PESTEL Analysis of Sears Canada Essay

PESTEL Analysis of Sears Canada

A PESTEL analysis of Sears Canada indicates the numerous external factors that affect the operations of this company.  These factors constitute the external environment within which this company operates. PESTEL analysis can be defined as a marketing principles’ concept that companies use in tracking the environment within which they operate. PESTEL analysis is very important when it comes to planning the launch of a new service, product or project.

Sears Canada is a retailer with headquarters in Toronto, Ontario. This company, established in 1952, offers consumers in Canada a wide range of shopping options with specialty and department stores. The operations of this company are in all territories and provinces in Canada with 167 networked corporate stores, 197 Hometown stores, 85 Sears Travel offices, 38 Home-improvement showrooms and a countrywide home maintenance, installation and repair network.

Comprehensive PESTEL analysis of Sears Canada

Political factors

The political expenditure policy of this company allows it to engage in the process of political campaigns in electing candidates for political parties that the company believes they support the entire retail industry as well as believe in a system of free enterprise. Using corporate funds, the company contributes for the candidates at state level and in the political actions of committees at state retail association level. Such political activities have an impact on the operations of the company.

Economic factors

Since the global economic crisis of 2008, the economy of Canada has been experiencing recession. The consumers’ Image 2purchasing power, unemployment rate and outstanding credit quality has been affected by this economic downturn. As such, consumers are more careful when spending and this has led to unsatisfactory performance of Sears Canada and a decrease in its revenue to $4300.7 million in 2012 from $4613.9 million recorded in 2011.

Social factors

Due to the economic crisis and its impact on the Canadian economy, Canadians have become more averse to risk especially as it is seen from their attitudes towards environmental and financial concerns. Canadians are also concerned about living cost and assets’ safety. These social factors affect the operations and performance of Sears Canada.

Technological factors

The internet is one of the major technological factors that affect the performance of Sears Canada. Online shopping is gaining increasing popularity among countries all over the world. Retailers are working very hard on online stores in order to give shoppers the best online shopping experiences. However, online spending in Canada has not reached optimum levels. This means that online market in Canada has a potential that Sears can exploit.

Environmental factors

Canadians are concerned about environmental issues like environmental degradation and climate change. Although these factors are faced by people across the world, Sears Canada needs to know these factors because they influence the consumption habits of Canadians. Canadians look for environmental friendly and ethically sourced products. Sears Canada must be aware of this while marketing its products to Canadians.

Legal factors

There is a comprehensive legal system in Canada which includes a Competition Act, Canadian Tax Law and Labor Law. These government regulations and documents protect employers and workers’ rights while facilitating efficiency in business operations within Canada. Although to abide by this system a business must incur costs, Sears Canada must follow them in order to avoid confrontations with Canadian legal authorities which can damage its reputation and ruin its operations.

Why PESTEL analysis of Sears Canada is important

A PESTEL analysis of this company gives the management a bird’s eye view or insights into the entire environment within which this company operates from different angles. It is important for the management to consider these external environment factors in order to plan properly or to implement certain ideas. After conducting a PESTEL analysis, Sears Canada can come up with a more comprehensive or detailed SWOT analysis version.

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