"major uncontrollable, external forces (economic, demographic, technological, natural, social and cultural, legal and political) which influence a firm's decision making and have an impact upon its performance." - (Monash University, 2018)
When undertaking a macro analysis we are going to demonstrate a PESTLE Analysis to understand the macro-environmental factors that have an impact on an organisation. Ariat needs to monitor and respond to changes in the macro-environment to differentiate from the competition and create a competitive advantage.
Political
Several aspects of the government policy can affect a business. Ariat must ensure they are following the law. The government may choose to increase or decrease taxes and the decision will have a direct impact on Ariat. The shifts in interests’ rate might affect Ariat as they might have to pay their employees a larger rate of pay. It’s very important that Ariat follow the political environment to ensure they are meeting the governments requirements.
Economic
When there is a fall in the economy such as a recession or the rise in inflation will reduces a person’s gross disposable income. This then means people will spend their money on things that are essentials such as, shelter, warmth, food and drink, rather than luxury items they want but don’t necessarily need. If there is a rise in the economy can increase the financial stability of Ariat as their customers will have a greater gross disposable income and this then means their customers would be able to afford and buy the items they want to purchase.
Social
Social media platforms hugely benefit Ariat to be able interact with their customers. Social media they use is Facebook, twitter, and Instagram and tik tock and they all help to connect Ariat to billions of potential customers. This allows Ariat to have continuous conversations and receive feedback from their customers as well as providing an easy way of finding out about new products and ordering products.
Technological
Technological advances equal top specification clothing and footwear. Ariat use the latest scientific developments for both such as; EVA mid sole for absorbing shock; Advanced Torque Stability Technology to aid foot comfort and support; Waterproof Pro for waterproofing boots; and U Turn Entry System to enable easy boot removal.
Legal
Ariat has many patents in place to protect their designs and technology. In reference to products bought the Consumer Rights Act of 2015 says ‘products must be as described, fit for purpose and of satisfactory quality.’ They also have terms and conditions covering sales of their products.
Environmental
There is a high demand for eco-friendly products currently as there is a rising awareness of the preservation of the environment. Ariat wants to follow what’s going on in the world and what customers would want. Ariat follows ethical business practices by ensuring supplies are following regulations in each country their products are manufactured in. Ariat needs to look at producing less waste with their products as well as taking consideration when producing and exporting goods to prevent pollution and damage to the environment.