Sample Essay on FACTS about PESTEL Analysis of Big lots

FACTS about PESTEL analysis of Big lots

Big Lots Inc. is American company, with its headquarters in Columbus, Ohio. The chain’s departmental stores specialize in selling closeout and overstock products. This merchandise include toys, electronics, house ware, clothing and furniture. Today, Big Lots has more than 1,400 stores, and operates in 47 states. It employs over 37,000 people, who include part-time workers. In this PESTEL analysis of Big lots, you will discover how political, economical, social, technological, environmental and legal factors weigh on the company’s business operations.

Political factors in PESTEL analysis of Big lots

Government regulations and the political environment shape the activities of Big Lots. Over the years, the company has made decisions to comply laws and business from local, federal or state authorities.

Firstly, Big Lots has made several product recalls, which end up hurting its brand image. For example, it recalled many hair dryers because they did not have electric shock protection gadgets, thus exposing users to risk. According to market standards, the products were unsafe. As a result, some customers have lost trust in the company.

Big Lots also deals with business regulations in different countries. Some of these regulations and policies lead to high import duty, high shipping charges, restrictive quotas, and fluctuation in currency exchange rate.

How economic factors affect Big Lots performance

PESTEL analysis of Big Lots further shows that the economic environment equally has a bearing on the performance of the firm. For example, economic recession in America would lead to a drop in sales, even though the chain is more stable than its competitors in the market are. Because of recession, the company may have to lower its prices, to allow customers afford its products.

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Today, Big Lots faces high operating cost because of rising wage bill in the US. Since the government demands that employers raise the minimum wage, the company has no option but to comply with the law.  This increase in the cost of labor will affect the firm’s operating margins in the end.

Besides, Big Lots exited the Canadian market in February 2014, because of poor sales. This closure led to massive loss of between $38 million and $43 million, which mainly stemmed from severance, leases and asset write-downs.

Social Factors: PESTEL of Big Lots

Since Big Lots operates within communities and serves the needs of people, the prevailing socio cultural conditions also affect its performance. PESTEL analysis of Big Lots makes it public that these factors determine the purchasing power of consumers and their preferences. For instance, employees at Big Lots have narrow opportunities to grow. Most of the company’s employees are young, making it hard for them to get recognition from other workers.

Moreover, there is an increase in consumables with Big Lots’ target market. This affects the company’s sales as consumers have more options to consider when they are making a buying decision. Lastly, the high cost of living, and unemployment makes potential customers lose touch with the company and its products.

Technological Factors influencing Big Lots

Big Lots has stepped up efforts to keep pace with ever-changing technological landscape. The company has invested in the online platform to drive sales through interactive online shopping. Shopping at Big Lots gives consumers a different experience from traditional shopping. Through its website, customers can access the products without the hustle of visiting its physical stores. This is a good approach as the US expects increased online spending in the near future.

Environment drivers and Big Lots’ PESTEL Analysis

From this Pestel Analysis of Big Lots, it is clear that the company remains committed towards having a safer working environment and meeting the needs of the communities. To drive this, the firm launched The Big Lots Foundation to enhance its philanthropic initiatives.

The main purpose of these programs is to make a difference in the lives of people. The foundation focuses on a range of areas of need, including hunger, education, healthcare and housing. This is in line with its values to alleviate the living standards of people within it neighborhood.

Legal factors – Big Lots has faced a number of lawsuits. In a recent case, the company was sued for misclassifying employees and for denying them dues for overtime. Besides huge financial damage, these suits erode the company’s credibility in the market.

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