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PEST Analysis Political The luxury sector reacts negatively to political and economical crises. However, comparing to other sectors it recovers in a short period of time. Economical · Asia, which suffered from economic crisis in 1997-98, accounts for 40% of the market. · There is a rise in wealth in general and especially in America that represents 20% of the market. · The majority of the luxury goods companies are European and most of their costs are incurred in Euro or Swiss franc. On the other hand, most of their revenues are in Yen and US$ which affected their profits positively. · The demand for luxury products is inelastic and not influenced by inflation. Socio-cultural The market consists of two segments: · Japanese Females: 20-25 years old, who have high disposable income and buy the goods locally or during their intensive traveling. · Professionals and Executives: 30-60 years old, with annual salary above $100,000 who travel frequently. Technological The Internet has affected the luxury market by extending the Grey Market, by helping people to sell extra stock from wholesalers, second hand products directly from individual, counterfeited products, and original products at lower prices.
Approximate Word count = 650
Approximate Pages = 2.6
(250 words per page double spaced)
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