PESTLE

Political

Political regime: Middle East is a region that is full of resources, especially petroleum which makes countries in the region high profitable. Additionally, as years have demonstrated, most of these countries are ruled by authoritarian regimes or monarchies, which can create high social and political controversies. The diversity of cultures and religions causes the region to be constantly tense, conflicts like Shiism and Sunniism

Economic

Exchange rate: Volatile exchange rates might be prejudicial to brands, as they can affect the costs of primary goods, materials and production, which will affect pricing

Pressure on consumer spending: Changes in income levels can affect sales directly, as the impact modifies brand’s demand.

Social Trends: Changes in consumer tastes, preferences and attitude towards the luxury world will impact the demand

The media: they play a key role in influencing many aspects. Hermès can take advantage of this trend to better market and position its products

Leisure interests: Costumers around the world are giving more preference to experiential products over the traditional value proposition in the consumer cyclical sector

Demography: Age, income and gender structure can impact the demand for luxury products.

Social Values: The fashion industry has to constantly be on track of consumer values and attitudes so they can adapt their products and messaging to align with changing social values and trends

Technological

Digitalization: Fashion brands need to have a strong online presence and ecommerce capabilities that deliver an excellent customer experience to stay competitive For Luxury Brands, the same experience offered in stores is expected online. Innovation: Technological advances in materials production methods, design are rapidly changing, and the luxury industry needs to keep up with these advances

Legal

Intellectual property: Luxury Brands need to protect their creations through patents and trademarks. Labor laws: All brands need to comply with labor laws and regulations in the manufacturing process. Consumer protection: All products must meet safety and quality standards, in order to comply with consumer protection laws.