PESTEL ANALYSIS

Political:

1. Due to operation in EU & UK, Silver Cross (SC) has to comply with EU & UK legislation and regulation.

2. SC will have to face different regulations and political regimes – some stable and supportive of business
others less stable and less pro business due to expansion in USA, South-east Asia, and Baltic states.

3. Adjustment to government taxation and trading policies in different countries of operation

Economic:

1. Economic recession may reduce spending on up market baby products and increase the demand for
second hand baby equipment.

2. Greater global competition is creating the need for differentiated products and offers opportunity to
increase market share for Silver Cross’ highly varied and differentiated products.

3. Steady growth in baby transport and nursery equipment market since 2003 and predicted growth has
helped Silver Cross to exploit this opportunity by expanding its distribution network and product range.

4. Estimated value of baby product market in UK is £1 billion which is the main market of operation for Silver
Cross and is predicted to rise.

5. High income elasticity of demand for premium baby products.

6. High consumer confidence – spending on expensive and high quality baby products.

7. Increasing fuel prices will drive up distribution cost for Silver Cross in UK & worldwide.

8. Exchange rates fluctuations will impact trading and transactions costs and make it difficult to forecast
revenue for Silver Cross in overseas market.

9. Silver Cross needs to consider export tariff for each export market.

Socio - Cultural:

1. Late parenthood & reduction in average family size in UK since 1950.

2. Increase in no. of multiple births due to clinical birth treatments as a consequence of late parenthood.

3. Increasing proportion of childless females.

4. Increasing style and fashion consciousness in the population.

5. Older, affluent, well-informed and style conscious parents spend considerably on differentiated and
stylish baby products.

6. Two-earner households – higher disposable income and higher consumer spending on baby
products.

7. Guilt spending by parents due to insufficient family time with children.

8. Frequent use of car and other forms of transport like buses, metro rails, air flights etc.
9. Increased consumer mobility for work & leisure activities has fueled the demand for baby travel systems
and other multi-purpose products.

10. Consumers are becoming tech savvy and there is growing communication between them through
blogs, forums, and social networking platforms about their needs, experiences, product information &
reviews.

11. Population is becoming more style conscious.

12. Greater awareness of an emphasis on philanthropic endeavours by both organizations and

consumers.

13. Baby boom in UK – increasing no. of babies less than two years of age.

14. Greater celebrity following due to media coverage – celebrity endorsements for baby products.

15. Impact of style conscious market on design and manufacture of baby products.

16. Greater emphasis on safety and quality standards.

Technological:

1. Enhancements in baby transport safety standards.

2. Increased access of consumers to broadband due to low cost and greater availability.

3. Rise of internet & online social media – increases brand visibility and awareness, provides product
information to customers, offers new and alternative promotion & communication opportunities through
integrated marketing campaign & helps in getting customer feedback.

4. Mining & warehousing of data from online content and other sources & increasing use of Marketing
Information System (MKIS).

5. Migration towards online retailing, EDI, and EFTPOS due to advancement in technology.

6. Use of IT based logistics systems for efficient delivery to wide distribution networks – 200 retail outlets in
UK & 260 Babies ‘R’ Us stores in US alone along with other countries of operation.

7. Use of highly mechanized and state-of-art machinery to automate the production process.

8. Technological innovation has enhanced the development of multipurpose products in baby transport
accessories and home care sectors.

Environmental:

1. Greater environmental concerns over production and manufacturing processes such as energy
consumption, emission & discharge, waste disposal, and recycling.

2. Greater legislation, regulation and conformance to standards with regards to impact on environment such
as UK Environment Protection Act and ISO 14000 certification.

Legal:

1. Silver Cross is a privately-owned company and therefore has limited liability.

2. Silver Cross owner William Wilson has over 30 patents registered to his name.
3. Increased emphasis on safety in baby transport market as a result of increased emphasis on health and
safety legislation in developed countries.

4. Increased regulation of advertising – especially when aimed at children – in developed countries like
Advertising Standards Authority (ASA) in UK.

5. Conformance with legislation and regulation of different countries of operation.

6. Operation in EU countries require conformance to EU legislations on trade practices, monopoly position,

environmental standards etc.

SWOT ANALYSIS

Strengths Weaknesses

1. Heritage background and endorsement 1. Presence in selected markets, yet to

from British royal family lends exclusivity to the
brand & also appeals to international customer
base.
2. Strong Brand Equity – stylish, safe, high
quality, innovative, contemporary and efficiently
designed products with a heritage background.
expand globally hence cannot take the
advantage of global reputation.
2. In spite of being present in many
countries Silver Cross still gets 80% of its
revenue from UK alone and very less from
other countries.

3. In-house designers and product 3. Low market share in nursery furniture

development specialists formulate specialized,
innovative and easy to use designs that is favored
by parents
4. Contemporary, fresh, aspirational and
stylized brand image – appeals to stylish, modern
and broad segment of parents in UK & worldwide.
5. Lifestyle range of Silver Cross’
contemporary baby product – launched in 2003
and has won many awards ever since.
6. Effective marketing communications -
print and online advertising campaigns, website,
participation in trade and consumer events, point-
of-sale promotions, PR activities and digital
media.
7. Popularity of brand with the celebrities
and word of mouth endorsement alongside
controlled official celebrity endorsement gets
Silver Cross positive PR and marketing coverage
without being labeled as unobtainable.
and equipment markets.
4. Trailing in brand share for premium
prams.
5. Silver Cross is lagging behind other
baby and nursery brands in social media
space.
6. Online retailing – suffers from lack of
specialized website services that offer new &
current parents expertise and help in making
online buying decision.
7. Lack of own specialist retail stores –
reliance on distributors for representing the
brand, customer service, customer feedback,
marketing & promotional support.

8. Dedicated marketing budget – 10 to15%

of annual revenue.

9. Significant investment in forward-

thinking and modernized new product
development.
 10. Transparent business conduct and direct
customer interaction – strong & honest customer
relationship.

11. Efficient and pro-active customer service

assist customers in making buying decisions.

12. Presence on the internet – user friendly

corporate website resonate the brand image,
online club – Your Silver Cross’ and forum helps
parents share their baby product needs and
product reviews, and acquire relevant product
information.

13. Specific targeting & profiling of

customers – data collected from online consumer
registration.

14. Well-thought-of, carefully timed and

appropriately channeled promotional campaigns
based on the brand image.

15. Multiple product lines – diversification

into multiple product areas insulates from the
vulnerability of falling out of fashion trends.

16. Movement in to modern product areas

with key focus on fashion – attracts modern
parents for whom fashion plays a key role in
choosing baby transport & other products.

17. Prestige pricing for the handmade

heritage collection gives the brand an authentic
and aspirational appeal whereas competitively
priced models bring in major percentage of
revenue.

18. Involvement in effective and transparent

CSR activities – supporting ‘The Meningitis Trust’

Opportunities Threats

1. Baby boom in UK. 1. Highly fragmented market – high

2. Older affluent parents with dual earnings
– more spending per child due to higher
disposable income & spending less time with the
children.
3. Well informed and fashion conscious
parents – demand for better-designed, superior
quality, better looking, stylized and safe products.
4. Increased consumer mobility – high
demand for mobile, lightweight, safe and durable
competition
2. Competition in nursery equipments
from global retailers like IKEA, Marks &
Spencer, Mothercare and specialist retailers
like Mamas & Papas.
3. Competition from Babies ‘R’ Us
through its unique product range and retail
outlets having logical sequencing of baby
essentials sections and in-store experts to
advice incoming parents.
baby travel systems. 4. Competition in premium pram
segment.
5. Predicted high growth of baby transport
market from 2% to 2.4% per year from 2008 to 5. Competition from many small, niche
2012, as per market research. manufacturers with online retail capability.

6. Predicted rise in retail sales of nursery 6. Own-name in-store nursery

products from £133 million in 2008 to £149 million
in 2012 – a profitable area for Silver Cross to
focus its marketing activities.
7. Overall high growth of baby product
market predicted by Mintel to touch £753m by
2013.
equipments marketed by giant supermarket
chains (Tesco, ASDA & Sainsbury) in UK.
7. Competition from mass market
products with research indicating that
supermarkets are being increasingly common
place to buy baby products.

8. Collaboration with Babies ‘R’ Us to 8. High main media advertising

expand in US market as well as expansion plans expenditure from competitors like Chicco,
in Europe and Asia-Pacific. Mamas & Papas in last few years.

9. Increasing consumer interest in CSR 9. Declining trend in number of children

credentials of organizations – Silver Cross can per family in UK from 1950 onwards.
involve in variety of CSR activities apart from
supporting ‘The Meningitis Trust’ which can boost 10. Increasing proportion of childless
its image on all aspects of its business. woman.

10. Foray into social media like specially 11. Increasing preference of parents for
designed ‘Days Out’ site for parents, presence on second-hand well maintained baby
Facebook helps parents to interact, share ideas & equipments.
product reviews, and get appropriate information
regarding their baby product needs from each 12. Economic recession – reduced
other & with Silver Cross. disposable income and job insecurity will result
in decline in demand for up market baby
11. Plans to use ‘Days Out’ site for targeted products and increase the demand for second
email marketing to its registered users. hand baby products.

12. Integrated marketing campaign provide 13. Social media though brings lot of
customers with product information, reviews, advantages to the brand but at the same time
usage experience, comparisons and updates can quickly dispense any negative publicity
about the same.
13. Digital media platform provide
opportunity to Silver Cross to build brand
strength, increase brand awareness and deliver
the brand message effectively to existing and
potential customers.