Toys R Us is a baby products, toys, and clothes manufacturing American multinational company. Charles Lazarus founded the toy company in 1948. The company has established a very large network of 450 stores in over 38 countries across the globe. Today, we’ll discuss the PESTLE analysis of Toys R Us; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Toys R Us
Some of the main political factors in the Toys R Us PESTLE analysis are as follows;
I-Government Regulations
The government regulations are very strict and tough for baby products and toy manufacturing companies like Toys R Us. The reason for strict policies is to ensure the health and safety of children, learning, and educational toys to boost their learning skills and others. Regulatory compliance would help the toy brand to perform its retail operations smoothly.
II-Trade Policies
Toys R Us is operating its business in over 38 countries across the world. The company outsources its production and manufacturing operations from China and other Asian countries. The US government and China have conflicted diplomatic relations, and they impose various types of legal and regulatory restrictions to reduce imports and exports from particular countries.
III-Political Stability
A stable political environment plays a key role in the growth of businesses and companies. Toys R Us sources raw materials and supplies from various countries across the globe. However, when the country is going through political turmoil, roadblocks, and other violent activities, then its disrupts the availability of raw supplies to the production and manufacturing facilities.
Economic Factors Affecting Toys R Us
Some of the main economic factors in the Toys R Us PESTLE analysis are as follows;
I-Diverse Revenue Sources
Toys R Us has a very large product and goods portfolio, and the toy brand earns income and revenue from multiple sources. It puts great responsibility and pressure on the company to carefully analyze the growth and sales of all the products separately.
II-Large Network
Toys R Us has established a very large network of over 451 retail chain stores in approximately 38 countries across the globe. The company earns revenue in multiple currencies, and the currency exchange rate market is highly volatile and it keeps changing its value due to various factors. A small change in exchange rate would increase the cost and expenses of the company.
Social Factors Impacting Toys R Us
Some of the main social factors in the Toys R Us PESTEL analysis are as follows;
I-Changing Customer Preferences
The needs and preferences of the customer market keep changing due to various factors. Kids and parents are showing great interest in digital games, and they’re much cheaper and user-friendly. However, parents don’t have to buy toys every few months; one digital screen would be sufficient to play various types of games.
II-Shopping Trends
Online shopping trends have been increasing significantly in recent years. In order to keep up with the growing interests of customers, Toys R Us has developed a very large e-commerce platform and online store. It allows the customer to shop and place orders online, and the company would deliver the required and desired product toys to their home address.
III-Customer Satisfaction Level
Toys R Us offers a variety of products, toys, and services to customers along with online shopping and home delivery service. Quality baby products and services would help the toy brand to improve its customer satisfaction level.
Technological Factors Affecting Toys R Us
Some of the main technological factors in the Toys R Us PESTEL analysis are as follows;
I-E-commerce Platform
Toys R Us has invested a significant amount of capital in the technological development and building of an e-commerce platform. It runs parallel to the physical network of stores, and it allows the company to offer online shopping services to digital users. The online store and e-commerce platform have contributed significantly to increasing the sales of the company.
II-Buy Online, Pickup at Store
Along with the e-commerce platform, Toys R Us has launched a new concept of allowing customers to shop online and pick up at stores. It is a new concept of shopping and it helps customers to browse a vast variety of baby products and toys online. After finalizing the product, they could pick up the product at the company’s nearest chain store.
III-Connected Inventory
Toys R Us has launched a new system of shipping products and goods from the stores to the customer’s address, instead of inventory and warehouses. In fact, the company allows customers to pick up from the nearest stores to reduce the delivery charges and the transportation time.
Legal Factors Impacting Toys R Us
Some of the main legal factors in the Toys R Us PESTEL analysis are as follows;
Regulatory Compliance
Toys R Us needs to comply with the regulatory requirements of different countries. They comprise kids’ health and safety regulations, patents, IPRs, trade policies, government regulations, taxation, import and export policies, and other legal requirements. The regulatory compliance would help the toy brand to smoothly perform its operations without any delays and disruption.
Environmental Factors Affecting Toys R Us
Some of the main environmental factors in the Toys R Us PESTEL analysis are as follows;
Sustainability Initiative
Toys R Us should make a strong commitment to environmental sustainability. They comprise organic and biodegradable plastics and packaging material, renewable sources of energy at its stores, and lower transportation. Environmental sustainability initiatives would help the company to keep up with the growing sustainability trends.
Conclusion: Toys R Us PESTLE Analysis |PESTEL Analysis of Toys R Us |External Environmental Analysis of Toys R Us | Strategic Analysis of Toys R Us
After an in-depth study of the pestle analysis of Toys R Us; we have realized that Toys R Us is the world’s leading retail chain toys brand. If you are learning about the Toys R Us 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.
