Titan is a renowned name in the luxury fashion wear industry in India. The company is famous for the manufacturing of high quality watches mainly which are available all across the globe. The PESTLE analysis provides an overview of the business environment being faced by the organization and the implications these business dynamics have on the company.

Political Factors

The company has been able to expand its operations into various countries, with the recent market entry in the Dubai. Having international presence indicates that the company has to deal with the effects of international political climate. The Russia and Ukraine conflict has resulted in lower level of sales achieved by the company as the customers refrained from making purchases.Besides the effect of the conflict on sales, the political turbulence can also lead to supply chain issues. The raw material which is required in the manufacturing of watches such as palladium. However, there has been no significant effect on Titan as the company continued to product the products across various categories.

The level of tax imposed also determines the degree of sales a company is able to manage and the revenues generated through those sales. Titan has been effected by the tax changes implemented by the Indian government as the rise in tax is likely to influence the watches segment. The 28% tax also indicates the threat of the watches being smuggled in the region (Govind, 2017).

The trading relations established with other countries are dependent on the policies adopted by the government. The distribution of the products by Titan is managed on a global scale, therefore, having positive trading relations are essential for maintaining supply chain and distribution operations in an effective manner.

Economic Factors

There are various factors that are a part of the economic environment of an organization, which have the potential to effect the sales and profitability of businesses. The growing rate of GDP of India is a notable indicator which implies that the economic prosperity holds business development prospects for the luxury fashion wear segment.

Inflation has been deemed as a threat for organizations as the increasing cost of raw material and fuel had impacted the expenses required to manage the production. Since Titan Company is mainly focusing on the high end products and charging a premium price for the different items, the effect of inflation is not significant on the profit and sales (Dutta, 2022).

The onset of the pandemic has created an adverse industry environment and the sales were significantly lowered during Covid-19. In addition, the rate of gold effects the jewelry segment of the organization as the changes in the price influences the pricing of the product range in this category, however, Titan has faced no major threat from the inflation and price hike.

Social Factors

The growing population in the upper socio-economic segment is a favorable trend for Titan as the products being sold by the company are targeting the customers in this strata. The improved financial status and stability suggests a higher tendency of the people to purchase luxury wear items. Likewise, the growing upper class population supports in generating higher sales.

The company sales are also effected by the trends and seasonal changes in consumer demand. The wedding season is a positive factor for the company as people make purchases from the jewelry range which adds to the profits earned by Titan. Furthermore, Valentine’s Day also leads to higher sales across the different product ranges, supported by the discount offers.

There are some other factors as well that create a massive change in the consumer behavior, as evident in the case of the pandemic. Covid-19 increased the sales made through the online platform while the company stores faced closure due to the strict lockdown across the country. As a result, the customers shifted to placing online orders for the purchase of the products (PTI, 2020).

Technological Factors

The technology growth has allowed the luxury fashion wear industry to experiment with the design process by incorporation of Artificial Intelligence as a part of R&D. The company has significantly benefited by using technology such as 3D scanning which has helped the employees in creating unique designs for the jewelry and eye wear by using prints inspired by nature (Adhikari, 2017).

The company has also invested in the development of new design and features for its watches segment. For instance, the inclusion of cellular technology and 5G as a part of the plan of making smart watches requires input from latest technology. Developing such watches indicates the potential technology has created for the growth of Titan Company.

Digital presence and online connection with the customers has been also a positive outcome of the presence of IT infrastructure in the country. Titan had to close the stores due to the pandemic, pausing the sales through physical outlets. In this context, sales via e-commerce increased which helped the company to generate revenues.

Legal Factors

The legal environment for Titan Company comprises of regulations that define the intellectual property, trade mark and business conduct. The legal dynamics also include policies related to employee management, and customer rights and data protection. Titan has to follow these guidelines to avoid legal issues.
The brand is dealing with challenges due to the issue of smuggling and sale of counterfeit products which continue to be available in the market due to poor implementation of legal framework and corruption in India. The company had to engage in legal proceedings against the businesses selling the counterfeit products (Balram, 2019).

Environmental Factors

Titan Company has been trying to adopt an environment friendly business operations through different activities. The management has integrated cleaner technologies which emphasize the goal of reducing emissions, along with adopting ‘reduce and recycle’ policies. In addition, the solar powered watch design shows sustainability based initiatives by the company.

Conclusion

Titan Company operates in a highly favorable environment as evident through the continued high sales and revenues achieved by the business. The pandemic has resulted in temporarily lower sales, however the company was able to withstand the effects of inflation. This suggests that the social and technological factors greatly support the business.

References

• Adhikari, A. (2017). Titan experimenting with Artificial Intelligence led product design. Business Today. Retrieved from https://www.businesstoday.in/lifestyle/off-track/story/titan-experimenting-with-artificial-intelligence-led-product-design-87817-2017-12-15
• Balram, S. (2019). Titan Company gets relief from Delhi HC against sale of counterfeit watches on Snapdeal. The Economic Times. Retrieved from https://economictimes.indiatimes.com/news/politics-and-nation/titan-company-gets-relief-from-delhi-hc-against-sale-of-counterfeit-watches-on-snapdeal/articleshow/71067706.cms
• Dutta, A. (2022). Inflation has failed to impact Titan’s business, says MD Venkataraman. Here’s why. Business Today. Retrieved from https://www.businesstoday.in/latest/corporate/story/inflation-has-failed-to-impact-titans-business-says-md-venkataraman-heres-why-346881-2022-09-10
• Govind, D. (2017). GST impact: Titan expects revenue from watch sales to remain flat in Q1. Live Mint. Retrieved from https://www.livemint.com/Industry/ZjxnuI1qz5TKIxfyD6bmoL/GST-impact-Titan-expects-revenue-from-watch-sales-to-remain.html
• PTI (2020). Titan says Covid-19 has a ‘severe’ impact on its Q4 revenues. Business Insider. Retrieved from https://www.businessinsider.in/business/news/titan-says-severe-impact-of-coronavirus-on-q4-revenue/articleshow/75060929.cms