Guess SWOT and PESTLE Analysis

Strength

1. Brand equity source of sustainable competitive advantage: The GUESS brand is a strong asset for the company that has been built over the years. It is a strategic asset and also the primary source of competitive advantage. The good thing about a strong brand is that it cannot be duplicated by any competitor and represents a source of identity with which the customer associates themselves. The brand communicates a distinctive image that is fun, fashionable and sexy. This image has been maintained consistently around the globe through the emphasis on innovative product designs and award-winning campaigns. Brand loyalty, name awareness, perceived quality, strong brand images, public relations, publicity, promotional events and trademarks all contribute to the reputation of the company. The strong brand equity can be a source of consistent returns for the company in the long run.

2. Multiple distribution channels across the globe: GUESS uses use direct-to-consumer, wholesale and licensing distribution channels to sell their products. This allows them to spread their risk so that their results do not end up depending on any particular retail channel. The use of many channels also allows them to be flexible to any changes in the distribution environment. Their direct to customer is omni-channel based both for online and brick and mortar. This helps in creating a seamless experience for their customers. The use of multiple distribution channels has also helped them gain an advantage in terms of experience managing them. This is quite beneficial in the long run.

3. Strong management and excellent corporate strategies: The company has consistently performed well as a corporate starting with the successful mergers and acquisitions of many companies with itself. They have been successful in integrating technology companies with their own DNA to streamline operations and bring forth digitization. This proves the fact that they pose a strategic vision. They have employed their efforts to build a reliable supply chain. Another area where they have proved their expertise and experience is in entering new markets and making success. Their expansion has helped them to build new revenue streams for them to leverage and also diversify the economic risks that is associated with a business. Now, all of this has evidently resulted in a high level of customer satisfaction among the existing customers and upholding of the strong brand equity that they have. All of this factors only help reiterate the point that they enjoy guidance of an experienced management team who have effectively guided the company over the years and continue to do so.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Increasing the environmental sustainability of products: With all the increase in need for producing sustainable products, the fashion industry has made it their prime agenda to focus on eco-friendly products in eco-friendly ways. GUESS has an immediate goal to achieve 20% of global materials portfolio to be certified sustainable by 2021 and they plan to do it by considering the environment throughout the product lifecycle—from design and materials selection to end-of-life. The company has launched its new customer recycling program in all the U.S. stores, called the “RESOURCED”. The company even has plans to expand it to three additional markets that are currently underway. It has also started to promote circular fashion through product buy-back and resale by launching the GUESS Vintage product line.

2. Implementing sustainable sourcing policies: The main raw material for jeans is cotton, which is a highly resource intensive product, and due to climate change, its yields have been affected adversely. As a result, the demand for cotton is decreasing. In 2019, the company has launched their GUESS Responsible Sourcing Policy on Cotton, to increase procurement of preferred cotton sources and simultaneously working to improve traceability and avoid prohibited cotton sources from entering the supply chain. They even implemented the GUESS Responsible Sourcing Policy on Manmade Cellulosic Fabrics, from 2018, to ensure the ethical sourcing of certain rayon/viscose, modal, and lyocell fabrics, which are linked to the destruction of endangered forests. GUESS is also trying to increase the amount of man-made cellulosic which is being sourced from sustainably managed forests, closed loop systems and innovative material sources by partnering with innovative companies, suppliers, and organizations.

3. Increase in environment friendly practices in operations: Citizen’s and government’s growing concern about the environment is forcing companies adopt cleaner eco-friendly operating processes. GUESS is no exception ad hence the company aims to integrate sustainable practices into their operations by focusing on product responsibility, being good water stewards, and slashing their greenhouse gas emissions by a significant amount. They have committed to adopt water-saving denim technology and manage environmental impacts on the supply chain in their suitability report. Even they aim to reduce their greenhouse gas (GHG) emissions by 15% within 2021.