MAS Holdings is a conglomerate and is a part of the Sri Lankan apparel industry. The company focuses on the manufacturing of lingerie, athletic wear, swimwear and adaptive apparel. The PESTLE analysis of MAS Holdings examines the different factors present in the external environment of the company and details the implications of these factors on the firm.
About MAS Holdings
| Category | Information |
|---|---|
| Headquarters | Colombo, Sri Lanka |
| Founded | 1987 |
| Industry | Apparel manufacturing |
| Revenue | USD 2.2 billion (FY 2020) |
| Employees | Over 100,000 |
| Factories | Over 50 in 16 countries |
| Brands | MAS Active, MAS Intimates, Amante, and others |
| Sustainability | Commits to sustainable and ethical business practices |
| Awards | Numerous industry awards for sustainability and ethics |
Political Factors
Political issues in Sri Lanka had created major disruption to the different sectors of the economy. Even though MAS Holdings did not report any significant effect during the political instability, the high degree of unpredictability could become a challenge for the company. The political crisis in the country has created moderate business risk for the business.
The company holds a significant position in the apparel industry and contributes to the economic activity of the country. The management has tried to play a role in exerting pressure on the Sri Lankan government to restore the political stability and address the concerns of the protestors (Srinivasan, 2022).
Sri Lanka has developed positive trading relations with the different countries, allowing MAS Holdings to connect with its leading apparel brands across the world. The company has been able to achieve significant exports, being highlighted as the Export Conglomerate of the Year. The favorable trading policies of the government have supported in this achievement.
Economic Factors
The currency devaluation and rising inflation have been two of the major economic challenges that MAS Holdings has been facing in the country. The increasing prices of raw material, along with the higher cost of energy has made it difficult to continue with the production process without revising the prices.
Due to the high inflation, the company had to make cost related decisions and also keep the prices within a reasonable range to remain relevant for its target market. In addition, the compensation offered to the workers had to be increased considering the rise in inflation. These factors have accumulated into the lower profitability for the company.
Energy prices and energy supply has also been effected due to the country’s political uncertain climate as well as the Russia and Ukraine conflict. Moreover, COVID 19 had further pushed the country into economic slowdown. The management at MAS Holdings had to deal with the issues pertaining to supply disruption and the increased cost of manufacturing.
As a result, the company has decided to lay off its workers to curtail the effect of negative economic environment on the business profitability. The employees were offered a voluntary retirement scheme, through which up to 4% of the workforce was decreased in the company (Perera, 2022).
Social Factors
The apparel companies have to take the recent trends and preferences into view while designing and manufacturing the different products. MAS Holdings takes the consumer preference into view as the brands that are supplied the different apparel related products need to remain aligned with the social trends.
People have become more focused on active life style, increasing the demand of sportswear. This has encouraged the company to expand its operations beyond the lingerie segment and invest into the manufacturing of athletic wear. The products are available in the international market, such as US and European regions.
Another way that the company has been able to use social factors to its advantage is through adaptive wear category. Products in this segment were launched to address the needs of the people with disabilities, indicating its focus on inclusivity. Along with its partner firm Slick Chicks, MAS Holdings is creating products that are aligned with the needs of this niche market (Abdulla, 2021).
Pandemic has also influenced the company’s manufacturing decisions. The management has identified the expected increase in the demand of Personal Protective Equipment (PPE) due to COVID. The operations have included the production of PPE and related apparel items to respond to the changes in the social dynamics.
Technological Factors
The availability of technology has supported MAS Holdings to produce apparel products that are in accordance to the quality standards and meet the expectations of the target market. For instance, Silicone Application technology allows the company to manufacture garments that bring comfort and quality to the users (MAS, 2023).
The company is using Artificial Intelligence tools to understand the needs and trends of the market and shape its operations accordingly. The use of AI is also evident in the design process as the digital twin (DT) technology helps the company to create improved collaboration with its partners. Technology has further benefited the company to maintain a high production capacity.
Legal Factors
The employment regulations are applicable on MAS Holdings, constituting the dimensions of worker recruitment, salary and equity. The company focuses on gender equality in the workplace and emphasizes on women’s empowerment, which is reflected through the 70% of the employees being females (MAS Holdings, 2021).
Furthermore, the company promotes the notion of meaningful employment through providing the workers with fair salaries and manageable work hours. The intellectual property laws are also relevant for the apparel manufacturer which offer the company protection against counterfeit products and maintain its position as a highly innovative organization.
Environmental Factors
Environmental factors are taken into consideration by the company throughout its operations. For instance, the production of fabric is using natural dye solution, to lower the harm caused to the environment by the chemical based dyes. The management is also shifting to renewable energy and better use of water as an indication of environment friendly business operations.
Currently, 57% of the energy being used by the organization is originating from renewable resources. MAS Holdings has also made its waste management process more eco-friendly and aims to improve the recycling initiatives further for solid and liquid waste. The company intends to rely on reuse or recycling processes for the non-toxic waste produced during operations (MAS Holdings, 2021).
Conclusion
The external environment for MAS Holdings is moderately favorable. There have been political issues and economic crisis in Sri Lanka that has negatively affected the company operations. However, the management has been able to respond to these threats effectively and retain a significant position in the apparel segment through innovation and eco-friendly initiatives.
References
- Abdulla, H. (2021). MAS makes foray into adaptive wear. Just Style. Retrieved from: https://www.just-style.com/news/mas-makes-foray-into-adaptive-wear/
- MAS (2023). A Vertical Ecosystem beyond Needlepoint. MAS Holdings. Retrieved from: https://www.masholdings.com/what-we-do/technology/
- MAS Holdings (2021). Impact Report. Retrieved from: https://www.masholdings.com/wp-content/uploads/2023/02/MAS-Imapct-Report-2021.pdf
- Perera, W. (2022). Sri Lankan apparel workers hit by major jobs and wages cuts. World Socialist Web Site. Retrieved from: https://www.wsws.org/en/articles/2022/11/17/wraf-n17.html
- Srinivasan, M. (2022). Sri Lanka’s big businesses mount pressure on govt. The Hindu. Retrieved from: https://www.thehindu.com/news/international/sri-lankas-big-businesses-mount-pressure-on-govt/article65360154.ece