Furniture outlines specific wooden tools and objects supporting and facilitating human activities like eating, sitting, working, storing, and sleeping. They comprise of objects like tables, chairs, sofas, stools, hammocks, beds, and others. The global furniture industry is worth more than 587 billion USD. Today, we’ll discuss the PESTLE analysis of Furniture Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Furniture Industry
Some of the main political factors in the Furniture Industry PESTLE analysis are as follows;
I-Trade Agreements
The trade alliances and agreements among different countries disrupt the business operation of furniture companies. For instance, a political conflict would make a country increase the trade tariff on the import and export of products and goods from a particular country. Furniture Companies should be aware of the trade agreements, alliances, and political conflicts among different countries to smoothly perform their business operations.
II-Government Regulations
The government regulations of different countries are diverse for Furniture Companies. In fact, some countries are imposing restrictions on tree cutting for Furniture Companies due to the growing forest restoration and environmental sustainability regulations. Furniture brands should be familiar with the wood and furniture regulations of different countries.
III-Political Stability
A stable political environment plays a key role in the smooth operations of Furniture Companies. For instance, political riots, conflicts, roadblocks, procession, and government instability would cause delays and disruption in the delivery of wood logs to the production facilities, and delayed delivery of finished furniture products to the end consumers.
Economical Factors Affecting the Furniture Industry
Some of the main economic factors in the Furniture Industry PESTLE analysis are as follows;
I-Lower Consumer Spending
Different political and economic factors impact consumer spending habits in different countries. The global economy has been going through an economic recession for the past few years. It caused a massive unemployment rate and lower purchasing power of people. When people have limited disposable income, they won’t spend it on luxury products.
II-Inflation
Inflation rate is the other main economic indicator and it outlines how much currency the particular country is printing. A higher inflation rate would decrease the worth and value of the country’s currency. As a result, it amplifies the price of retail products like furniture items, and they become unaffordable to many people.
III-Currency Fluctuation
Furniture Companies are operating their business in various countries across the globe. The currency exchange rate market is highly volatile and it keeps on changing its prices daily. For instance, a small change in currency exchange rate would increase the cost and expenses of raw materials and supplies, and negatively impact the company’s revenue and profitability.
Social Factors Impacting Furniture Industry
Some of the main social factors in the Furniture Industry PESTEL analysis are as follows;
I-Aging Population
The aging and elderly population has been increasing worldwide due to advanced and sophisticated medical and healthcare systems. Aged people want comfortable furniture to rest and perform their daily routine chores. It presents a great opportunity for the Furniture Companies to develop comfortable furniture items for elderly people.
II-Consumer Preferences
Consumer preferences and needs keep on changing depending on various factors. For instance, modern customers want multi-functional furniture due to limited space issues in big cities and higher housing costs. Furniture Companies should produce multi-functional furniture items to target the generation z and the millennial.
III-Cultural Attitude
The cultural attitude plays a key role in impacting the buying patterns and choices of customers. For instance, the furniture requirements of Indian culture would be completely different from the western. In fact, the city culture is different from the village culture and their furniture needs and requirements are different.
Technological Factors Affecting Furniture Industry
Some of the main technological factors in the Furniture Industry PESTEL analysis are as follows;
I-Robotics Technology
Robotics technology is highly beneficial to the production and manufacturing of furniture products. For instance, precise carving molding of furniture products haven’t been possible without robotic technology. Robotics technology has brought efficiency and reduced production time and labor costs.
II-Data Analytics
Data analytics technology is highly useful to Furniture Companies. It allows them to rightly predict the customer furniture demands and requirements; and develops unique furniture designs and styles based on customer needs and requirements. Most importantly, it helps Furniture Companies to avoid the stock-out problem during the season and over-stocking issues.
III-Advanced Technology
Furniture Companies should consider employing advanced technology like AI (artificial intelligence) and ML. It allows them to develop unique furniture designs and styles, achieve production efficiency, and reduce the wastage of resources.
Legal Factors Impacting Furniture Industry
Some of the main legal factors in the Furniture Industry PESTEL analysis are as follows;
Regulatory Compliance
Furniture Companies should comply with the regulatory requirements of different countries to smoothly perform their operations without any delays and disruption. For instance, they comprise of trade tariffs, import-export policies, government regulations, taxation, and other legal requirements. Regulatory compliance would help the company to earn the trust and confidence of customers.
Environmental Factors Affecting Furniture Industry
Some of the main environmental factors in the Furniture Industry PESTEL analysis are as follows;
Sustainability Initiative
Furniture Companies should make a strong commitment to environmental sustainability. It comprises of sustainable sourcing of wood logs without deforestation, protecting the wildlife and trees, and complying with environmental sustainability regulations. The environmental sustainability initiative would help the company to amplify its customer market reach and network.
Conclusion: Furniture Industry PESTLE Analysis |PESTEL Analysis of Furniture Industry |External Environmental Analysis of Furniture Industry | Strategic Analysis of Furniture Industry
After an in-depth study of the pestle analysis of Furniture Industry; we have realized that Furniture items are essential for our daily routine functions. If you are learning about the Furniture Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
