Detailed PESTEL Analysis of Sephora
Company professionals can diagnose the six essential external matters affecting Sephora's working and revenue with the help of the Sephora PESTEL Analysis.
1. Lead-in
A company is known for its brand value. Its impact in a respective industry. You can get introduced to more ideas about the PESTEL analysis to know more about PESTEL analysis's meaning. First, you should know that PESTEL analysis is the analysis through which company or industry professionals analyze the future decisions concerning the particular company or industry with the help of the six most important external factors.
These six most important external factors include political, economic, social, technological, environmental, and legal specifications. The article tries to decipher the Sephora PESTEL analysis in detail and we will share how easy and efficient it is to create a Sephora PESTEL Analysis diagram using the free templates provided by EdrawMax.
2. About Sephora
2.1 Introduction of Sephora
Sephora is a big brand that originated in France, and its main business revolves around beauty and personal care products. You can find various beauty products here, like cosmetics, body, nails, skincare, fragrance, and more. The article discusses the company through personal information about the company and the Sephora PESTEL Analysis.
2.2 Overview of Nintendo
| Company Name: | Sephora |
| CEO: | Jean-André Rougeot |
| Company Type: | Subsidiary |
| Year Founded: | 1970 |
| Employees: | Approximately around 39000 |
| Annual Revenue: | Approximately US$10 billion |
| Founder: | Dominique Mandonnaud |
| Area Served: | 34 countries worldwide |
| Headquarters: | Paris, France |
3. Sephora PESTEL Analysis
Political Factors:
The government laws and political factors that highly impact the revenue of Sephora are as follows:
- Animal Testing: Being a beauty and cosmetic brand, it is normal for companies like Sephora to do animal testing, but European countries have banned such products. So, Sephora cannot sell any animal-tested products in these countries.
- FDA approval: Launching products in any new market, which is related to the human body in any way, like medicines and beauty products, needs FDA approval, and without those, Sephora cannot launch its products anywhere.
- Political stability: Sephora has an active market in around 34 countries because of its high political stability. Sephora has an inactive presence in the African market because of political instability.
Economic Factors:
The points relating to the finance and money of the market where the business is happening are essential. Hence, the economic factors influencing Sephora's business market are as follows:
- Market Price: The market price of any product is primarily based on two essential factors, the first the cost of production, and the second is the price point.
- Price Point: Sephora needs to know the price point, which is the point where demand and supply become similar to have the highest profit.
- Areas of higher unemployment: With the ongoing recession and when each country is struggling to work with the slowing down of their economic growth, Sephora should try to increase its availability in areas where the rate of unemployment is more. It will lead to economic growth for the country and the company.
- Areas of low income: Areas with low income can be a significant factor that might affect the sale of products. Sephora can be considered a luxury brand, and its products are nothing but expensive. So, it is unlikely that people who earn the minimum wage will be able to invest a part of their income in luxuries such as makeup products.
Socio-cultural factors:
Society plays a significant role when it comes to the acceptance of any business or luxury brand. Therefore, the social factors impacting Sephora are as follows:
- Brand value: The company's brand value will increase if the customers and probable customers are happy with their products. Hence, Sephora needs to ensure they have the best quality cosmetic products so that their customers and non-customers think they are the epitome of any cosmetic product.
- Targeted marketing: Stereotypically, and with the help of data acquired from statistics, one can say that the niche using cosmetic products are all females. Therefore, it is safe to say that Sephora needs to put in more effort to attract female and probable customers to their cosmetic products.
- Social status: The higher income group tends to buy premium-quality, luxury cosmetic products. Thus, Sephora should target the higher income group because the chances of the lower-middle-class buying expensive luxury cosmetic products are zero.
Technological factors:
Technology has become one of the most important sectors with the help of which a business can bloom and stop being popular. Thus, such technical factors essential for Sephora's success are as follows:
- Social media presence: Companies like Sephora have heavy competition in the market. Companies like ULTA, Lush, and Nordstrom are big names in the beauty industry. These companies also have an active presence on social media. So, to compete with them, Sephora needs to make it more visible on social media.
- Mobile application: Nothing can draw more attention to a business than having a personalized mobile app. People in this age are more prone to order stuff online. They also prefer to know more about the company from a mobile app. Another reason why Sephora became the giant is its easy accessibility to its customers through its app.
- Timely technological advancements: Technology and business now work hand in hand. If you want to have a successful business, you must take the help of advanced technology. If Sephora uses advanced technologies to run the whole company, there is a high chance of cost reduction.
Environmental factors:
Taking care of the environment is everyone's responsibility. Customers prefer companies with environmentally-friendly measures. So, the environmental factors impacting Sephora are as follows:
- Use of renewable energy: Sephora is a well-known name in the US market when the question is about renewable resource usage. It is also a known fact that Sephora has been an EPA Green Power Partner for quite a few years now.
- Eco-friendly practices: In an age and time where our world is struggling to hold on to its safe environment, it is natural that humans are trying to get more conscious of their actions toward environmental preservation. Environment-friendly brands generally gain more attention. So, Sephora taking up eco-friendly measures is making it one of the biggest presences in the cosmetic world.
Legal factors:
Abiding by laws and regulations is necessary. Thus, legal factors which impact Sephora's revenues are as follows:
- Intellectual Property Index: While deciding where and in which country a company should invest, one of the significant factors that one should look into is the Protection of Intellectual Property Rights. IPR ensures that the owner or inventor of a particular product has the right to protect its creation for a specific time. Countries like India have a low rank in the protection of property rights index. So, it gets a bit risky to do business there. Sephora ensures to protect its products which is the reason behind its presence in the Indian market.
- Business and employment laws: An appropriate business and a giant company like Sephora should ensure that they have understood the business laws, employment laws, and consumer laws of the particular country where they are doing business. The brand might get sued and lose face in the market if they fail to follow those laws set forth by the respective governments of these countries. It will heavily impact their brand value, brand name, and reputation. Thus, it will directly affect their business.
4. How to Do a PESTEL Analysis in EdrawMax
- Step - 1: Preparation
- Step - 2: Template Selection
- Step - 3: Add Textual Information
- Step - 4: Customize
- Step - 5: Export & Share
If you are using the offline version of EdrawMax, open the tool in your system. If you wish to access remote files, head to https://www.edrawmax.com/online/ and log in using your registered email address. If this is your first time using the tool, you can register with your personal or professional email address. Go to 'Marketing' diagrams under Business diagram type and click on 'PEST Analysis.'
EdrawMax has thousands of free templates. Head to the Template section on the left and type 'PESTEL Analysis' to see all the pre-built PESTEL Analysis templates like Netflix PESTEL Analysis, Amazon PESTEL Analysis, IKEA PESTEL Analysis, and more. Check the template that resonates closely with your business model. Click on 'Use Immediately' to import the template's contents to the EdrawMax canvas. You can start customizing the PESTEL analysis diagram as per your requirements. If you want to draw the PESTEL analysis diagram from scratch, you can click '+.' It will open up the user-friendly canvas of EdrawMax that has several features that ease your efforts in making PESTEL analysis diagrams.
PESTEL Analysis diagram requires you to add Political, Economic, Sociological, Technological, Legal, and Environmental content so that the reader will understand what influences an organization. Use the PEST symbols from the left side and add the content to your PESTEL analysis diagram.
EdrawMax gives you ample options to customize your PESTEL Analysis diagram. From changing the background to adding content, you can customize the diagram in any way you desire. In addition to this, you can go ahead and change the background color, modify the text, add hyperlinks, add multiple pages, add images, and even add vector-enabled texts to your PESTEL analysis diagram.
Once satisfied with your PESTEL Analysis diagram, you can export it into multiple formats, including Microsoft, JPEG, PNG, Visio, HTML, and more. EdrawMax lets you share your PESTEL Analysis diagram on social media platforms, like Facebook, Twitter, Line, etc.
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5. Key Takeaways
The most important topic discussed in the whole article is the Sephora PESTEL Analysis. The six external factors that directly impact Sephora's operation have been discussed here in detail. The PESTEL analysis framework of Sephora has many vital points that the management should never fail to consider. The political, economic, social, technological, environmental, and legal factors might not look like the factors that can have a massive impact on a company, but it does. Hence, companies and industries are required to take care of those a lot.
When it comes to creating PESTEL analysis diagrams or any other business-related diagram, you will find EdrawMax Online to be the all-in-one effective tool. This PESTEL analysis diagram maker comes with free templates and resources that help create over 280 diagrams, almost 3x more than what Microsoft Visio offers. This affordable tool is a great alternative to Visio for beginners and professionals. Download EdrawMax today and start working on different PESTEL analysis diagrams.
Reference
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Case48. 2022. Sephora s Retail Innovation PESTEL Analysis., [online]. Available at: https://www.case48.com/pestel-case/49906-Sephora-s-Retail-Innovation (Accessed 31 August 2022).
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Team, M., 2022. Sephora PESTLE Analysis | MBA Skool., [online]. MBA Skool. Available at: https://www.mbaskool.com/pestle-analysis/companies/17991-sephora.html (Accessed 17 August 2022).
