PESTEL Analysis
The PESTEL analysis is an important and widely-used tool for understanding the big picture of a firm’s external environment. PESTEL is an acronym for the political, economic, socio-cultural, environmental, and legal environment in which a firm operates. The benefits of the PESTEL analysis are that it helps identify potential environmental influence, helps better understand existing opportunities and threats, and helps understand market growth and decline.
Political
The political environment has an influence on business. Political factors need to be considered when viewing the external environment. According to Binstock, “Clorox is voluntarily converting its plants in the United States to safer chemical process in order to protect against disasters and terrorism” ( 2010). More than 200 chemical facilities across the U.S. have converted to safer chemical processes. In the same article, it said that in 2006 congress passed a temporary law that bars the government from requiring disaster prevention. This is good publicity for the company and puts it ahead of its competitors if the government ever puts disaster prevention laws in to place.
Economic
Economic factors are important to Clorox because these factors affect the company’s profits. Clorox’s main economic concern appears to be increasing raw material cost. “Significant increases in the costs of energy and transportation, including the cost of diesel, or of key raw materials, including, but not limited to, resin, chlor-alkali, sodium hypochlorite, corrugate, agricultural commodities and other raw materials” (Clorox, 2010). A rise in the price of raw materials could force the company to raise prices to keep making a profit. A struggling economy could reduce consumer spending. “Sales totaled $1.27 billion, down 2.8 percent from the same quarter a year ago” (Avalos, 2010).
Socio-cultural
Today’s consumers are very environmentally conscious. The company is taking advantage of this by producing environmentally friendly products. The company has increased its profits through the sales of its Green Works product line. According to an article from the San Francisco Chronicle “…research says that Green Works accounts for about half that $100 million annual market for eco-cleaners” (Said, 2010). Customers like company that give back to the community. Clorox does this through the Clorox Foundation.” The mission of The Clorox Company Foundation is to improve the quality of life in communities where Clorox employees live and work” (Clorox, 2011).
Technological
Technology factors play a major role in what opportunities a company faces. “The Company has outsourced a significant portion of its information technology activities to Hewlett-Packard, including its data centers, which are primarily located in Alpharetta, Ga.
Air Canada assure the consumer's that it's price the best in the region as it states, "Stop searching far and wide. You’ll always find the lowest Air Canada prices right here on aircanada.com.
Green washing: The disinformation disseminated by an organization so as to present an environmentally responsible public image. In order for big companies to stay on top of the market today, they are forced to think of advertising strategies to help their public image and advertise their product. Over the years the system has become very complex and also very questionable. Companies are willing to lie, change their logo, and sometimes even their company name just to keep their name and image clean in front of the public just to make sure that they are making their money. Green washing helps this by advertising to the public that they are environmentally supportive and responsible. Most people that are into buying “green products” do not even realize that the company they are buying from is green washing in some sort of way just so that they can attract attention to the public. Green washing companies may advertise that they are “eco-friendly”, but when it comes down to it, the facts hidden behind the curtains beg to differ. Just like in the green washing video we watched in class, the companies may look great compared to the worst companies, but that does not mean what they are doing is still productive for our environmental movement. One company that has been notorious for their green washing efforts for the past couple of decades is the Oil/energy company: British Petroleum a.k.a. Beyond Petroleum. They are one of the world’s largest leading oil companies who has also becoming a large energy supplying company with presence in petrochemicals, gas, and solar divisions. Over the past twenty years BP has been the cause of several deadly disasters in the oil business in the U.S. and around the world. Despite their green washing effor...
PEST (political, economic, socio-cultural and technological) is a framework of macro environment factors used in the environment scanning component to analyze the impact of these factors on an industry. Canada post is under pressure from all the above forces and ultimately these have direct influence on organization ability to achieve its goals and their strategy
I think it is wise for the board of executives to take an active role in coming up with a system to evaluate their products. This evaluation system is considered a function strategy. In our text, it tells us that functional strategies consist of production procedures, advertising, product research, product development, personnel, economic, and support. (Coulter, K. 2013, p. 7) Due to the fact that Clorox has a wide range of products that are very diverse, it is important for them to evaluate them based on the current market. This strategy has allowed the company to evaluate the value of the products before resulting in a price increase or decrease. Clorox made a competitive strategy when they decided to go green. This was during the period when the company was going through leadership shift and the CEO thought
To develop Dow Chemicals new strategy, which is to say to develop a competitive advantage within their selected market, Dow Chemical appears to have thoroughly examined their role in the macroenvironment, which also encompasses the political/legal, technological, demographic, social, and macroenvironments elements. In analyzing their macroenvironment they would have considered such items as the current economy interest rates, currency exchange rates, and inflation rates, which could impact the customer demand for their products, as well as acting on other environmental factors such as:
This case focuses on corporate obstacles to pollution prevention. Pollution prevention can complex especially for large corporations. There are many different forms of pollution prevention including emissions control devices and incremental changes in existing technology. The author reviews the impact of emissions controlled devices, however the focus of the case study is on incremental changes in existing technology. Incremental changes include substituting one or two steps in a production process or relationship changes between production steps. One example of incremental changes that was provided by the author was eliminating chlorofluorocarbons and saving energy by replacing a refrigeration process with a heath exchanger that can exploit waste cooling from another part of the process. There are three critical decision-making stages for incremental changes; identifying a pollution prevention opportunity, finding a solution appropriate to that opportunity, and implementing that solution. The author discusses the three aspects of an organization (culture, ability to process information, and its politics) and how they impact the decision-making stages.
Continuous monitoring of these variables is an important marketing function. As a corporation today, Ecover is also sensitive to macro environmental changes. Some of the PEST factors that affect Ecover are discussed below. Political: The 'Po Marketing strategy is deeply affected by political trends.... ...
PEST Analysis of Sony Pest analysis is another marketing tool. Pest analysis examines the changes in the marketplace caused by political, economic, social and. technological factors. Political factors change from one party to another who are in control. The sand is a sand. For example, rises in private healthcare and privatisations.
In order to identify the uncertainties in Shell’s far environment I decided to use a PESTLE analysis approach to the oil and gas industry.
Pestle analysis is the tool to analyze the external environment of the business. It takes the different factors according to which the opportunities and threats can be analyzed and the actions plan can be made.
A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T. is an acronym for the Political, Economic, Social, and Technological factors of the external macro-environment. Such external factors usually are beyond the firm's control and sometimes present themselves as threats. For this reason, some say that "pest" is an appropriate term for these factors. Let us look at the PEST analysis of the Indian aviation sector:
PESTLE analysis, which is sometimes referred as PEST analysis, is a concept in marketing principles. Moreover, this concept is used as a tool by companies to track the environment they’re operating in or are planning to launch a new project.product, or service etc.
Green cleaning products and procedures are becoming prominent as environmentalism becomes mainstream and new environmental regulations pass; businesses should keep in mind the benefits of being green. For all types of cleaning, there is an opportunity for businesses that use the new technology to advance over the many
The first phase of a strategic analysis, Macro Environmental Analysis, commonly referred to a PESTLE framework, is the assessment of opportunities and threats to the industry where the firm belongs that is outside the control of our industry. The PESTLE stands for Political, Economic, Socio-cultural, Technological, Legal and Environmental (Pestle-Macro environmental analysis, 2012), describes a framework of macro-environmental factors used in the environmental scanning component of strategic management, forming part of the external analysis when making a strategic analysis; it basically gives an overview of the different macro environmental factors that the company has to consider. Strategic PESTLE Analysis helps us identify the growth or decline tendencies, business position, possible threats, and direction for operation.
Technological change, change in economic climate, natural occurrences and such-like are matters that concern the macro-environment of a business. These external, uncontrollable, influences can and will impact hugely on the success or failure of a business. One of the tools that are applicable in considering these factors is PESTLE. Political; Environmental; Social; Technological; Legal and Economic considerations will need to be engaged in order to prepare the business for macro-environmental influences. For this reason, PESTLE will be the most appropriate tool to use to identify and outline the main macro-environmental factors that may affect my business.