Pest Analysis of Gucci in Malaysia

2856 Words May 14th, 2013 12 Pages
External Environmental Analysis on PEST, PORTER’S FIVE ANALYSIS & SWOT

Introduction
The purpose of this report is to examine the external environment in Malaysia that affected Gucci, one of the Italian high fashion luxury brand. PEST analysis, competitive analysis and SWOT have been used by investigators to achieve the target.

Gucci- Company Overview
Gucci is among the sophisticated international fashion company which produces high quality of clothing, fragrances, accessories, handbags and shoes. Guccio Gucci founded Gucci in Florence in 1921. It has now become one of the biggest Italian brand which operates about 278 operated stores worldwide, and also franchisee its product worldwide by selling them in the department store.
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* Nevertheless, having to eliminate middleman to be the distributor cut the cost of production. By using e-commerce, the buyer is free to choose the item of their choice by purchasing them online and then it’ll be delivered straight to the consumer’s home.

Conclusion:

In conclusion, Malaysia is an Islamic country therefore there are several restrictions in manufacturing products. But then, Malaysia still is a free trade country. Since Malaysian population is increasing, GDP also increase making the customer to spend more which makes Gucci profitable. As Gucci opens it’s own factory in Malaysia and uses more labor forces, there’ll be more job opportunities for the Malaysians. Moreover, Gucci are mainly hand-made goods and uses technology such as online shopping to get the customer’s attention. Eliminating middle-man cuts the production cost since e-commerce is being introduced.

PORTER’S FIVE FORCES ANALYSIS

Porter’s Five Forces Analysis is named after Michael E. Porter. This five forces model helps in making important decisions to determine industry’s competitive structure. It analyzes five competitive forces that shape every industry. In order to analyze the competitive environment of Gucci, the nature of competition in any industry is personified in the following five forces:

Threat of New Entrants * The threat of entry of new competitors into the fashion retail industry is strong. * The chance of new firms entering the market affects

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