Mac Cosmetics is a beauty and cosmetics products manufacturing Canadian multinational company. Frank Angelo Vee and Frank Toskan founded the cosmetics company in 1984. The company has established a network of approximately over 500 stores in various countries across the globe. Today, we’ll discuss the PESTLE analysis of Mac Cosmetics; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Mac Cosmetics
Some of the main political factors in the Mac Cosmetics PESTLE analysis are as follows;
I-Government Regulations
The consumer protection government regulations are very strict and tight for beauty and cosmetics companies like Mac Cosmetics. They focus on areas like health and safety laws, labeling, packaging, ingredients disclosure, no animal testing, labor laws, production and manufacturing, and ethical sourcing of raw materials. However, the objective of strict laws is to ensure the health and safety of ordinary consumers and avoid any hazardous allergies to the skin.
II-IPR and Patent
Counterfeiting is a serious concern in the cosmetics and beauty market. Mac Cosmetics should make sure to earn the patent and IPR of its beauty and cosmetics products and renew its licenses on time to avoid counterfeiting. Otherwise, some other brand would copy the product rebrand it under their name, and steal the market share.
III-Political Stability
Mac Cosmetics procures material and ingredients from various countries across the globe. That’s why the stable political environment of the country plays a key role in the growth of businesses and companies. In case of political instability due to roadblocks, procession, and other violent conflicts, then it disrupts the flow of the supply chain and distribution of raw materials and ingredients to the production facilities.
Economic Factors Affecting Mac Cosmetics
Some of the main economic factors in the Mac Cosmetics PESTLE analysis are as follows;
I-Economic Growth
The economic growth of the country directly impacts the growth and retail sales of Mac Cosmetics. For instance, if the country has a stable economic environment, multiple employment opportunities, and people would have stable and disposable income. When people have sufficient disposable income, they’re willing to spend it on luxury products like beauty and cosmetics items.
II-Currency Exchange Rate
Mac Cosmetics procures raw ingredients and materials from various countries in multiple currencies. The currency exchange rate market is highly unstable and it keeps fluctuating due to multiple factors. However, a small change in currency exchange rate would increase the cost and expenses of the cosmetic brand, and negatively impact the company’s revenue and profitability.
III-Expensive Raw Material
The cost of raw materials, ingredients, and supplies for cosmetics products has been increasing a lot in recent years. It is due to multiple factors like higher sourcing costs, amendments in the labor laws, increasing fuel prices, and various other miscellaneous expenses. They have increased the overall raw material and labor costs and expenses.
Social Factors Impacting Mac Cosmetics
Some of the main social factors in the Mac Cosmetics PESTEL analysis are as follows;
I-Multiple Beauty Standards
Mac Cosmetics is operating its beauty and cosmetic business in various countries across the globe. There are multiple beauty standards in various countries due to socio-cultural differences. The cosmetic brand should be familiar with the changing beauty standards of various markets and offer them the most relevant product, and it allows them to increase their network and sales.
II-Inclusive Campaign
Many beauty, cosmetic, and fashion brands are running inclusive marketing campaigns with the objective of beauty and fashion for everyone. Mac Cosmetics should include multiple shades for every skin tone to target various segments of the customer market. It allows the company to amplify its customer market reach with inclusive beauty and cosmetic products.
III-Clean Beauty Trend
The consumer market has become highly cautious about their health, clean beauty, and skin care. They don’t want their skin exposed to chemically treated cosmetics products; rather they want organic and natural ingredients applied to their skin that would have no side effects. Mac Cosmetics should offer natural and organic beauty products to keep up with the growing clean beauty trends.
Technological Factors Affecting Mac Cosmetics
Some of the main technological factors in the Mac Cosmetics PESTEL analysis are as follows;
I-E-commerce Platform
Mac Cosmetics has invested a lot of resources and efforts in the development of its e-commerce platform and online store. It allows the beauty and cosmetics brand to offer its products online to the digital customer market and keep up with the growing online shopping trends. As a result, the company’s e-commerce has generated a significant amount of sales for the brand.
II-AR and VR Technology
Mac Cosmetics is investing a significant amount of capital resources in AR and VR technology. It allows the company to offer customized beauty and cosmetic solutions relevant to the unique skin tones of the customers. The customized solution and personalized service would help the company earn the trust and confidence of customers.
III-Digital Marketing
Mac Cosmetics is investing a significant amount of capital resources in digital marketing campaigns. The company is employing social and digital media channels to reach new segments of the customer market. As a result, it helps the company to increase its network, sales, and revenue.
Legal Factors Impacting Mac Cosmetics
Some of the main legal factors in the Mac Cosmetics PESTEL analysis are as follows;
Regulatory Compliance
Mac Cosmetics should comply with the government regulations and policies of various countries. It comprises labor laws, labeling, packaging, ingredient disclosure, health and safety laws, consumer protection laws, IPR, patents, cybersecurity, and others. Regulatory compliance would help the company to amplify its customer market reach and sales.
Environmental Factors Affecting Mac Cosmetics
Some of the main environmental factors in the Mac Cosmetics PESTEL analysis are as follows;
Sustainability Initiative
Mac Cosmetics needs to make a strong commitment to environmental sustainability initiatives. It comprises investing in renewable sources of energy, ethical sourcing of material, and biodegradable packaging to reduce the carbon impact. However, it helps the company to keep up with the growing environmental sustainability trends.
Conclusion: Mac Cosmetics PESTLE Analysis |PESTEL Analysis of Mac Cosmetics |External Environmental Analysis of Mac Cosmetics | Strategic Analysis of Mac Cosmetics
After an in-depth study of the pestle analysis of Mac Cosmetics; we have realized that Mac Cosmetics is the leading beauty and cosmetic brand. If you are learning about the Mac Cosmetics 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.
