Political/ Legal:
The Apparel industry in general and particularly the Sweater industry is facing problems of declining sales and increased overheads. Steinhouse operates in the higher price band and this sector is dominated by named brands such as Polo and others and departmental stores and the customers prefer such brands over the lesser-known brands such as Steinhouse. Large retailers such as Walmart, prefer to buy directly in bulk from low wage countries such as Bangladesh, China and others. The US market has a very high potential and trade barriers are not present meaning that the company can sell their products freely in the market. They are also allowed to sell in Europe and sales would depend on their quality, brand and price.

Economic
The company has seen falling sales and sales have declined from 7.5 million USD in 1968 to 2.7 million USD in 1998 while the US sales alone were 2.4 million USD. From this figure, annual overheads, excluding management salaries would be about 1.2 million USD and there would be a margin of about 7.2 percent as sales commission. It can thus be seen that there is a reduction in the profitability of the company. The market is growing in US were the products can be sold but by using wool yarn of a higher gage . The sales people receive a commission of 7.2 percent on the gross sales that they bring in and travel and other expenses are not reimbursed. About 70% of sweaters are bought by Women for their husbands and boyfriends.
All sweaters for the fall line are 70% acrylic and 30 percent wool and this combination contributes 85 % to the annual sales while the spring verities are 50 percent acrylic and cotton. Since the company prints the word acrylic on the sweater label, customers perceive the sweater as inferior and hesitate to buy the product. All sweaters are done as per booked orders from the retailers and distributors and