Friday, September 29, 2017

PESTEL Analysis

This analysis is done to understand the macro environment of a company and is supportive to 5C analysis context part. This analysis includes some investigation in Political, Economic, Social, Technological and Environmental Legal spheres. Let us discuss them separately:
Political factors influence upon the regulation of businesses questions that should be discussed are:
·         How stable is the political environment?
·         Will government policy influence laws that regulate or tax your business?
·         Does the government have a view on culture and religion?
·         Is the government involved in trading agreements such as EU, NAFTA or others?
·         Government and the health care
Economic factor has a great impact on a company and questions which should be discussed are:
·         Interest rates
·         The level of inflation
·         Employment level
·         Gross Domestic Product (GDP) per capita, etc.
factors vary from country to country:
·         What is the dominant religion?
·         Does language impact upon the diffusion of products onto markets?
·         What are the roles of men and women within society? Family structures?
·         Attitudes to health and food (eco, bio, diet etc. )
·         Social impact on demographic change
Technological factors are vital for competitive advantage and are major drivers of globalization:
·         Does technology allow for products and services to be made more cheaply and to a better standard of quality?
·         How is distribution changed by new technologies e.g. books via the Internet, flight tickets, auctions, etc?
·         Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc?
Environmental & legal factors include several aspects which have important impact on a company
·         Consumer protection laws
·         Legislation on drugs
·         Anti-Pollution law
·         Availability of raw materials
·         Social attitudes to the environment

This all aspects are vital for company survival and development that is why they should be carefully examined and included in a strategic planning process. 
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