This article covers the detailed PESTLE analysis of Brandix. It is a leading apparel manufacturer based in Sri Lanka, with operations in several countries including India, Bangladesh, Cambodia, and Haiti. The company was founded in 1972 by the late Deshamanya Ken Balendra, and has since grown to become one of the largest apparel exporters in Sri Lanka.
Brandix specializes in designing, developing, and manufacturing a wide range of apparel products for global retailers and brands. Their product portfolio includes activewear, intimate apparel, casual and formal wear, and accessories, among others.
The company’s success is attributed to its focus on quality, innovation, sustainability, and ethical business practices. Brandix has received numerous awards and certifications for its commitment to sustainability, including the prestigious ‘Sri Lanka National Green Award’ and ‘Global Leadership Award in Sustainable Apparel’ by the Apparel Export Promotion Council of India.
Brandix has a strong presence in the apparel industry and is considered a leading player in the global supply chain. The company has over 25 manufacturing facilities across the world, with a workforce of over 50,000 employees. It has also formed strategic partnerships with leading retailers and brands, including Victoria’s Secret, Marks & Spencer, and Gap Inc.
Overall, Brandix is a well-established and respected apparel manufacturer that is committed to delivering high-quality, sustainable, and ethical products to its customers.
PESTLE Analysis of Brandix
The PESTLE analysis of Brandix in the following section outlines the different factors in the external environment that have an impact on the way company is able to perform.
Political factors
Sri Lanka has been through a massive political crisis in 2022 which was an outcome of years of mismanagement by the government. The onset of this crisis has negatively affected the performance of various companies that were operating in the apparel manufacturing domain (Rodrigo, 2022).
The supply chain operations are also effected when there is political turmoil in a region. Political instability makes it difficult to access the raw materials, and also causes undue disruption in the export and import process. The Sri Lankan government had to alter the trading policies to make sure that the apparel segment continues to operate its supply chain despite the ongoing chaos.
Factors such as low supply of fuel, price hike of different raw materials and added expenditure due to rise in energy prices have been working against the profitability goals of the company. The management had to make efforts to remain profitable during the political conflict and the declining stability of the country.
The positive trade relation of Sri Lanka with other countries allows the company to manage its global supply of apparel. Brandix is managing business operations in developed countries such as the US, UK. Moreover, it is also has market presence in developing regions such as Bangladesh and India.
Economic Factors
The garment industry of Sri Lanka holds a central position in facilitating economic growth of the region. Role of Brandix in supporting the economic development of Sri Lanka is central as the company is making significant contribution to its GDP. The company has reported a turnover of more than $600 million on a yearly basis, indicating the strong financial performance.
However the economic issues arising out of the improper financial policies of the Sri Lankan government had pushed the country to the brink of bankruptcy. The economic shock had caused major disruption for the apparel industry as the operating costs had to be adjusted while balancing the negative impact of the declining economy and major power shortages.
Foreign exchange rates were unfavorable for the companies that required import of raw material from the other countries (Gunasekara, 2023). As a result, Brandix had to adjust its workforce leading to layoff of the workers. The slower production also threatened the risk of closure of some manufacturing units, as continuation of the operations was deemed as an unprofitable step.
Social Factors
The demand of a product is a driving factor behind the production of that specific item. When demand declines, organizations have to make decisions accordingly. The management at Brandix had made the decision of closure of 2 of its manufacturing units as their specific apparel products were depicting a steady decline in demand (Brandix, 2021).
The apparel items that are manufactured by the company are determined by the ongoing trends in the market. An increased focus on healthy life style has resulted in a higher demand of the products from the active wear range. Consequently, the companies that purchase that apparel items from Brandix placed larger orders with the company for active wear.
During COVID, a lot of people shifted to work from home as the lockdown made it difficult to commute to the workplace. This change has lead to an increased demand of casual wear and lounge wear. The company had received larger orders for the products in these categories due to an increased demand.
Technological Factors
The apparel industry requires the use of available technology to manage the manufacturing process of the different items and testing of fabric quality. Technology can also help in further improving the level of quality of the apparel. Moreover, it enables the management to create new designs and use R&D to benefit the company’s growth.
Having access to the right technology enables the company to manufacture the products, while maintaining fast paced production process. In addition, the use of analytics helps the management at Brandix to understand the shift in consumer trends (Brandix, 2021). The supply of raw material and its related manufacturing process can be managed accordingly.
Legal Factors
The company has to follow the employment laws of the country, including hiring, compensation practices and health and safety regulations. Brandix has faced issues due to labor protests due to the wages offered being less than the expected salary. However the company has claimed that the labor wage is aligned with the labor laws.
The company has also received criticism pertaining to the lack of implementation of COVID protocols. The workers at the Brandix owned factories continued to work despite depicting symptoms of the virus. The outbreak of COVID and poor management response resulted in investigation into the matter, considering it a human rights violation (Aneez, 2020).
Another area where the company faced legal crisis was its handling of the COVID outbreak in the factory. The access of the workers to the labor union was minimized and the labor rights were largely overlooked. The claims were later on challenged by the management and it was stated that there were no efforts to dismiss unionization or suppressing the labor concerns.
Environmental Factors
Brandix is making efforts to minimize its carbon footprint, along with shifting towards renewable energy sources such as biomass and solar energy. Moreover, the company is replacing the components that harm the ozone and incorporate non-CFC options instead. The company also shows its commitment to environment protection through LEED certification (Business Times, 2011).
Besides these steps, the management is also reducing the usage of blue water and integrating the recycled water as a part of the cleaner manufacturing process. Furthermore, waste recycling practices are also put in place as a part of the sustainability target. The discharge of dangerous chemicals is also an area where the environmental standards have been applied by Brandix.
Conclusion
Despite the political and economic crisis, Brandix has continued its business operations and maintained its profitability. The changing social trends and technology shape its manufacturing process, while legal regulations and environmental policies significantly affect the company’s operations.
References
Aneez, S. (2020). Garment workers on front line of Sri Lanka coronavirus outbreak Reuters. Retrieved from: https://www.reuters.com/article/us-health-coronavirus-sri-lanka-workers-idUSKBN27K08Z
Brandix (2021). Sustainability Report. Retrieved from: https://brandix.com/images/brandix-sustainability-report-2020-21.pdf
Business Times (2011). Brandix first apparel maker in the world to get ISO 50001. Retrieved from: https://www.sundaytimes.lk/110724/BusinessTimes/bt13.html
Gunasekara, S. (2023). Forex crunch hits international trade. The Morning. Retrieved from: https://www.themorning.lk/articles/183421
Rodrigo, P. (2022). For how long can Sri Lanka’s apparel sector protect itself from national crisis? Investment Monitor. Retrieved from: https://www.investmentmonitor.ai/features/sri-lanka-apparel-sector-national-crisis/