Question & Answer: External Environmental Analysis for The Children's Place Industry analysis…..

The Children’s Place

The Children’s Place Inc. is the retail shop for the children’s Apparels and their accessories. The store Head Quarter is located in Secaucus, New Jersey, United States. Presently, the Chief Executive Officer is Jane T. Elfers. The total number of employees working across all the stores are near about 2200.

External Environmental Analysis

The external environmental analysis is done in order to analyse the current trends in market, people’s choices, behaviour of individuals, threats and opportunities towards the new products, etc. and many more. This the process of scanning, monitoring, forecasting and accessing the external environment actions and reactions towards the product.

Competitive analysis:

The Children’s Place major competitors are Carter, American Eagle Outfitters Inc, Tommy Hilfiger and Gap. As we see these retail shops they have the leg on apparel not only for Children but also for higher generation. This retail shop deals in apparels only for Kids. Hence the focus is more which brings attention to the customers.

Techniques Analysis:

PESTEL

PESTEL stands for Political Economic Social Technical Environmental and Legal.

Political: The political environment made the impact on the business as they are expanding their business internationally. The policies and tax norms of every country are different. So there will be a kind of tedious process involve in it which would intern reflected in their way of doing business.

Economic: The financial ratios like profitability, growth & efficiency shows that the economic condition of the company is positively sound and showing upward movement from the past years. They have started a fleet optimisation program in order to analyse the performance which has giving benefits to the business.

Social: Social impact on this company is more because of they are dealing with most sensitive generation which needs care. They are providing unique and fashionable products to their customers.

Technical: As per the changing in technology day by day, the usage of it is also needed in order to grow with it. This company has also chosen the path of technology by the launched of core merchandising & pricing modules for the ERP system, launched a global sourcing portal and time to time upgrade to e-commerce website.

Environmental: They have a concept called segment reporting of data based on geography which shows the environmental effects on their products. The impact of the environmental changes can be analysed on the basis of this. So as per the reports, they are doing business with the sustainable development.

Legal: Anti-trust law, Discrimination law, Consumer protection and e-commerce, Employment law, Health and safety law and Data Protection all these legal aspects may have the major impact on the business. Follow the law protocol would be always providing the benefit to their business as they are doing so.

Five Forces

• Power of the buyer – The power of buyer is high in this case.
• Power of the supplier – The bargain power of the supplier is high because of nature of the industry.
• Barriers on new entries and Exiting Entries- The barriers are very less in comparison to other industry. So it comes under moderate to high scale.
• Substitute Products- There are no substitute products available to these products So the competition is moderate to high.
• Intensity of competitiveness among Sellers- The competitiveness among the seller are high on the basis of products and the price strategies. They are providing the affordable price products and accessories.

OT from SWOT:

Opportunity:

1. Expansion of the business as they only focused on Children segment and technology usage.
2. Expansion towards products and accessories as the fashion and trend of clothing changes time to time.

Threats:

1. Change in customer behaviour and trends
2. Geographical conditions not suitable in case of expansion
3. Power of control

References:

• Website of The Children’s Place.
• Annual reports of the company.