Explore the comprehensive JYSK PESTLE analysis, uncovering the vital external factors influencing this retail leader's strategy and success. Gain valuable insights into the Nordic retail landscape.
Are you looking to buy top-quality home products at reasonable rates? If you are, you should drive off to your nearest store Jysk.
Jsyk is a retail store chain that sells many home products such as furniture, mattresses, bedsheets, bathroom products, etc. Jysk is a Danish retail chain. However, now it has expanded its operations overseas as well.
Since Jysk is one of the biggest retail chains specializing in home products, today, we will conduct the PESTLE Analysis of Jysk to see what external factors impact the brand's operations.
Before we proceed further and conduct a Jysk PESTLE analysis, we need to know the history of the famous retail chain.
Jysk was established by a man named Lars Larsen in 1979 in Aarhus, Denmark. He opted for the name "Jysk" since it is a word in the Danish language. The brand started by selling good-quality household goods with Scandinavian designs.
The products of Jysk soon gained tremendous popularity due to their designs and quality. Jysk expanded and opened its branches across Denmark. However, to meet the demand of international buyers, Jysk decided to go international.
The retail store opened its first international branch in Germany in 1984. In the coming years, Jysk expanded its operations to other European countries.
In 1987, Lars Larsen was among the first businessmen to use TV as a marketing medium. He marketed Jysk through TV televisions, which further increased the demand for Jysk.
Besides marketing, Lars Larsen also made the brand famous by doing social work. He became the main sponsor of the Danish Disabled Athletics Association. This made Jysk even more popular.
In 1992, finally, the retail chain arrived at the US shores. The people of the US loved the products of Jysk. The brand kept on spreading its operations in different countries.
Currently, Jysk has more than 3,300 stores in 48 countries across the globe. The retail chain has the most number of stores in Germany. It has 961 stores across Germany.
To run so many stores in different parts of the world, Jysk requires a lot of employees, which is why the brand has employed more than 30,000 employees across the globe.
Moreover, since the retail store works in different parts of the world, it generates enormous revenue from every country. In 2022, Jysk managed to generate around 36.23 billion Danish Kroner.
Now that we have discussed the history and operation of Jysk. Let's proceed further and discuss how different external factors impact the operations of Jysk.
To find that out, we have to conduct a PESTLE analysis. Are you aware of what PESTLE analysis is? If not, don't worry; we will explain.
PEST analysis is a tool businesses use to examine how different political, environmental, economic, social, technological, and legal factors impact a company's operations.
In today's PESTLE analysis, we will look at how various external factors impact the operations of Jysk. So, let's proceed and discuss how different political factors affect Jysk.
Political Factors That Impact Jysk
Political factors are the factors that are linked with the local and international political situation. In this section, we will discuss what political factors impact the operations of Jysk.
Every government sets tax policies that are either in favor of businesses or not. If the government gives tax concessions and lowers the tax rates on companies, such policies are liked by businesses.
Similarly, suppose the countries where Jysk operates announce low tax rates on retail chains. In that case, Jysk will generate higher profits, significantly impacting the home goods retailer.
On the contrary, if the governments impose a high sales tax or increase the tax rates for retail chains, Jysk won't retain higher profits, and the business would suffer financially.
Political stability also has a significant impact on the operations of Jysk. In countries where there is political stability, people visit markets. As a result, retail chains generate revenue.
On the contrary, if there is political instability in a country, there are riots and protests, due to which the sales of retail chains drop. That's exactly how political stability impacts Jysk.
Moreover, in case of riots and protests, there is a high chance that a mob might attack the store of Jysk and damage its products. Hence, Jysk feels more safe to operate in a politically stable environment.
Besides that, political tensions between different countries also significantly impact Jysk. For example, the retail chain used to operate in Russia. However, Jysk had to permanently close its operations in Russia after the conflict between Russia and Ukraine to show solidarity with Ukraine.
By doing so, Jysk incurred financial losses and lost its market share in Russia. Hence, conflicts between countries impact Jysk negatively.
Economic Factors That Impact Jysk
Economic factors are the factors that are associated with the economy. Let's look at how various economic factors impact the operations of Jysk.
Interest rate is a key economic variable and greatly impacts businesses. If the interest rate rises in an economy, the cost of borrowing increases. On the contrary, if the interest rate falls, the cost of borrowing decreases.
Businesses often borrow money from banks for expansion. So when the interest rate rises, it gets difficult for businesses to pay back.
Like any other business, Jysk also gets affected by interest rates. The retail brand would prefer low-interest rates to easily borrow money at low rates.
Moreover, Inflation also impacts Jysk significantly. Inflation tells us how much the prices of products have risen in the current year compared to the previous year.
In case of high inflation rates, commodities in the market get very expensive. Hence, high Inflation impacts Jysk negatively since as the Inflation rises, the sales of Jysk drop because now few people can afford the products of Jysk.
Besides that, economic growth positively impacts Jysk because consumers' living standards and paying capacity rise in eras of high economic growth.
In other words, due to economic prosperity, the sales of Jysk will increase. This is why the retail brand prefers economic growth. On the contrary, during economic recessions, the sales of Jysk would fall, and the retail chain would suffer financially.
Social Factors That Impact Jysk
Social factors are the factors that are related to the culture and social norms of society. Social factors affect businesses significantly. In this section, we will examine how different social factors impact Jysk.
One of the key social factors that impact Jysk is the demographic factor. Jysk operates in different societies. The retail chain has to conduct market research to analyze the demographics of the society where it operates.
For example, in some societies, most people aged 27-60 will be married. In such societies, there will be high demand for the products of Jysk due to the nature of the retail chain's products.
On the other hand, in some societies, people might not have enough buying power to purchase the products of Jysk. Moreover, the demand for Jysk's products may also vary along with the ratio of genders in each society.
Furthermore, trends in home decoration can also impact the sales of Jysk. For example, suppose people in a country prefer furniture and home products of the same style Jysk sells.
In that case, the demand for Jysk's products will be high in such societies. However, if people don't like the designs of products sold by Jysk, the retail chain will suffer losses.
Technological Factors That Impact Jysk
Technological factors are the factors that are linked with technological advancements and innovation in the economy. Let's take a look at what technological factors impact Jysk.
E-commerce is one of the technological advancements that have occurred over the years. The emergence of E-commerce has revolutionized the retail industry.
Now, Jysk doesn't have to invest in opening retail stores in different parts of the world anymore since people can now order Jysk's products online through its online store.
E-commerce and online shopping have lowered the operational costs of Jysk since now it doesn't need conventional retail stores to attract consumers.
Other than that, Artificial Intelligence also greatly impacts the operations of Jysk. AI has allowed Jysk to amplify the users' experience by introducing chatbots on their website to facilitate the consumers.
Moreover, Jysk can also use data analytics to analyze the trends in the market. Moreover, they can also identify their targeted customers by using data analytics.
Furthermore, digital marketing has become the new normal. Businesses are abandoning conventional ways to market their products. Now, businesses market their products on social media platforms such as Facebook, Instagram, TikTok, etc.
Jysk is now also using the same social media platforms to market its products since they are more effective and less costly.
Legal Factors That Impact Jysk
Legal factors in the PESTLE analysis represent the laws in a country. Every business has to abide by the laws in the country where it operates; otherwise, the business might face penalties and bans. Let's take a look and discuss what legal factors impact Jysk.
One of the most significant laws that impact Jysk is labor law. Jysk has to ensure that all its employees are treated fairly and that no discrimination occurs with any of its employees. Moreover, Jysk also has to make sure that there are equal opportunities for all genders.
If Jysk fails to abide by the labor laws, it might have to pay heavy penalties and get banned in some countries.
Besides that, intellectual property laws also have a great impact on Jysk. These laws ensure that no business copies the design of any other product. Jysk must ensure that none of its products has the same design as any other product in the market, or it can face severe penalties.
However, Intellectual property rights also protect Jysk since it prohibits other manufacturers from copying the designs of Jysk's products.
Other than that, the data protection laws impact Jysk significantly. Jysk has to ensure that the data of its clients are safe. In case of a data leak, Jysk will be liable to pay heavy fines, financially damaging the retail chain.
Environmental Factors That Impact Jysk
Environmental factors are the factors that are associated with the environment. In this section, we will look at how different environmental factors impact Jysk.
Jysk is famous for its furniture and other products made of wood. However, due to excessive deforestation, the land with trees is shrinking. This will impact the manufacturing of wood-related products of Jysk significantly.
Moreover, sudden changes in rainfall patterns are causing yields of crops such as cotton to fall. Jysk uses cotton in a number of its products. The scarcity of cotton will impact Jysk negatively since it won't be able to produce cotton-related products.
Furthermore, the frequency of natural calamities is increasing due to global warming. Natural calamities impact Jysk negatively. They can disrupt the supply chain of Jysk, which can lead to shortages.
Moreover, storms, floods, and forest fires can also damage the stores of Jysk and the products in them. This will damage Jysk financially.
Jysk manufactures various products, and while manufacturing them, it uses different chemicals and dyes. These wasteful products are then disposed of.
Jysk has to be very careful while disposing of these harmful chemicals. If they are disposed of into nature without treating them, this can damage the natural habitat of different species.
Moreover, it can trigger environmentalists, who might protest against Jysk, damaging the retail chain.
PESTLE Analysis of Jysk: Final Word
Jysk is a famous retail chain across the globe that sells home products. The retail chain was established in 1979 in Denmark. From there onwards, the retail chain grew domestically and internationally.
Currently, Jysk operates in 48 countries and has more than 3000 stores. It has a large workforce, which helps the retail chain generate billions of dollars every year.
In today's article, we conducted a PESTLE analysis of Jysk. Through the PESTLE analysis framework, we explored how different external factors affect the operations of Jysk.
If you enjoyed this article and want to learn more about PESTLE analysis, look at more examples of PESTLE analysis.
