics fit the clothing-textile research topic where the data that is reflected

in this document is real corresponding to the data of the year 2017, being the most precise to

evaluate the behavior of the low sector an international panorama.

Colombia in this category, apart from occupying the 51st position in the world of imports,

has had an active operation that in its entirety amounts to about $235,887 USD in 2016, but

the tariff rate for these products is very low with an average of 13 % to 14%, despite the fact

that the WTO establishes that up to 40% can be taken as a maximum for Colombia. The

problem is that the state's own laws still do not adjust to the current panorama of the economy,

they do not oblige customs authorities to charge a balanced percentage and neither do
 23

importers adjust to the prices of national production,

As it is much cheaper to import, businessmen are no longer interested in selecting national

production, causing a problem for the entire textile-clothing chain industry, because the goods

remain stored in the warehouses of the companies with an exit option. limited, generating a

minimal possibility of establishing new production lines and delays in the recovery of the

capital invested in these processes.

Companies with preferential prices granted to imports cannot compete due to the high rates

of taxes and obligations that apply to all companies in the country, which have caused there to

be no more balanced competition between producers from other nations. that sell clothing

items ready for distribution and sale directly to importers. This means that even in the country

it is necessary to establish contingency plans that help strengthen the manufacturing sector

much more because the problems in this industry continue to arise without being able to

adequately satisfy the needs of national trade, which, failing that, can bring with it an unstable

trading system, harming all those involved in the course of all these industrial operations. (See

Table 3)

Table 3 Figures of clothing products imported by Colombia

Imported
value in
Rate Average
2016 Position in the
Product description tariff
(thousands world imports
annual (estimated)
of
growth in applied
USD)
worth

between
 24

2012-2016 for
(%, pa) Colombia

All the products 44889367 -6 51 6,2

T-shirts and T-shirts, knitted 50446 -8 58 14,2

Sweaters, pullovers, cardigans,

vests and similar articles, knitted
or crocheted (excl. vests ... 44751 -10 55 13,6

Tailored suits, sets, jackets,

dresses, skirts, skorts, pants ...
24700 -10 63 13,9

Women's or girls' shirts, blouses

and shirt-blouses, knitted or
crocheted (excl. "T-shirts" and t-
20325 -14 35 13,9
shirts)

Knitted shirts, for men or children

(excl. nightgowns, "T-shirts" and
T-shirts) 19646 -8 40 14,1

Leggings, pantyhose, tights,

stockings, socks and other
hosiery, incl. ... 14047 -2 63 13,8

Knitted garments and clothing

accessories "accessories", for
babies (excl. caps) 13496 -2 50 13,5

Suits "both or suits", ensembles,

jackets "sacks", long pants, pants
with dungarees, ...
9644 -4 70 13,8
 25

Gloves, mittens and mittens,

8167 1 49 14,4
knitted (excl. for babies)

Slips, petticoats, panties, incl.

those that do not reach the waist,
... 7944 -12 71 13,4

Special clothing items, for

specific uses "e.g., professional,
sports, etc.", ... 5443 2 63 13,5

Underpants, incl. long ones and

"slips", nightgowns, pajamas,
bathrobes, dressing gowns ... 4542 -7 73 13,5

Coat sets for training or sports

"tracksuits", jumpsuits "overalls"
and sets ...
3818 -3 68 13,4

Coats, jackets, capes, anoraks,

jackets and similar items, knitted,
for women ... 3078 -5 57 14,4

Ready-made, knitted clothing

"accessories"; parts of garments
or accessories ...
2904 -13 79 14,4

Coats, jackets, capes, anoraks,

jackets and similar items, knitted,
for men ... 2629 -21 65 14,4
 26

Garments made of knitted,

rubberized or impregnated
fabrics, coated ... 307 53 78 14,4

Total value of imported products

235887
in Colombia

Source: (TRADE MAP, 2017)

In another variable, a notable change can be seen in the level of imports in Colombia with

respect to the year 2013, 2014, 2015 and 2016, where it is surprising what the historical data

of the Trade Map illustrates.

Imports greatly affect the productive reality of the country directly to the clothing sector. It

is curious that the value of imports has decreased with each passing year, although not enough

because products already manufactured abroad have also decreased their prices, which would

explain the reduction in the values of imports in the country, in any case the relationship with

the difficulties that national producers have had in clothing does not show better expectations

even if negative figures are seen in imports.

For example, the T-shirts and knitted t-shirts category for the year 2013 represented a total

import value of $74,307 USD and on the other hand, for 2016 it represented a total value of

$50,446 USD, demonstrating a decrease in the import value of $23,861 USD that In a

percentage we would represent it with a value of 32.11% over the course of these four years,

then it is seen that imports need to reduce this figure much more in order to support national

production, we must also take into account factors such as the reform tax that changed the

rules of the game this year since taxes such as the 19% VAT and the prices of current inputs
 27

considerably affect the value of the final product.

Graph 3 Comparison of the most imported clothing products in Colombia 2013-2016 in

thousands of dollars . Source: own elaboration through data obtained in the TRADE MAP
2017

In comparison with the exported products, Colombia adds a total of $157,371 USD for

2016 (See Table 4), overall occupying the 57th position in the world in exports of clothing

products, with a share of exports of 0.2%. .

Here at this point it can be seen that although the vast majority of businessmen have

predilections for importing ready-made products, there is also a significant number of

companies that are dedicated to exporting ready-made Colombian goods, of course not at the

level of the large developed countries, but failing that it can be seen with these figures that the

country's commercial journey at an international level has been shown positively, making

known the best of Colombian merchandise with the quality that highlights the product offered
 28

in the best stores in the world. world and with the endorsement that Colombian labor represents

a unique symbol that cannot be questioned so easily, demonstrating that national brands have to

manage to be able to participate in the international market by maintaining the status of optimal

manufacturing. the requirements of consumer demands for this type of products in a global

environment.

Table 4 Figures of clothing products exported by Colombia

Rate
Value
exported Participation
annual
in 2016 Position in the
growth in in world
(thousand exports (%) world exports
value
Product description s of
between
USD)
2012-2016
(%, pa)
All the products 30984392 -17 0,2 57

T-shirts and T-shirts, knitted 32829 -16 0,1 62

Coat sets for training or sports

"tracksuits", jumpsuits "overalls"
and sets ...
21421 -3 0,5 26

Tailored suits, sets, jackets,

dresses, skirts, skorts, pants ...
21008 2 0,1 61

Sweaters, pullovers, cardigans,

vests and similar articles, knitted or
crocheted (excl. vests ... 19368 -6 0 61
 29

Slips, petticoats, panties, incl.

those that do not reach the waist, ...
18828 -18 0,2 44

Leggings, pantyhose, tights,

stockings, socks and other hosiery,
incl. ... 10791 -23 0,1 53

Underpants, incl. long ones and

"slips", nightgowns, pajamas,
bathrobes, dressing gowns ... 7602 -36 0,1 44

Special clothing items, for specific

uses "e.g., professional, sports,
etc.", ... 6898 -14 0,1 48

Women's or girls' shirts, blouses

and shirt-blouses, knitted or
crocheted (excl. "T-shirts" and t- 6656 -26 0,1 56
shirts)
Knitted shirts, for men or children
(excl. nightgowns, "T-shirts" and
T-shirts) 3364 -22 0 66

Suits "both or suits", ensembles,

jackets "sacks", long pants, pants
with dungarees, ... 2902 -3 0 80

Knitted garments and clothing

accessories "accessories", for
babies (excl. caps) 2394 -18 0 61

Coats, jackets, capes, anoraks,

jackets and similar items, knitted,
for women ... 1058 -14 0 75
 30

Coats, jackets, capes, anoraks,

jackets and similar items, knitted,
for men ... 1043 -13 0 60

Ready-made, knitted clothing

"accessories"; parts of garments or
accessories ...
752 -18 0 64

Garments made of knitted,

rubberized or impregnated fabrics,
coated ... 579 578 0,1 48

Gloves, mittens and mittens, knitted

238 -6 0 72
(excl. for babies)

Worth Total of the products

157731
exported in Colombia

Source: (TRADE MAP, 2017)

Comparing the historical level of exports that Colombia has managed throughout the years

2013, 2014, 2015 and 2016, according to graph 4, a slight decrease in the volume of sales

worldwide can be observed, this considerably affects the economic stability of the Colombian

industry because today the price of the dollar remains at an average price of $2946 COP.

It is fair to mention that these currencies can help strengthen the national economy but their

reality is different due to the tendency to import already made products and it is for obvious

reasons since it is more expensive to produce a garment in Colombia than to buy it directly on

the international market. Continuing with the economic analysis of graph 2, the T-shirts and

T-shirts category, knitted, in the period 2013 to 2016, the export value has decreased by

$17,397 USD, represented by 34.63%. A value that should at least have been maintained, but
 31

trying to understand Colombian businessmen, elementary factors can be mentioned such as

the costs of production, transportation, logistics and taxes that they must comply with in other

nations where they sell their products, thus limiting an operation. with the intention of

expanding to other markets.

Graph 4 Comparison of the most exported clothing products in Colombia 2013-2016 in millions

of dollars . Source: own elaboration through data obtained in the TRADE MAP 2017

Although imports have decreased in Colombia, it still continues to directly affect national

production and marketing in the clothing sector because the prices of national inputs continue

to rise and fixed production costs do not remain very stable as expected. could wait, the ideal

way to complement these shortcomings in the sector is to adapt to the commercial changes that

are occurring in the country and promote an innovative solution with marketing and production

strategies renewed to the requirements of end customers.

3.4. Social Dimensions

 32

It can be said that society is not yet in a balance corresponding to its needs, so it is essential

to highlight the conditions that are considered a threat after not being able to remain hidden

because in Colombia unemployment rates maintain a result that is not at all positive. , despite

the fact that the clothing sector provides many vacancies for the country's workforce,

obviously with the cessation of activities that many companies in the sector have presented

during the course of this year, they have forced to reduce their workforce, with no choice but

cause a social problem that affects many workers.

Unemployment rates have risen considerably, making it impossible to create quality jobs

and this is understood as a very risky management dynamic both for the sector and for the

same people who depend on these industrial activities for their livelihood, although wage

policies are not sufficient. so that people can support their expenses and even more so if it is

an operator who only earns one SMLMV.

Now, proposing a scenario where it is not possible to ensure a suitable salary that can cover

at least the basic needs of the workers gives rise to informality on the part of unemployed

people after not being able to have formal employment, causing social exclusion. take

advantage in organizations by segmenting the majority of individuals with limited resources,

in addition to this the situation indicates a low probability of making your call to be heard and

difficulties that harm the balance of society.

Finally, it is essential to highlight that the findings made by the Colombian Association of

Leather and Leather Manufacturers - ACICAM - indicate that in 25 companies in the sector,

15% of the human factor performs activities destined for the administrative area, 4.6% in
 33

management. logistics, 17.8% are in charge of developing marketing tasks and 62.6% deploy

the different jobs corresponding to the production area (cited in Castillo & others, 2018)

3.5 Technological Dimensions

Information technologies are booming every day to provide entrepreneurs in the sector

with a dynamism conducive to overcoming the barriers that previously limited commercial

relations between producers, suppliers and consumers of final consumer goods, classifying

them. as a favorable impact for companies if the strategies are appropriately implemented in

order to manage a positive advance in production; It is worth noting that with this fact, new

management of social communication networks may still be required, after seeing that all the

information is now directed to the management of digital resources that must make the

difference from what you can acquire in a scheme appropriate to the companies' budgets.

Now, industrial processes need optimization that allows them to efficiently take advantage

of the available resources and achieve the greatest possible use of these technical

complements. On the way to achieving this automation Cueros Vélez still appears as a

potential investment that must be made wisely before going ahead to make a move that could

directly harm production, since access to cutting-edge technology can give added value to the

organization, since it is true that globalization has managed to bring out the most

representative features of an industry as composed as the Colombian one.

Technological development is not keeping pace with market requirements due to the fact

that its evolution is still at a pace that cannot remain competitive with the rest of the producers

from other nations that manage to surprisingly cover the local market, harming local

producers. Practically in the technological field, companies in the sector must include the
 34

following components in their communication channels:

 Information security itself

 Tracking the production chain.

 Quick access to suppliers and their corresponding input prices.

 Access to the technological substructure constantly.

 Transmission of knowledge and work techniques from the headquarters for the

modernization of procedures in its different corporate headquarters.

 Improvement of production activities with the computerization and systematization of

administrative and industrial management processes.

 Certification of methods, goods and services.

 Adjustment of new technologies in marketing methods implemented by the

organizational structure.

 Improve websites, virtual portfolios, and social network management to have a greater

promotional reach to clients.

3.6. Ecological Dimensions

There is a growing concern worldwide about the effects that industrial activity has on

natural resources and its implications for climate change. To achieve effective and bearable

management of the environment, it is essential to generate a sense of integrated culture with a

systematic orientation of joint cooperation to compress the environmental impact. Even so, the

clothing sector is one of the industries with the most devastating use of chemicals and the

largest polluter of water sources even after agriculture itself, which is why it is important that

governments and the industrial sector take into consideration the effects environmental issues
 35

exposed by González (2013):

 The remains of textile materials make up almost 5% of the entire landfill site.

 1 million tons of manufactured clothing products end up in river landfills every year.

 20% of manufacturing pollution to fresh water comes directly from textile treatments

and tanneries.

 It takes about 500 gallons of water to make enough fabric to cover a sofa, and it takes

700 liters of pure water to make one T-shirt.

3.7. Legal Dimensions

According to the research by Castillo & others (2018), in their diagnosis, these legal factors

can compromise or optimize the commercial effectiveness of Cueros Velez SAS:

 ANDI was created in 1997 to help highlight the competitiveness of organizations.

This entity provides the manufacturing sector through its intervention with potential

opportunities in the market through its reports and research, especially in the clothing

and leather goods industry, so that entrepreneurs can manage their positioning

strategies through their analysis of the environment.

 FTA with the United States. Thanks to this treaty, 99.9% of Colombia's exportable

supply can obtain almost immediate access with completely profitable and even free

tariffs. On the other hand, 81.8% of US industrial goods will be acquired in our

country.
 36

 Law 1450 of 2011 in art 50 established: Productive transformation program. The

Ministry of Commerce, Industry and Tourism will allocate capital for the Productive

Transformation Program, through an individual account management tool that for all

purposes is related to an independent asset. The program will present political

implementation and official and private business projections for the progress of

essential sectors for the country.

 Anti-Smuggling Law Project, seeks the legal components to certify raw materials.

 The Government applies measures to optimize the mission of the Tax and Customs

Police (POLFA), through the short-term association of 1,000 additional personnel and

the acquisition of devices for non-invasive intervention.

 Generalization of Decree 074, which seeks to assign mixed tariffs to the import of

clothing and footwear that manage to arrive in the country at costs lower than the

country's real production values, placing national manufacturers at a disadvantage.

 37

4. Analysis

As could be observed during the PESTEL analysis on dimensions that the company does

not manage, it can be stated that these effects are facts that always transcend the working life

not only of the clothing sector, but can also affect other types of industries and can even

decrease the quality of life of people. In direct relation to the strategies used by Cueros Vélez

SAS, it can be argued that despite presenting certain setbacks, the company has always tried

to find effective alternative solutions to the political, economic, social, technological,

ecological and legal dimensions.

In the political sphere, many times the efforts of the representatives on duty can hinder

business opportunities in all foreign and national investments and it is no secret to anyone that

an individual who has a well-supported knowledge of current government efforts to forming a

company in Colombia and being able to identify the arbitrariness on the part of state officials

will hardly attract the attention of these businessmen and it is difficult to invest an unjustified

amount of money in a nation that does not provide guarantees to apply these business

procedures. On the other hand, regarding the options to generate imports, care must be taken,

especially if the correct documentation is not available, which is why Cueros Vélez, seeing

this difficulty in accessing its raw materials necessary to develop all its manufacturing

processes, saw The need to produce his own inputs forced him to open one of the most

modern tanneries in Latin America when he saw that the national leathers were not of quality

and subsequently could not meet the demand of the organization to fulfill the requested

orders. (NoticiasCaracol, 2019)

 38

In the economic sphere, it can be added that thanks to the decision-making capacity of the

owner to face the versatility of the market, in terms of the value of the merchandise that is

characterized by being completely unstable and more so in a work environment than every

day presents new suppliers with high competitive margins, for the commercial sector of

Medellín in its beginnings as for the rest of the country; Not only was it seen that it had a big

problem in continuing to obtain a completely positive profit margin, but the company's

production capacity was also compromised after initially having an administrative office in

the Laureles neighborhood and working with satellite workshops. The point is that he could

not continue working with this differentiation, so Juan Raúl Vélez throughout his life has

focused on positioning his brand and offering a quality product, what he makes available to

his respective clientele is the possibility of managing a completely versatile lifestyle that

adapts to the eventualities of society. (CITYTV, 2016)

As could be reviewed in the PESTEL analysis, in the economic dimensions, the clothing

sector, especially the part of products related to leather, presents great challenges because the

figures released by the Superintendence of Companies and DANE, expose a completely bleak

and devastating panorama for the new microentrepreneurs who are starting in this union.

Therefore, the importance of positioning the brand to be able to have many more business

opportunities that can be taken advantage of at the highest level by generating that added

value of the product and not constantly fighting with the price margin that will never provide a

noticeable evolution for the market economy.

Perhaps what has helped the most to enhance the Cueros Vélez company is the firm's

ability to expand after covering international markets including Mexico, Ecuador, among
 39

other nations in the world; In addition, participation in various fashion events helps to renew

production ideas and the company is generally in a constant process of improvement so that

its designs increasingly have a greater effect on the consumer's perception that manages to

attract their tastes. . It cannot be forgotten that this company has a wide range of products in

its corporate portfolio, and just by reviewing the official web portal you can see various

options it has for both the national and international markets (See Chart 3). In this order of

ideas, the company has a good work plan in its strategic planning because it always seeks to

improve in the presentation of products. It is only possible to insinuate that in the face of any

market decline, an entrepreneur must have enough acuity to take advantage of crises and turn

them in potential opportunities for the market.

Graph 5 Cueros Vélez Official Page. Source: (Vélez, 2020)

 40

The Social dimension is a very determining factor not only in the marketing of products,

but also in their production. In a way, the consumption preference of potential customers plays

a predominant role in guaranteeing the marketing of the products offered by the company,

which is why the company recognizes the importance of having a work team committed to the

company's vision. with the availability of all the 4,969 workers who belong to the Cueros

Vélez SAS payroll.

This point is a great component that guarantees the success of the strategy implemented by

the company, although at a certain point it is not possible to master aspects as significant as

the tastes of people, which in themselves are quite complex to identify, the company strives

for making a difference by opening a wide range of products that are made by its work team

by being able to incite a sense of belonging aimed at obtaining greater commitment to carry

out the planned activities well. However, the unemployment rates in Colombia seem to have

no solution in the long run, since working conditions are constantly changing the rules of the

game and this can undoubtedly also affect the motivation of staff, it is necessary to be

attentive to any work behavior that is not linked to production requirements. In short, the

creativity of the human factor must be encouraged to generate cooperation that allows creating

alternative solutions applied to consolidating potential businesses in the union that in itself

presents many drawbacks to increasing the country's economy.

In the Technological field, the company does satisfactorily meet all the requirements put

forward in the PESTEL analysis since the directives understand the importance of maintaining

completely strengthened communication channels, especially in the production chains, it also

masters efficient production of inputs that It allows you to supply your own factories without
 41

the need to have the constant intervention of third parties to supply them with the necessary

materials for the company's manufacturing processes (NoticiasCaracol, 2019). To a certain

extent, the company's effective management capacity could not be what it is today, if it were

not supported by information technologies, as it should be noted, it also has state-of-the-art

instruments for the manufacture of products that will later be commercialized in their

corresponding sales channels.

The Ecological field, in Colombia, does present great challenges to be resolved, as could

be seen in the clothing manufacturing industry, it causes the waste of water sources after

agriculture in which various companies almost never take responsible management into

consideration. of this resource. In the case of Cueros Vélez SAS, according to the Noticias

Caracol report (2019), the company has a leather treatment plant considered one of the most

modern on the continent to leave the water completely suitable for human consumption, but it

is not worth remembering that no matter how efforts made to preserve the environment there

will always be a large gap that distances the possibility of having a renewable and self-

sustainable production system, and even more so where large industries only think about

generating capital to continue with their industrial operation, it is not possible to do so. denies

the company's effort but the dimension corresponding to the management of natural resources

always presents conflicts in this area but in many more. The only thing that can be done in this

eventuality is to always look for alternative solutions that adapt to the great environmental

challenges and think a little more about preserving them so as not to regret their loss in the

near future.

Finally, the Legal dimension exposes us to a package of precepts that can be used by
 42

Cueros Vélez when contemplating the possibilities that the FTA offers for the

commercialization of products in the market by managing to leave the comfort zone to which

it was in the past. exposed the company, as such the owner of the company has always taken

into consideration these opportunities to acquire greater experience in the framework of

international business, especially when positioning the brand as a completely alternative

lifestyle to break the paradigms imposed by the traditional fashion.

It is important to understand that Colombia is very strict in criminal actions such as

smuggling, in that sense Cueros Vélez chooses better to be a supplier of most of its inputs

necessary for manufacturing processes, which is why it does not present conflicts regarding

the regulation of inputs and products with altered documentation, because everything is

manufactured in the national territory.

 43

Conclusions

 The PESTEL analysis allowed us to understand the effectiveness of Cueros Vélez, in

relation to the operation strategy according to its industrial and commercial activities,

corresponding to this, a quite favorable competitiveness is observed in the economic

dimension, since its possibilities of achieving potential businesses grow. constantly

according to the information obtained in the interview conducted by Noticias Caracol

(2019) with the owner of the company since he cannot imagine how his company will

end in the distant future, the important thing is to understand that all options are open

to take them into consideration.

 A good strategist detects business opportunities at the right time even when the actions

carried out by an entrepreneur do not seem to have a positive vision. This means that

the perseverance and discipline enacted by the owner of the company is a plus point,

But it is not a secret that if we do not have a work team completely committed to the

projections of the organizational structure when generating ideas that allow us to

counteract the negative effects of those dimensions of the PESTEL analysis, they

indicate that they cannot be controlled not only by Cueros Vélez SAS. , but also any

organization that is dedicated to marketing products; It will be very inefficient and this

is because the market is always presenting changes in its transactional behaviors and

not being prepared for this is synonymous with not being able to guarantee the

continuity of the company no matter how enthusiastic the management is.

 Finally, Cueros Vélez, with the work dynamic it currently has, has a world of
 44

possibilities and even more so if it continues to position the brand as it has been doing

until now, especially in the international market, which formulates the possibility of

not depending on the same comfort zone. because it is not necessary to compete with

local producers in terms of an unfavorable price margin in relation to the quality of the

product offered. This aspect of the company should be a model to follow for

companies in the sector, because it is not only clothing that it sells but it is also a

completely differentiating lifestyle, which this message will impact much more on the

psychology of the company itself. consumer.

 45

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