Financial Accounting > STUDY GUIDE > AbbasAsfia-PC4.docx Centennial College ACCT 112 (All)

AbbasAsfia-PC4.docx Centennial College ACCT 112

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To: Gertrude Huang From: CPA Re: Mod Threads Apparel Ltd. (MT) 1. PESTEL Analysis As per requested, below is the PESTEL analysis to present to the board of directors Political:  Canadian gove... rnment has proposed increased tariffs on imported goods from non NAFTA countries such as Bangladesh. This means that there is a chance that cost will increase for MT affect overall net income  Ontario government is considering increasing corporate taxes. This means that MT will have increased taxes to pay on their income. The higher the income, the higher the taxes. MT should consult their accountant to see if they can use any tax savings for medium size businesses. Economic:  Domestic apparel manufacturing industry is expected to decline as production is transferred overseas as labour costs are lower. This means that MT will struggle with production costs because most companies are producing goods in countries with cheaper labour to make their product price attractive and at the same time earn a profit. Whereas if MT is producing in its home country, then they have to abide to higher labour costs which will decrease their net income Social:  Social media influencers review clothing via social media has impacted consumer preferences. This means that MT needs to use the social media platform to advertise its clothing with good reviews to increase customer base. They can partner up with various bloggers who can use their clothes and market them to their own audience on social media  Popular influencer posted negative reviews about quality of MT’s latest collection when the pants purchased were destroyed in the first wash. This will display MT’s products in negative light because the audience can see that MT products are not good quality. Such review will decrease the revenue as less people will want to purchase MT’s products. Technological:  Adopting automation and new technological in supply chains. This will allow MT to speedup their production and have more inventory available for sale to the customers.  Use technology to produce high quality 3D images of finished products during design stage. This means that MT can produce high quality products for its consumers and get counter the n [Show More]

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