Environmental Analysis

Topics: Retailing, Shopping mall, SWOT analysis Pages: 5 (1539 words) Published: November 5, 2012
External and Internal Environmental Analysis
Aeropostale is a mall-based, specialty retailer of casual apparel and accessories, principally targeting 14 to 17 year-old young men and women through its Aeropostale stores and 7 to 12 year-old children through P.S. from Aeropostale stores (Aeropostale, 2012, para. 2). Aeropostale opened its doors in 1987, in the New York area. The specialty retailer had more than 110 stores in 1999 and has grown to more than 900 stores in the US, Puerto Rico, and Canada. Aeropostale’s name dates back to the 1920s. The stores are named after Compagnie Generale Aeropostale, an airmail company, was the first to fly between France, South Africa, and South America. External and Internal Environmental Analysis

A scan of the external and internal is essential in any organization’s planning process. A SWOT analysis defines the external and internal issues with which an organization much address in its strategic planning process. This type of analysis specifies the external and internal factors that are an advantage and disadvantage of the organization achieving its business objectives. The analysis guides the organization in matching its capabilities, resources, and challenges of the competitive environment in which it operates. External factors can include macroeconomic matters, technological changes, legislation, sociocultural, and competition. The internal factors can include personnel, finance, and manufacturing capabilities. External Environmental Factors in the Remote, Industry, and External Operating Environments

Remote environment is ecological, political, social, and technological factors or forces that affect a form’s decision-making ability and freedom, but beyond its control or influence (BusinessDictionary, 2012). The economic environment of society is a factor affecting company business environment. During the recession, consumers have spent less on shopping and other optional items. Teen retailers, once thought recession-proof, have suffered in this downturn. For example, Abercrombie & Fitch, which has maintained its premium price saw same-store sales dip an unbelieveable 28% in May (Time, 2009, para. 2). Aeropostale was also affected by the recession but the store provided promotions to keep customers returning during the downturn. During the first quarter, Aeropostale’s same-store sales increased 11%, and the company’s profits rose in 47 states for the first quarter.

Technology is also a factor in the external environment in business. Businesses need to keep up with technological changes. Aeropostale is introducing music to enhance the customer experience. The clothes retailer is placing iPads in fitting rooms to encourage shoppers to listen to their favorite music while trying on clothes. “The new concept store is the latest step in initiative to provide shoppers with a unique and innovative experience,” said Mary Jo Pile, EVP of Customer Engagement, Aeropostale. “It’s about creating an environment where the customer feels at home, and free to engage in their lifestyle while shopping” (The eTail Blog, 2012, para. 4). Businesses are affected by the political environment. The local, state, and federal legislation may provide incentives and tax credits to businesses. Legislators can also impose laws and other regulations to restrict business transactions. Social factors affect the economic environment of businesses are cultural influences of the time. For example, a fashion designer that creates boot-leg, striped pants will not be successful in an environment in which skinny jeans in solid colors are desired. Young men and women will not support styles that appear not to be trendy. Fashion designers must change his or her style. The clothes retailer that sale the fashion designer’s clothes will also suffer because consumers will not buy the clothes. Aeropostale has some competitors in the specialty retail clothing industry. Some of the leading competitors are Abercrombie...
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