essay on pestle analysis

Guide on How to Write PESTLE Analysis

Nowadays, almost every company can operate in any country, thanks to internationalization and globalization. However, there are certain conditions to consider before opening a branch in a new place. You may have heard few variations of analysis' name: PESTEL, PESTLE and PEST. PESTEL or PESTLE is the same, and this analysis concerns political, economic, social, technological, legal and environmental aspects. A PEST analysis covers all the factors mentioned above, apart from legal and environmental aspects. This article from EssayPro contains an extensive guide on the PESTLE analysis, which is fundamental for understanding the possibilities for entrepreneurship in a country.

Whenever you carry out the PESTLE analysis for business, you automatically get acquainted with the chosen place's peculiarities. If top managers research beforehand, they might face severe consequences like low profits or even the inability to work under certain circumstances.

What Is PESTEL

Everybody would probably agree that interest rates or health and safety laws affect business regardless of its field and other specific characteristics. Also, political instability can cancel out a country's positive aspects of high technological awareness. Moreover, inflation rates and buying trends determine the decisions of a business owner who does strategic planning.

All of the factors mentioned above are a drop in the business environment. To avoid chaos, scientists systematized the determinants of the climate where a business operates. Hence, every PESTLE analysis example becomes a detailed critical analysis of the company’s surroundings that affect its performance.

What Are the Components of the PEST

The more concise version of PESTLE (PESTEL) analysis is PEST. Although it covers fewer internal and external factors, it still gives factual information about the following determinants:

• Political factors

Indeed, political factors are one of the first to consider when entering a new market. If a country can boast its political stability, it instantly becomes attractive to numerous investors worldwide. An entrepreneur wants to be sure that the current government is interested in creating a safe environment for foreigners.

• Economic factors

The second influential segment includes economic factors. Everything from interest rates and exchange rates to the percentage of annual economic growth and trade tariffs has an impact. So, naturally, economic instability scares away potential investors.

• Social factors

Next, a company’s management assesses social factors. Here, aspects like population growth rate, health consciousness, or age distribution determine the appeal of the business environment. The enterprise needs lots of skilled workers and potential buyers to operate successfully.

• Technological factors

Why do technological factors matter for businesses? Let’s say that a company originates from a country where many new technologies, like artificial intelligence, are usual. Adjusting to the new environment could be complicated if the firm chooses a place with fewer technology incentives.

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What Is PESTLE Analysis Used For

PESTLE analysis helps calculate possible risks and profits. First, political factors determine whether the country is open to new ventures. Second, economic factors show how prosperous the place is. Third, the category of social factors reflects the demand for a product or service. Finally, the level of technology and legal factors demonstrate how climate change or global warming might affect your business decisions.

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PEST Analysis Examples

Are you looking for a sample paper on PESTLE factors? Here, you can find a suitable PESTLE analysis template highlighting a business's economic, social, technological, legal, and other factors. Generally, a high-quality PESTLE analysis example includes consumer protection laws, employment laws, or corporate social responsibility. In the current economy, strategic thinking is a good competitive advantage for every specific business. Indeed, all PESTLE components help better understand buying habits, trade restrictions, technological change, etc.

PESTLE Analysis of Apple

Strategic decision-making for a technological giant must include examining political, economic, social, and technological factors. Undeniably, the PESTLE analysis of Apple helps to build a proper business plan for operating in other countries like China.

Political stability is one of the essential components of the external environment. While Apple has zero issues with safety regulations or fiscal policies, it may suffer from international conflicts. The trade war between China and USA perfectly illustrates how governments affect companies’ performance. First, China's decreasing scale of cheap manufacturing leads to higher production costs. Also, both countries raise import taxes, that increase the product cost.

Since Apple products are on the pricey side, determinants like economic growth and purchasing power are important for successful ventures in foreign countries. Nowadays, Asian countries like China demonstrate stable growth of gross domestic product and increasing buying power of their citizens. Consequently, opening new branches in prosperous places might increase profits.

Another component of PESTLE analysis for business are social specifics of the target country. For instance, in places like China, population growth rates exceed expectations. Therefore the enterprise gets enough workers and consumers. Moreover, Apple’s marketing efforts make people perceive their products as luxury. So, the buyers’ desire to show high status can boost the demand among the Asian population. However, the US trade war with China may also negatively affect Apple sales.

The next segment of the PESTLE model covers technological advancements. For Apple, external factors like the level of technological development are critical. Companies like Samsung, Xiaomi, and Lenovo fight for bigger market shares by implementing innovations. At the same time, Apple barely comes up with anything revolutionary in their gadgets, so their target audience often chooses other brands.

• Legal factors

The legal macro environment often includes safety laws or patent laws and other legislation regarding any business activity. Apple has a strong brand, so to maintain a good public image, this company avoids getting into law scandals. Still, this business takes risks by working with music and software that has copyright and patent protection. In case of a lawsuit, the loyalty of Apple customers may suffer drastically.

• Environmental factors

The final segment of the PESTLE analysis studies environmental issues like climate change or environmental regulations. For instance, Apple can generally withstand global warming or other weather changes by placing its factories in safe areas. However, the strict environmental policy of countries like China makes Apple make environmentally friendly choices in its production processes, like ditching lithium batteries. This way, the brand can maintain an even better reputation in the target country.

Overall, the PESTLE analysis has shown the aspects of the macro environment that affect Apple’s performance abroad. In addition, the examination has demonstrated both drawbacks and advantages of the company’s policy. Although Apple has to adjust to the changing environment to stay relevant, it still has multiple strong sides.

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McDonalds PESTLE Analysis

Whenever prominent corporations want to operate in a wider business environment, they study the economic, technological, legal, and environmental state. In other words, a company wants to know what to expect in a new market. The information about  these determinants and even more is available in the Mcdonalds PESTLE analysis:

Since Mcdonald's is the largest and most famous fast food company, most of its concerns connect to food safety. Many countries have stricter safety standards than the US, Mcdonald's place of origin. For this reason, the corporation has to align with the local legislation or avoid opening branches where losses can exceed profits. More risky regions in terms of policy would be Middle Eastern or Asian countries.

If we talk about the economy as the next criterion of the external environment, the circumstances differ from country to country. As an illustration, the recently slowing economic growth in Eastern Europe is a drawback for the local Mcdonald's restaurants. On the contrary, the steady growth of the economy in Western Europe and developing countries is a good sign. Nonetheless, employees rarely use Mcdonald's to satisfy their career attitudes. Therefore, a high employee turnover rate causes losses for the company.

Mcdonald's views cultural preferences as a crucial social factor, so the chain adapts to people’s tastes in different regions. An example of such adaptation is the famous Japanese menu with lots of rice and fish. Likewise, the Indian Mcdonald's branch caters to the mostly vegetarian tastes of citizens, and so on. However, the trend for a healthy lifestyle and weight loss might threaten the company, so it needs to change its strategy.

In recent years, Mcdonald's has tried to keep up with worldwide technology trends. This strategy helps the fast food corporation to boost demand in all countries. One of the greatest high-tech implementations was the sensory screens for ordering food. This decision allowed to attract more customers who wanted more menu positions. In the pandemic period, contactless restaurant options became even more topical. Further automatization would be a winning strategy for Mcdonald's.

One of the biggest legal issues for Mcdonald's branches worldwide would be changing employment laws, especially the increase of minimum wages. In this case, changes are inevitable, so the management should think of redistributing the profits correctly. Next, it’s the company’s priority to follow the changes in laws of every country. Sometimes, governments ban certain ingredients or toys from Happy Meals.

Regarding the ecology, the management of Mcdonald's actively shows their awareness of environmental issues. Becoming more environmentally friendly is the company’s objective. For instance, Mcdonald's tries to switch to only recyclable packaging to decrease pollution. Also, the local restaurants in many regions prefer to use energy-efficient technologies. Yet, there is an even worse ecology issue, global warming. The changing weather conditions might lead to a shortage of food and disruption of supply chains.

The detailed PESTLE analysis for business helps its top managers make proper decisions on both new and usual markets. Foreseeing the dangers and opportunities is essential for a company’s success.

Coca Cola PESTLE Analysis

Managers interested in discovering new markets have to employ PESTLE analysis for business. As an illustration, Coca Cola PESTLE analysis examines political, economic, social, technological, legal, and environmental conditions. 

Like any other food or beverage company, Coca-Cola works under country legislation, specifically consumer protection laws, copyright laws, etc. Governments naturally aim to prevent any harmful products from entering the market. Luckily for Coca-Cola, most countries allow their drinks on the shelves of their shops. But, there are circumstances like sanctions, which make trade and investment impossible in certain regions. For Coca-Cola, such restricted areas are Cuba, North Korea, and Russia.

Indeed, the Coca-Cola brand is the first that comes to mind when you think of sweet beverages. This fact is hardly surprising since the company owns half the market share, leaving only fifty percent for all its competitors. Overall, the demand for this drink is steady in most countries, yet some trends can change the situation. As everybody knows, Coca-Cola drink is far from healthy. Consequently, people who shift to a more nutritious low-sugar diet might stop buying the beverage, causing lower profits.

Because Coca-Cola operates in so many countries, it has to adjust its marketing strategy to the socio-cultural aspects of every nation. But, by far, its attempts were successful and led to the popularization of the brand worldwide. One of the examples is the creation of unusual tastes in certain countries. Japanese consumers, for instance, highly appreciate the green tea taste and lemon Coke. Besides, Coca-Cola sold bottles with names, and people liked them. So, naturally, sales went up in all regions.

A beverage giant like Coca-Cola manages to draw people's attention from all age categories, but it mostly caters to the younger generation. So how does this brand attract more consumers in such a competitive market? Coca Cola uses modern technologies to its advantage. Besides working on the drink, the company heavily invests in social media marketing. The hashtags and online games aim to gain more buyers who want to be cool and trendy.

The Coca-Cola Company is famous for the secret formula of its drink. The brand has zero problems with patents or copyright, but the issues emerge from the other side. Coca-Cola is unfortunately notorious for mistreating its workers, who even protested against its unfair policy. What is more, there were even rumors about racial discrimination. So, the company has to work in this direction to clear its image.

As the biggest soft drinks producer in the world, Coca-Cola faces several accusations from eco-activists. Water shortage is the first problem that arises in places where the company places its factories. Statistically, Coca-Cola is the largest consumer of fresh water, so it drains its supplies everywhere. The issue is especially severe in countries that suffer from droughts, like India. Another problem to work on is plastic pollution due to piles of Coca-Cola bottles. Recyclable materials would be an awesome alternative.

PESTLE analysis for a business like Coca-Cola builds the most efficient strategy. Proper steps help to avoid pitfalls and secure market position.

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PESTLE Analysis for Amazon

Luckily for people who love to shop comfortably, services like Amazon exist to meet their needs. This global leader in e-commerce gains customers’ trust thanks to its smart tactical and strategic plans. The management uses PESTLE analysis for Amazon, which shows the company’s strong and weak sides:

Paving the way into multiple countries' markets means dealing with the local political environment. On the one hand, Amazon thrives in developed regions that can boast political stability. However, on the other hand, unpredictable environments like Eastern Europe or the Middle East threaten the company’s activity. Furthermore, rising foreign trade taxes may affect Amazon, like the cybersecurity failure.

Sometimes, high prices for the products, together with increasing shipping costs, scare away company clients. This issue is topical for Amazon, especially in developing countries. However, automatizing the processes can help this company save costs and set lower prices. A more influential factor for Amazon is competition with Aliexpress or Walmart. They have the potential to take over the market in Asian countries and the USA correspondingly.

Depending on the average income, Amazon sales might differ from country to country. More developed countries generally have a bigger percentage of citizens who use e-commerce. Furthermore, online shopping has become a large cultural phenomenon since the beginning of lockdowns. As a result, people got used to receiving their packages without going outside, which positively affected Amazon’s revenues. At the same time, too many company employees are losing their jobs because of automatization, which is a negative factor.

Technology and innovations are sure something that Amazon implements where it is possible. Since delivery is the company’s main service, the management attempts to make the process more efficient. Everything here revolves around creativity. Customers from developed regions can even receive groceries through drones. Another improvement is the possibility to talk to customer service through live chats or e-mails. Overall, Amazon constantly invests in its R&D department.

Legal matters are one of the most complicated, as every country has different requirements for foreign business activity. Amazon strictly follows consumer and employment laws to avoid tarnishing its reputation and bearing losses. Still, there are controversial situations where this business has to change its strategy. First, the counterfeit accusations can obstruct Amazon’s activity. Selling fake goods is legally punishable in most countries. Also, governments might suspect that Amazon collects consumer data underhandedly.

The examination of Amazon’s ecological strategy proves that this business cares about its effect on the environment. Even though e-commerce produces fewer emissions than shopping in brick-and-mortar shops, the change is still necessary. To become more environmentally friendly, Amazon encourages its clients to choose longer delivery options since quick shipment is bad for the ecology. Such initiatives improve the brand image and strengthen customer loyalty.

Altogether Amazons PESTLE analysis digs out the needed information about the company's activity. The final objective is to assess the effect of the environment on this brand and to find the best solutions for arising issues.

How do PESTLE Factors Affect a Business

Indeed, the lack of market research usually backfires with the sudden obstacles in the company’s way. Our papers writing service recommends using PESTLE analysis for businesses to make efficient decisions. Originally, every PESTLE analysis template contained several factors influencing companies worldwide. Like so, political circumstances might encourage or prohibit a firm from working in a country by enforcing the law, which is another category.

Next, economic strength impacts the demand for products and prices for raw materials. On top of that, socio-cultural specifics determine whether the s and services can be popular. Another subject of analysis is the level of technology, which should be enough for an innovative enterprise. Finally, the state of local ecology affects foreign business too. The company must be responsible for any potential harm to nature.

SWOT and PESTLE: Difference

You could have heard of two equally popular abbreviations, SWOT and PESTLE. In a nutshell, both of them relate to business and marketing. At first, these frameworks might seem a bit similar, but they do differ. For instance, if you look at the PESTLE analysis definition, you can see that it covers only the macro environment where a business operates. At the same time, SWOT examines internal factors like strengths and weaknesses and external determinants like opportunities and threats.

How does our research paper writing services compare the two methods? The thing is, both of them are essential. It is worth mentioning that SWOT analysis suits new brands and products more, while PESTLE analysis works better for expanding businesses.

Why Is PEST Analysis Useful for Business

Granted that company owners think of expansion, they have to consider everything. In such situations, PESTLE analysis for business is an awesome way to study unknown markets. The framework covers every detail that can potentially boost or disrupt business activity. On the contrary, superficial analysis is ineffective as it often misses economic, cultural, or legal specifics. Moreover, changes can happen overnight, so PESTLE analysis should be recurring.

A key goal of the market examination is minimizing dangers for a company. Analyzing the current situation in a country, along with its previous experiences, gives a hint of future events. However, certain circumstances, like natural disasters or international conflicts, are impossible to predict. That is why management should have a backup plan just in case.

In conclusion, any PESTLE analysis template gives companies recommendations regarding their foreign strategy. Furthermore, the study is thorough, so you can find an essay to buy at our service that always finishes work on time. Finally, preparation gives a clear view of the best direction for a company in a world of endless possibilities.

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PESTLE Analysis

The Latest and Best Analysis Online

PESTLE Analysis Examples to Better Explain the Framework

Last Updated: Apr 4, 2024 by Jim Makos Filed Under: PEST Analysis , PEST Examples

Before discussing some PESTLE analysis examples in the next 6 minutes, let’s remind ourselves that PESTLE analysis is an incredibly popular business analysis tool. Not only is it extremely easy to use , but it’s also very effective . PESTLE analysis helps you analyze a chosen organization from six different perspectives: Political, Economic, Social, Technological, Legal, and Environmental . By doing so, you unlock a powerful understanding of how a given business is performing from every angle. Despite its apparent simplicity, many beginners struggle with conducting their own PESTLE analyses. In this article, we want to eliminate any confusion surrounding this unique business analysis tool. Today’s PESTLE analysis examples will demonstrate how you, too, can use it.

What is PESTLE Analysis

As touched on above, PESTLE analysis is a business framework that looks at things from six crucial viewpoints. To conduct a PESTLE analysis, you find as much information as you can about the business, and separate it between the six categories. The key to getting the PESTLE analysis template right is understanding what each category of PESTLE analysis factors stands for. Remember, these are external factors that an organization has no control over. Find more about external factors here , as PESTLE is not the only type of analysis that relies on them ( STEEP is another)!

Now, let’s examine some external forces examples for better comprehension.

Political factors examples

Every organization operates within some kind of political environment. The question is: how does that political environment affect the business itself? In this category, you’ll find information about everything from international relations (which can affect an organization’s ability to do business across borders) to political instability (which can severely thwart an organization). For a complete list of political factors affecting a business or organization, we have a complete guide here .

Economic factors examples

Similarly, every organization is exposed to the economies of the markets in which it operates. The beauty of PESTLE analysis is that you can consider factors as broad or as specific as you like. For the economic factors affecting a business, you can discuss the international economy, national economies, or even regional economies. For a complete list of economic factors affecting a business or organization, click here .

Social factors examples

An important part of any business is the consumer. The sociocultural column of PESTLE analysis allows you to explore how trends in society and culture — which are ultimately trends in the consumer — affect a business. For example, if a business sells just one specific product, how is the consumer approach to that product changing? For a complete list of social factors affecting a business or organization, check out this article .

Technological factors examples

Businesses are becoming increasingly technological, hence the importance of the T in the PESTLE analysis template. This is your chance to explore any of the technological factors affecting a business, including both technological constraints and advancements. This may refer to access to technology within a given region or the development of new technologies within an industry. But there are a lot more in technological factors, as we have seen here .

Legal factors examples

If you’re familiar with PEST analysis , you might have noticed that PESTLE analysis is the same thing — just with an added L and E. Of course, the L in PESTLE analysis refers to legal factors. Often, these legal factors have some overlap with political factors — but not always. Examples of topics that might be discussed in this category include trade laws, labor laws, and intellectual property laws, and how each affects a business. Here is a complete list of legal factors.

Environmental factors examples

A category of growing importance is the environmental one. Many businesses, especially those in primary industry , have some kind of impact on the environment. This part of PESTLE analysis is about knowing what that impact is, what effects that might have, and how businesses can improve in this department. Here is a more detailed explanation and a breakdown of environmental factors.

Simply put, PESTLE analysis is about filling out a brief profile about an organization for each of these categories. As long as you know what to put in each category (which we hope we explained well enough above), then it’s just a question of sourcing your data. For more information about that, we highly recommend our step-by-step guide on how to do a PESTLE analysis .

PESTLE Analysis Examples

If you’re new to PESTLE analysis, some examples are probably what you want to see most. In this section, we’ll introduce you to some PESTLE analysis examples of both countries and businesses.

PESTLE Analysis Examples of a Country

Unlike other business analysis tools, PESTLE analysis works just as well for countries as it does businesses. That’s right: you can analyze the standings of an entire country with the PESTLE model!

When referring to countries, here’s what PESTLE analysis often looks like:

• Political: What are the country’s political relations like with others?
• Economic: How is the country’s economy doing?
• Sociocultural: What impactful societal and cultural customs does the country have?
• Technological: How is the country with regard to adoption and development of tech?
• Legal: What is the legal landscape like in the country?
• Environmental: What is the country’s impact on the environment?

Here are four PESTLE Analysis examples of countries that you can find on our blog. We purposefully picked three completely different countries to give you an idea of how the results differ:

• PEST analysis of Germany
• PEST analysis of China
• PEST analysis of Canada
• PESTLE Analysis of Japan

Between those three PESTLE Analysis examples, you should get a pretty clear idea of what PESTLE analysis of a country should include exactly.

PESTLE Analysis Examples of a Business

Aside from analyzing countries, you can, of course, analyze businesses with the PESTLE analysis framework. Earlier in this post, we detailed how you can interpret each of the six categories of the acronym. If you follow the advice given up there, you shouldn’t have any trouble with knowing what to include!

Here are three PESTLE analysis examples of businesses which you can find on our blog:

• PESTLE analysis of Nike
• PESTLE analysis of Apple
• PESTLE analysis of Tesla

If you read through those three PESTLE analysis examples, we guarantee you’ll be ready to create your own!

PESTLE Analysis Examples of an Industry

Apart from businesses, organizations and countries, PESTLE analysis and other business frameworks can be used on whole industries. We can do a PEST or a STEEPLE analysis for example, on industries to assess the external factors that influence all the companies that are doing business in that niche.

Here are some PESTLE analysis examples on individual industries:

• PESTLE analysis of the Food industry
• PESTLE Analysis of the Real Estate Industry
• PESTLE Analysis of the Logistics Industry
• PESTLE Analysis of the Agriculture Industry
• PEST analysis of the Healthcare industry
• PEST analysis of the Airline industry

More PESTLE Analysis Examples

If you’re looking for more great examples of PESTLE analysis, we highly recommend you take a look around our website here at PESTLEanalysis.com. You can try searching for “PESTLE”, a specific company, or “industry” on the top right, and look around the blog yourself for a complete selection of business analysis information, including PESTLE and many other techniques.

As you can see, PESTLE analysis is a pretty simple business analysis tool. You simply gather up as much information as you can about a business or country, and then spread it across the six PESTLE categories: Political, Economic, Sociocultural, Technological, Legal, and Environmental. You now know how to to a PESTLE Analysis by yourself.

We hope you found our PESTLE analysis examples helpful, and wish you the best of luck with conducting your own analysis!

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PESTLE Analysis Examples

Before We See PESTLE Analysis Examples, Let’s Recap on the Basics.

A PESTLE analysis looks at the macro trends in the surrounding environment of a certain business or organization. It examines the political, economic, social, technological, legal, and environmental elements of the operating market that may have either positive or negative effects on your company or organization.

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A PESTLE analysis is often used as an extension of a SWOT analysis . Remember that the external matrix of the SWOT evaluates and creates awareness about the opportunities an organization should take advantage of, as well as the threats it should avoid. This external analysis is part of evaluating your organization’s strategic position within its market, industry, and larger operating environment.

Here, we will take a deep dive to examine what you should feature in your own PESTLE analysis. We’ll examine some PESTLE analysis examples from some of the most successful companies of our time.

Definitions and General PESTLE Analysis Examples:

A PESTLE analysis will look different for each industry, and it must be approached differently as well. Consider your organization’s unique position, market, and needs when conducting a PESTLE analysis.

It is easiest to begin with a SWOT analysis and then use your PESTLE as a companion piece to dig deeper into the external megatrends—both threats and opportunities—that the market and operating environment will present to your organization.

From our PESTLE analysis examples, here are some factors you may consider using:

Examples of Political Forces

These are the external forces affecting your organization that are brought on by government. They may include laws, policies, regulation or de-regulation trends, governing bodies and leadership, foreign trade and foreign relations, political issues and trends, tax policy—any political factors that could influence your organization’s opportunities or threats.

Examples of political forces include:

• Changes in government/election cycles: Will the possibility of shifting party majorities in upcoming or recent elections affect regulation or de-regulation in your industry or a related industry? Does this create a threat or an opportunity?
• Fiscal policies: How might changes in tax codes affect your budget and profits? How can you prepare for this?
• Wars and conflicts: What recent or current conflicts might affect foreign relations and/or trade in your industry? What can you do to create stability?
• Legislation changes: Is there legislation (proposed or passed) that would substantially affect your operations or your customers?
• Trade agreements: Do you see any upcoming opportunities in the form of new foreign markets? Or conversely, do you see any threats to your foreign markets?
• Political movements: What issues are becoming increasingly important to the people in your target audience? How does this affect their relationship with your brand?

Examples of Economic Forces

The economic environment you operate in includes several factors to consider, such as general economic climate, taxation, and globalization. Inflation rates, shifts in consumer spending, supply chain issues, demand curves, and global economic health may all be a part of your economic analysis.

Examples of economic forces include:

• Employment rates and compensation: Do you have a ready labor market, or are good team members hard to come by? Which direction is the trend heading? What do you need to consider in terms of compensation to bring on and keep talent in your industry?
• Inflation: How is inflation affecting the price of your materials? How is it affecting your customers and their spending?
• Currency devaluations: How is your currency—and the currency of your customer base—performing? How might this affect your costs and revenue?
• Stock market and market values: What recent or predicted trends in the stock market do you see impacting your industry and your organization?

Examples of Social Forces

Social forces focus on the opinions and attitudes of consumers that relate to your product, as well as the changing population and demographics of your operating market. Your analysis might consider social justice movements and other trends, both in your immediate environment and in the broader environment your customers are coming from.

Examples of social forces include:

• Demographic changes: What are the ages, experiences and backgrounds, and racial and gender identities of your customer base? Have any of these shifted or are they projected to shift? If so, how and why? What do you need to do to accommodate customers coming in?
• Religious beliefs: Are there religious or spiritual beliefs that intersect with your organization or your product? How can you be sensitive to those?
• Consumer opinions: How do consumers feel about your product (or products like yours)? Are there positive or negative changes in this general sentiment?
• Purchasing patterns: Due to economic or other factors, are your customers spending less in your market? More?
• Popular media: What current events, celebrity opinions, or other media influences will your consumers be tuned into? Are there any that might affect thoughts, ideas, and feelings about your organization, product, or brand?

Examples of Technological Forces

This focus area considers how technological forces may be impacting your organization. Changes in technology can affect your positioning as an organization. Some recent examples are the rise of cryptocurrency, the emergence of work-from-home technology, AI developments, and even concerns over cyber security.

Examples of technological forces include:

• Increased emergence of AI: What capabilities do you see as opportunities for your organization?
• Energy usage: What new technologies would allow you to save on energy costs (both to your organization and to the environment)?
• Cloud software: What developments have been made to cloud storage to make it more effective, and are you taking advantage of those developments? Conversely, are there security threats to be aware of in this software for your organization’s data?
• Internet: What improvements are available to maximize speed and reliability for the online work of your team?
• Technology usage incentives: Are there incentives available to encourage certain technology use?
• New machinery or tech: Are there emerging industry-specific technologies or equipment that would improve the quality, cost, or efficiency of your organization’s work?

Examples of Legal Forces

While similar to the political aspects, the legal elements in your PESTLE analysis examine the practical application of those political factors into rules and regulations that impact your organization’s business or customers. Depending on your business, you may need to consider local and state laws as well as federal laws.

Examples of legal forces include:

• Patent and intellectual rights laws: How might developments or decisions in intellectual property law affect you and/or your competitors?
• Protection laws: Are there consumer protection laws that would affect the way you interact with and do business with your customers?
• Occupational safety laws: What occupational safety laws do you need to be aware of to conduct business in a way that protects both your employees and your organization?
• Import and export laws: What legal parameters are there for ordering goods from other countries, as well as for selling your product in other countries?
• Licenses: What licenses do you, your employees, and your organization need in order to fill the roles that are needed?

Examples of Environmental Forces

Environmental factors are affected by weather, geography, climate change, and health crises. In addition to the public health crisis caused by the pandemic, the world has also been impacted by wildfires and other natural disasters across the globe. As an organization, you ought to consider the short-term and long-term impacts of these accelerating changes.

Examples of environmental forces include:

• Climate change: How might short- and long-term effects of climate change, including rising sea levels and increasing frequency of extreme weather, impact your organization and customers?
• Consumption of non-renewable resources: What necessary resources could become limited or depleted in the future that would impair your business?
• Energy alternatives:
• Gas emissions: How does your organization contribute to, and how is it affected by, gas emissions? What steps could be taken to reduce emissions and to prepare against the effect of emissions?
• Natural disasters: What natural disasters pose a threat in your area, or in the areas where many of your customers are located? How can you be prepared for these threats?
• Environmental hazards: What other hazards in your environment could prove threatening to your organization?

*Bonus: Ethical Factors to Consider

Over the last few years, business and marketing strategy experts have added a third ‘E’ to the PESTLE analysis – the ethical factor . This can include things such as fair-trade practices, child labor issues, increasing demand for conscious business models, and corporate social responsibility. As these issues come to your attention, examine the megatrends and take the opportunity to evaluate them within your organization’s environment.

Examples of ethical forces include:

• Workers’ rights: What strides can your organization make (or what strides is your organization already making) to take care of those who work for you?
• Fair trade laws: Especially concerning overseas trade, what issues do you need to be aware of in order to promote ethical and responsible practices?
• Human rights issues: How far have you followed the organizations you partner with, contract with, buy supplies from, and do other business with? Are there any organizations whose relationships need to be reconsidered due to human rights violations?
• Corporate social responsibility:
• Diversity, equity, and inclusion: What practices and attitudes are being adopted successfully to promote diverse, equitable, and inclusive workplaces? Conversely, are there practices and attitudes that are backfiring? Which might you best adapt for your organization?

6 Real-World PESTLE Analysis Examples from 8 Successful Companies:

Food and beverage industry pestle analysis examples:, starbucks pestle analysis example.

For Starbucks, lowering costs and staying aware and sensitive to the issues that are important to its customer base are two courses of action that become clear after an environmental analysis.

• Sourcing raw materials and following fair trade practices , which has gained a lot of attention from politicians in the West.
• Keeping up with laws and regulations in other countries from which Starbucks buys its raw materials.
• Economic recession , which has led many customers to seek cheaper alternatives.
• Rising labor and operational costs due to inflation.
• Retiring of the Baby Boomer generation, along with changing family patterns and lowered birth rates leading to fewer spending customers.
• Changing workstyles and lifestyles, including increased remote work .
• Enabling mobile payments , which increases the potential customer base.
• Agricultural developments that might impact raw material production.
• Introduction of caffeine consumption-related policies by health organizations.
• Industry licensing regulations.

Environmental

• Natural disasters in countries that produce coffee beans .
• Environmental laws and regulations related to packaging and waste .

Beyond Meat PESTLE Analysis Example

A California-based producer of plant-based meat substitutes, Beyond Meat is poised to take advantage of many environmental trends that could provide an opportunity to expand.

• Animal farming is receiving political pressure to cut back on expansion.
• Laws and regulations about greenhouse gas emissions.
• Vegan meat is projected to grow from 1% to 10% of meat consumption by the end of the decade.
• Vegan meat has the potential to be cheaper than animal meat , but would need drastic changes to its efficiency to realize this.
• Rise of veganism in developed countries.
• Increasing awareness and vocality of environmentally conscious citizens.
• An extensive amount of technology in R&D for this industry.
• Social media and other technological platforms for advertising and brand-building .
• New food safety standards to classify plant-based meat products.
• Soy farming has raised some concerns about deforestation and soil degradation.
• Plant-based products shown to be much more environmentally friendly than animal meats.

Retail Industry PESTLE Analysis Examples:

Walmart pestle analysis example.

Due to its size and profitability, Walmart has a uniquely competitive edge , yet its growth and continued profitability are sensitive to several external factors .

• Global differences in government regulations , such as banned products in some countries.
• Emergency curfews closing stores early.
• Inflation raising costs; brand appeal is based on low prices.
• Supply chain issues. Continued pressure on the supply chain and inflation is causing increased overhead costs.
• Business model rejected in some places, such as Germany.
• Increased trend toward online shopping , especially post-pandemic.
• Consumer push for same-day delivery of products.
• Adoption of automation for basic tasks.
• Expansion of mobile app and online services.
• Expansion of available technology in distribution and warehouse centers.
• Proposed legislation to raise minimum wage .
• Recent labor lawsuits open doors for further litigation.
• Call to reduce waste and use of nonrenewable energy.
• Weather and climate considerations in a wide number of locations.

Amazon PESTLE Analysis Example

The technology and online retail giant has many opportunities to capitalize on , with a few threats to monitor .

• Government pressure on anti-trust and monopolies for major corporations.
• Pressure from the federal government and local government about employment practices .
• Governmental regulations on cybersecurity and privacy protection.
• Increasing disposable incomes in developed countries.
• Inflation and supply chain issues impacting online stock.
• Macro-trend for organizations to seek and purchase cloud computing products and solutions.
• Increasing consumerism in developed economies and emerging economies.
• Increasing demand for same-day delivery of products to consumers.
• Increasing dependence on technology , cloud computing, and AI.
• Expansion of robotic automation for picking, packing, and delivery of the product.
• Expansion of AI to serve Amazon Web Services.
• Unionization and labor laws impact Amazon’s workforce.
• Changing import and export regulations .
• Import and export tax on goods sold.
• Increasing energy costs increase the cost of supply chain delivery.
• Environmental impact of plastic and plastic packaging .
• Carbon emissions and new fuel options as an organization.

Tech Industry PESTLE Examples:

Apple pestle analysis example.

Like other big tech companies, Apple stands to gain from growing reliance on digital technologies and movement toward energy efficiency—but so do its competitors .

• Trade disputes , especially between the U.S. and China.
• Pressure from federal regulators on antitrust .
• Increasing political pressure on consumer privacy protection and data.
• Changing economic tides and changing economic forecasts create uncertainty in the tech sector.
• Supply chain scarcity and resource constraints on product production.
• Stagnant changes to income of Apple’s buyer pool for luxury products.
• Rapid growth in emerging markets for entry-level products.
• Rising global use of mobile access across the globe.
• Increasing global dependence on digital ecosystems.
• Anti-Apple sentiment due to exclusivity and price.
• Growing technological and development capabilities of the competitive set .
• Pressure from cybercriminals threaten the data security of Apple products.
• Increasing privacy regulations and protections.
• Legal challenges to Apple’s policies and practices related to the app store .
• Ethically and efficiently recycling broken and unused electronic devices , especially those containing lithium batteries.
• Environmental impacts of manufacturing products in China.
• Climate change impacting shipping and supply chain routes .

Airbnb PESTLE Analysis Example

The unique matchup business model of Airbnb, as well as companies like Uber and Lyft, have taken the market by storm—but have also incurred significant legal battles .

• Housing laws and vacation rental bans in some markets conflict with business model.
• Varying tax rates from counties and countries.
• The housing crisis and crunch in the housing market.
• Varying prices and availability of hotels as a primary competitor.
• Increase access and desirability of travel .
• Resistance from locals about the impact of vacation rentals in residential areas .
• Social acceptance of ridesharing and travel sharing business model.
• Increased reliance on mobile apps and other digital solutions .
• Increasing security of online payment systems.
• Legal challenges in some states and countries.
• Environmental impact of single-use products for hospitality .

What is the purpose of conducting a PESTLE analysis? 

A PESTLE analysis can help you understand where your organization stands in the external market and assess the macro-trends that could potentially affect your business/product.

What are all the components of a PESTLE analysis?

A PESTLE analysis looks at six aspects of the environment that could impact your organization: Political, Economic, Sociological, Technological, and the two newly added — Legal and Environmental. Some PESTLE analyses even incorporate ‘ethics.’

What does PESTLE stand for?

Two things you should always consider as you’re going through each aspect of the PESTLE analysis are: where am I now, and where do I want to go? These two questions will guide you in figuring out your current state in the macro environment and your ideal state. Next, it’s important that with each factor or event you outline in your PESTLE, you also consider whether they pose an opportunity or a threat.

Thanks for sharing….extremely useful

Thank you for sharing ..it has helped

Thanks very helpful for understanding the concept of PESTLE analysis.

Very insightful and pratical. Helpful indeed Thank you

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How to Write PESTLE Analysis: Step by Step Guide (2023-2024)

Introduction

What is pestel analysis, the components of the pest.

• 1)      Political Factors
• 2)      Economic Factors
• 3)      Social Factors
• 4)      Technological Factors
• 5)      Environmental Factors
• 6)      Legal Factors

What Is PESTLE Analysis Used For?

Pest analysis examples.

• 1.      Political Factors
• 2.      Economic Factors
• 3.      Social Factors
• 4.      Technological Factors
• 5.      Legal Factors
• 6.      Environmental Factors
• 5)      Legal Factors
• 6)      Environmental Factors
• 3)      Socio-Cultural Factors

SWOT and PESTLE: Understanding the Difference

Swot analysis, pestle analysis, comparing swot and pestle, minimizing business risks, strategic guidance for foreign ventures, ensuring timely and reliable assistance, preparation for a world of endless possibilities, pestel analysis help.

PESTLE Analysis was originally developed as PEST Analysis in the late 1960s by Harvard professor Francis Aguilar. The acronym was later expanded to PESTLE, incorporating two additional factors, Legal and Environmental, making it a comprehensive tool for analyzing the external macro-environmental factors affecting a business or organization’s operations. Today, PESTLE Analysis is widely used across various industries to assess the impact of political, economic, social, technological, legal, and environmental factors on business strategies and decision-making processes .

In today’s globalized world, businesses have the opportunity to expand their operations into new countries and regions. However, successful expansion requires a thorough understanding of the external factors that can impact a company’s success in a new market. One essential tool for conducting such analysis is the PESTLE analysis, also known as PESTEL analysis.

This comprehensive framework, brought to you by GradeSmiths, examines the Political, Economic, Social, Technological, Legal, and Environmental factors that can influence a business environment. By conducting a PESTLE analysis, entrepreneurs and top managers gain valuable insights into the specific characteristics and challenges of the target market, helping them make informed decisions and mitigate potential risks.

In this article, GradeSmiths delves into a step-by-step guide on how to conduct a PESTLE analysis, providing you with the necessary knowledge to assess the opportunities and risks for entrepreneurship in any country or region. Whether you are an established company planning to expand or a budding entrepreneur seeking new possibilities , understanding the PESTLE analysis is a crucial step towards sustainable growth and success in a dynamic global market.

PESTEL analysis, also known as PESTLE analysis, is a powerful tool used by businesses to systematically assess and understand the external factors that can impact their operations and performance. It provides a comprehensive framework for examining the Political, Economic, Social, Technological, Environmental, and Legal aspects of a business environment.

PEST analysis is a simplified version of PESTLE (PESTEL) analysis, focusing on four key components that influence a business’s environment. Despite covering fewer factors, PEST analysis provides valuable information about the following determinants:

1)      Political Factors

Political factors encompass the influence of government policies, regulations, and political stability on businesses. This includes factors such as taxation policies , trade restrictions, labor laws, and government stability. Understanding the political landscape is crucial for businesses to navigate potential risks and opportunities in a particular market.

2)      Economic Factors

Economic factors refer to the economic conditions and trends that can affect businesses. This includes factors such as economic growth, inflation rates , exchange rates, and consumer spending patterns. Analyzing the economic environment helps businesses make informed decisions and adapt their strategies accordingly.

3)      Social Factors

Social factors examine the social and cultural aspects that can influence businesses. This includes factors such as demographics, lifestyle preferences, attitudes, and cultural norms. Understanding social trends helps businesses tailor their products and services to meet the needs and preferences of their target market.

4)      Technological Factors

Technological factors focus on the impact of technology on businesses. This includes factors such as advancements in technology, digitalization, and innovation. Embracing technological changes can give businesses a competitive edge and open up new opportunities for growth.

5)      Environmental Factors

Environmental factors consider the influence of environmental issues on businesses. This includes factors such as climate change, environmental regulations, and sustainability practices. Being environmentally responsible is not only essential for corporate social responsibility but also for meeting consumer demands.

6)      Legal Factors

Legal factors encompass the legal and regulatory aspects that can affect businesses. This includes factors such as labor laws, intellectual property rights, and consumer protection laws. Complying with legal requirements is vital for businesses to avoid legal issues and maintain a positive reputation.

Conducting a PESTEL analysis enables businesses to gain valuable insights into the external factors that shape their operating environment. It helps them make strategic decisions, identify potential risks, and capitalize on opportunities to achieve long-term success and sustainability. By systematically evaluating these factors, businesses can adapt and thrive in a dynamic and ever-changing business landscape.

PESTLE analysis is a powerful tool used by businesses to assess the external factors that can impact their operations and d ecision-making process . It serves various purposes, including:

• Risk Assessment: PESTLE analysis helps businesses identify potential risks and challenges in the external environment. By analyzing political, economic, social, technological, legal, and environmental factors, companies can anticipate potential obstacles and plan effective risk management strategies.
• Market Entry and Expansion: Before entering a new market or expanding their operations to a different country, businesses conduct PESTLE analysis to understand the market’s overall climate. It allows them to evaluate whether the political and economic conditions are favorable for growth and expansion.
• Strategic Planning: PESTLE analysis plays a crucial role in strategic planning. By examining the external factors, businesses can align their strategies with the prevailing market conditions. It helps them make informed decisions about product development, pricing, marketing, and distribution.
• Identifying Opportunities: Apart from assessing risks, PESTLE analysis also helps companies identify potential opportunities in the market. Understanding social trends, technological advancements, and legal changes can give businesses a competitive edge by capitalizing on emerging opportunities.
• Regulatory Compliance: Legal and environmental factors in PESTLE analysis help businesses ensure compliance with the relevant laws and regulations. Understanding the legal landscape helps companies avoid legal disputes and penalties while operating in a new market.
• Environmental Impact Assessment: The environmental aspect of PESTLE analysis allows companies to evaluate the potential impact of their business activities on the environment. It encourages businesses to adopt sustainable practices and reduce their carbon footprint.

So, PESTLE analysis provides businesses with valuable insights into the external factors that can influence their success. By understanding the political, economic, social, technological, legal, and environmental conditions, companies can make informed decisions, minimize risks, and capitalize on opportunities for growth and prosperity.

If you’re in search of PESTLE analysis examples, you’ve come to the right place. Below, we provide a comprehensive PESTLE analysis template that highlights the various factors affecting a business, including economic, social, technological, legal, and environmental aspects. A well-crafted PESTLE analysis example will delve into critical areas such as consumer protection laws, employment regulations, and corporate social responsibility initiatives.

In today’s dynamic economy, strategic thinking has become a crucial competitive advantage for businesses in every industry. A thorough PESTLE analysis can provide valuable insights into understanding consumer buying habits, trade restrictions, technological advancements, and other crucial factors that can impact a company’s success.

For instance, the economic component of a PESTLE analysis can shed light on the economic conditions of a particular market, such as inflation rates, unemployment rates, and consumer spending patterns. The social aspect can explore demographic trends, cultural norms, and societal attitudes that influence consumer preferences and behaviors. The technological component can analyze the level of technological advancements and innovations that may affect a company’s operations and product development.

Moreover, a comprehensive PESTLE analysis should consider the legal factors, including laws and regulations related to the industry, intellectual property rights , and labor laws. Additionally, the environmental aspect should assess the impact of ecological trends, sustainability practices, and climate change on the business.

By conducting a PESTLE analysis, businesses can gain a deeper understanding of the external environment, anticipate potential challenges and opportunities, and make well-informed decisions to stay competitive in the market. Whether you’re a seasoned entrepreneur or a startup, a PESTLE analysis is an invaluable tool to navigate the complexities of the business landscape and ensure long-term success.

PESTLE Analysis of Apple

When it comes to strategic decision-making, even technological giants like Apple must carefully assess the external factors that can significantly impact their business. Conducting a PESTLE analysis for Apple is an indispensable tool for devising a robust business plan, especially when expanding operations into countries like China.

1.      Political Factors

Political stability is a vital aspect of the external environment. While Apple generally adheres to safety regulations and fiscal policies, it is not immune to the effects of international conflicts. The ongoing trade war between China and the USA exemplifies how government decisions can influence companies. The imposition of higher import taxes and the shifting landscape of cheap manufacturing in China can lead to increased production costs for Apple.

2.      Economic Factors

As a producer of premium-priced products, Apple closely monitors economic growth and purchasing power in foreign markets. Fortunately, Asian countries like China are experiencing stable GDP growth and rising consumer purchasing power, making them attractive prospects for Apple’s expansion plans. Venturing into these thriving regions presents an opportunity for increased profits.

3.      Social Factors

Understanding the social dynamics of a target country is crucial for successful business ventures. In China, where population growth rates exceed expectations, Apple can find an abundant pool of both workers and consumers. Moreover, Apple’s astute marketing efforts position their products as luxury items, appealing to the Asian population’s desire to showcase high status. However, the trade war between the US and China could also have adverse effects on Apple’s sales in the region.

4.      Technological Factors

For Apple, staying at the forefront of technological advancements is paramount. However, competitors like Samsung, Xiaomi, and Lenovo continuously challenge Apple’s market share with innovative offerings. Apple’s target audience may seek out these rival brands if Apple fails to introduce revolutionary features in their gadgets.

5.      Legal Factors

Legal considerations play a significant role in Apple’s operations, encompassing safety laws, copyright protection, and patent legislation. Apple strives to maintain a positive public image by avoiding legal controversies. However, the company does take calculated risks when dealing with copyrighted music and software, potentially risking its loyal customer base in the event of a lawsuit.

6.      Environmental Factors

Environmental issues, including climate change and environmental regulations, cannot be overlooked in the PESTLE analysis. While Apple can mitigate weather-related risks by strategically locating its factories, countries like China’s strict environmental policies push Apple to make eco-friendly choices in its production processes. For instance, Apple’s decision to abandon lithium batteries aligns with the country’s environmental concerns and bolsters the brand’s reputation.

Thus, the PESTLE analysis highlights the crucial macro-environmental factors that significantly impact Apple’s performance in foreign markets. By examining the strengths and weaknesses of Apple’s policies, this analysis emphasizes the importance of adapting to the ever-changing business landscape while capitalizing on the company’s numerous strengths. Despite facing challenges, Apple’s strategic approach and strong market position, positions it for continued success.

McDonald’s PESTLE Analysis

When a prominent corporation like McDonald’s expands its operations into new markets, a comprehensive understanding of the external business environment becomes paramount. Conducting a PESTLE analysis for McDonald’s provides valuable insights into the economic, technological, legal, and environmental factors that can significantly impact its performance in different regions.

As the largest and most renowned fast-food company, McDonald’s must address food safety concerns in various countries. Compliance with local legislation or risk assessment becomes crucial, as some regions have stricter safety standards than the company’s country of origin, the US. Opening branches in riskier regions with uncertain policies, such as Middle Eastern or Asian countries, requires careful consideration.

McDonald’s faces varying economic circumstances in different countries. Slowing economic growth in Eastern Europe poses challenges for local McDonald’s restaurants. On the other hand, the steady growth of economies in Western Europe and developing countries presents opportunities. However, the high employee turnover rate within the company affects its profitability, necessitating efforts to improve employee retention strategies.

Cultural preferences play a significant role in McDonald’s adaptation strategy. Customizing menus to cater to local tastes is exemplified by the Japanese menu, featuring rice and fish, and the Indian menu, tailored to the largely vegetarian preferences . However, the growing trend for healthier lifestyles and weight loss poses a threat to the company’s traditional offerings, necessitating a shift in its strategy.

Embracing global technology trends, McDonald’s has implemented sensory screens for ordering food, attracting customers seeking a broader menu selection. The pandemic accelerated the adoption of contactless restaurant options, making further automation an advantageous strategy for McDonald’s to pursue.

5)      Legal Factors

Shifting employment laws, particularly increases in minimum wages, present significant legal challenges for McDonald’s branches worldwide. The management must adapt its profit distribution strategies accordingly. Additionally, staying compliant with each country’s changing laws, including ingredient bans or restrictions, is essential to ensure uninterrupted operations.

6)      Environmental Factors

McDonald’s has shown a strong commitment to environmental issues, aiming to become more environmentally friendly. Initiatives include switching to recyclable packaging to reduce pollution and adopting energy-efficient technologies in local restaurants. However, global warming poses severe environmental challenges, potentially leading to food shortages and supply chain disruptions.

So, the comprehensive PESTLE analysis allows McDonald’s top managers to make well-informed decisions in both familiar and new markets. By proactively identifying potential risks and opportunities, the company can ensure sustainable success and navigate the ever-changing business landscape effectively.

PESTLE Analysis for Netflix

Netflix, the global streaming giant, has revolutionized the entertainment industry with its on-demand content delivery platform. Employing PESTLE analysis for Netflix uncovers key factors that influence the company’s performance and strategic decisions.

Operating in various countries means Netflix must navigate different political landscapes and regulations. Content censorship and licensing agreements can impact the availability of certain shows or movies in specific regions. Additionally, government policies related to media content and distribution may affect Netflix’s expansion plans.

Economic conditions in different markets influence consumer spending on entertainment services. Subscription prices and local competition can impact Netflix’s market penetration and revenue generation. Fluctuations in exchange rates can also affect the cost of content acquisition and licensing agreements.

Changing consumer preferences and viewing habits influence Netflix’s content strategy. The platform must cater to diverse audiences and cultural preferences to remain relevant globally. Social trends like cord-cutting and binge-watching shape the company’s content release and distribution strategies.

Netflix heavily relies on technology for content delivery and user experience. Continuous investment in streaming technology and platform optimization is critical for maintaining customer satisfaction. Technological advancements, such as 4K streaming and virtual reality, provide opportunities for enhancing user engagement.

Legal challenges related to copyright infringement and intellectual property rights are significant concerns for Netflix. The company must navigate complex licensing agreements and negotiate content distribution deals with production studios and content creators. Compliance with data protection and privacy laws is also crucial to maintain consumer trust.

While Netflix’s primary operations are digital, the company’s environmental impact includes energy consumption for data centers and content delivery networks. Adopting sustainable practices, such as using renewable energy sources for data centers, contributes to the company’s environmental responsibility.

Overall, the PESTLE analysis for Netflix reveals the complexities and challenges the company faces in the dynamic entertainment industry. Understanding these factors enables Netflix to make informed decisions, adapt to changing market conditions, and continue its global growth and success in the ever-evolving streaming landscape.

Coca Cola PESTLE Analysis

In the pursuit of discovering new markets, astute managers rely on the comprehensive PESTLE analysis for business. For Coca Cola, this analysis delves into the political, economic, social, technological, legal, and environmental conditions, providing valuable insights into its global operations.

As a major food and beverage company, Coca-Cola operates under the purview of country-specific legislation, including consumer protection and copyright laws. While most countries readily permit the sale of Coca-Cola products, some regions face trade and investment restrictions due to sanctions. Countries such as Cuba, North Korea, and Russia represent areas where Coca-Cola’s operations may be limited.

Coca-Cola enjoys unparalleled brand recognition, owning a significant portion of the market share for sweet beverages worldwide. However, despite steady demand in most countries, shifting consumer trends towards healthier diets may impact sales. The company may face challenges if health-conscious individuals reduce their consumption of sugary beverages, potentially leading to lower profits.

Operating in diverse countries, Coca-Cola successfully tailors its marketing strategies to match the socio-cultural aspects of each nation. Customizing tastes and introducing unique bottle designs, such as bottles with names, has garnered widespread popularity and increased sales in various regions, including Japan.

Catering predominantly to the younger generation, Coca-Cola leverages modern technologies to capture consumer attention and maintain a competitive edge. Extensive investments in social media marketing, hashtags, and online games appeal to trendy and tech-savvy consumers, contributing to the brand’s popularity.

While Coca-Cola has navigated patent and copyright matters successfully, the company has faced challenges concerning employee treatment, including protests against unfair policies and allegations of racial discrimination. Addressing these issues and fostering a positive work environment is crucial for improving the company’s public image.

As the world’s largest soft drinks producer, Coca-Cola grapples with environmental concerns raised by eco-activists. Water shortage, particularly in regions where factories are located, poses a significant challenge, given the company’s substantial water consumption. Efforts to promote recyclable materials and reduce plastic pollution are essential steps towards enhancing environmental sustainability.

PESTLE analysis provides Coca-Cola with a robust strategy, guiding the company to navigate potential pitfalls and secure a strong market position. By understanding the impact of various external factors, Coca-Cola can make informed decisions to thrive in an ever-changing global business landscape.

PESTLE Analysis for Amazon

As the leading global e-commerce giant, Amazon caters to the needs of millions of satisfied customers with its smart tactical and strategic plans . Employing PESTLE analysis for Amazon reveals the company’s strengths and weaknesses, enabling effective decision-making and strategic planning.

Operating in multiple countries necessitates navigating complex political environments. While Amazon thrives in politically stable regions, unpredictable markets in Eastern Europe and the Middle East pose challenges. Additionally, rising foreign trade taxes and cybersecurity failures may impact the company’s operations.

Amazon faces challenges in some markets due to high product prices and increasing shipping costs, particularly in developing countries. Nevertheless, the company can leverage automation to optimize processes and offer competitive prices. Competitors like Aliexpress and Walmart also influence market dynamics in Asian countries and the USA.

The income levels of different countries influence Amazon’s sales, with more developed nations witnessing higher e-commerce adoption rates. The COVID-19 pandemic accelerated the cultural shift towards online shopping, benefiting Amazon’s revenues . However, automation has led to job losses, raising concerns about social implications.

Technology and innovation are at the core of Amazon’s business model. The company continually invests in research and development to enhance its delivery processes and customer experience. Innovations like drone deliveries and efficient customer service through live chats or emails solidify Amazon’s technological edge.

Navigating various legal requirements in different countries is a complex challenge for Amazon. Adhering to consumer and employment laws is essential to protect the company’s reputation and mitigate potential losses. However, counterfeit accusations and data privacy concerns may require strategic adjustments.

Amazon demonstrates a commitment to environmental sustainability by encouraging longer delivery options to reduce emissions. Despite e-commerce’s lower environmental impact compared to brick-and-mortar shopping, the company strives to become even more eco-friendly. These initiatives improve the brand image and foster customer loyalty.

Therefore, the PESTLE analysis provides invaluable insights into Amazon’s business environment, enabling the company to assess its impact on the market and devise effective strategies to address emerging challenges. By leveraging this analysis, Amazon can stay ahead in the dynamic and ever-changing e-commerce landscape.

How do PESTLE Factors Affect a Business

In today’s highly competitive business landscape, companies must navigate a myriad of external factors that influence their operations and success. PESTLE analysis provides a comprehensive framework to assess the macro-environmental factors that impact a business. This one-page analysis delves into the significance of PESTLE factors and their effects on businesses worldwide.

Political factors play a crucial role in shaping a business’s operating environment. Government policies, regulations, and stability can either facilitate or hinder business operations. For instance, political stability encourages investments and expansion, while political instability may create uncertainty and deter foreign investors. Additionally, changes in taxation policies, trade agreements, and labor laws can impact a company’s profitability and strategic decisions.

Economic conditions significantly influence business performance. Factors such as GDP growth, inflation rates, and exchange rates affect consumer spending and purchasing power. In a thriving economy, consumers are more likely to spend on goods and services, boosting businesses’ revenues. Conversely, an economic downturn may lead to reduced consumer spending and demand for products and services. Furthermore, fluctuations in commodity prices and raw material costs directly impact a company’s production costs and profitability.

3)      Socio-Cultural Factors

Societal norms, cultural preferences, and consumer behavior have a profound effect on businesses. Companies must adapt their products, marketing strategies, and business practices to cater to the unique needs and expectations of different demographics and cultures . For example, consumer preferences for eco-friendly products have prompted businesses to adopt sustainable practices and eco-conscious initiatives. Understanding socio-cultural trends is essential for businesses to connect with their target audiences and remain relevant in the market.

The rapid pace of technological advancements shapes the business landscape in significant ways. Embracing technology is crucial for companies to stay competitive and meet consumer demands. Innovations in automation, artificial intelligence, and data analytics streamline operations, enhance efficiency, and enable personalized customer experiences. Failure to adopt technology can leave businesses lagging behind and vulnerable to disruptors in the industry.

Legal factors encompass various regulations and laws that businesses must comply with to operate ethically and lawfully. Intellectual property rights, labor laws, consumer protection laws, and data privacy regulations are just a few legal considerations that impact businesses. Non-compliance with legal requirements can lead to hefty fines, reputational damage, and even business shutdowns. Staying informed about legal changes and proactively adapting to them is crucial for long-term sustainability.

Environmental factors have become increasingly significant for businesses as sustainability and corporate social responsibility gain prominence. Concerns about climate change, environmental impact, and resource depletion have urged businesses to adopt eco-friendly practices and reduce their carbon footprint. Embracing sustainable initiatives not only benefits the environment but also enhances a company’s reputation and attracts environmentally-conscious consumers.

In the realm of business and marketing, strategic analysis frameworks play a pivotal role in understanding the internal and external factors that impact a company’s performance and decision-making. Two widely used frameworks are SWOT and PESTLE analysis . While they share the common goal of aiding businesses in their strategic planning, they differ in their focus and scope. This article aims to delve into the disparities between SWOT and PESTLE analysis, emphasizing their distinct applications and significance in the business world.

SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats. It is an internal and external assessment tool used to evaluate a company’s current position and potential for growth.

• Strengths : SWOT analysis identifies a company’s internal strengths, such as core competencies, unique selling points, and resources that give it a competitive advantage in the market.
• Weaknesses: This aspect highlights the internal limitations, vulnerabilities, and areas in which a company may be falling short compared to its competitors.
• Opportunities: SWOT analysis explores external factors, such as market trends, emerging opportunities, or changing customer preferences, that a company can leverage to expand its business.
• Threats : The analysis also examines external factors that pose potential risks or challenges to the company’s growth and profitability.

SWOT analysis is particularly useful for startups and new products, providing a comprehensive overview of their competitive position and potential pathways for development.

PESTLE analysis, on the other hand, stands for Political, Economic, Social, Technological, Legal, and Environmental analysis. It is a macro-environmental framewor k that assesses the external factors that influence a company’s operations.

• Political: This factor examines how government policies, regulations, and political stability impact the business environment.
• Economic: PESTLE analysis considers economic factors like GDP growth, inflation rates, exchange rates, and consumer spending, which can significantly affect a company’s performance.
• Social: The analysis delves into societal factors, including demographics, cultural trends, and consumer preferences, which influence market demand and customer behavior.
• Technological: This aspect explores technological advancements and innovations that can create new opportunities or disrupt industries.
• Legal: Legal factors encompass the impact of laws, regulations, and compliance requirements on business operations.
• Environmental: PESTLE analysis also considers the impact of environmental factors, such as climate change, sustainability initiatives, and eco-friendly practices, on businesses.

PESTLE analysis provides businesses with valuable insights into the broader market environment, helping them identify potential risks and opportunities in their expansion endeavors.

Both SWOT and PESTLE analyses are essential strategic tools that complement each other in the decision-making process.

SWOT analysis focuses on a company’s internal factors and immediate competitive landscape, providing a snapshot of its strengths, weaknesses, opportunities, and threats.

PESTLE analysis, on the other hand, assesses the external macro-environment, considering broader factors that may influence the company’s market entry, expansion, and sustainability .

Thus, SWOT and PESTLE analysis are two distinct yet complementary frameworks that offer valuable insights into a company’s strategic planning process. SWOT analysis helps businesses identify their internal strengths and weaknesses and external opportunities and threats, while PESTLE analysis provides a broader perspective on the macro-environmental factors that may impact business operations. By leveraging both frameworks, businesses can make informed decisions, capitalize on opportunities, mitigate risks, and navigate the ever-evolving landscape of the business world.

Why Is PESTLE Analysis Essential for Business Expansion

When it comes to expanding a business into new markets, comprehensive research and strategic planning are paramount. PESTLE analysis emerges as a powerful tool to explore uncharted territories. This framework delves into every critical detail that can either propel or hinder business activity in a foreign market. Unlike superficial analyses, PESTLE analysis dives deep into economic, cultural, and legal specifics, ensuring a holistic understanding of the external environment. Moreover, given the ever-changing dynamics of the global landscape, PESTLE analysis should be an ongoing process.

The ultimate goal of conducting a PESTLE analysis is to minimize risks and uncertainties for a company operating in unfamiliar territories. By thoroughly examining the current situation in a country and analyzing its historical experiences, businesses can gain valuable insights into potential future events. However, certain factors, such as natural disasters or international conflicts, remain unpredictable. In such cases, having a well-thought-out contingency plan becomes crucial to navigate unforeseen challenges successfully.

A well-executed PESTLE analysis serves as a compass, providing companies with valuable recommendations for their foreign market strategy. The thorough examination of political, economic, social, technological, legal, and environmental factors equips businesses with the necessary knowledge to make informed decisions and seize opportunities. Armed with such insights, companies can align their operations with the unique characteristics of each market and tailor their approach accordingly.

At times, businesses face tight deadlines and require prompt and reliable solutions. Our essay writing service stands ready to offer timely assistance, providing you with a comprehensive PESTLE analysis that meets your specific requirements. With a team of skilled professionals, we ensure that your analysis is delivered on time without compromising on quality.

In conclusion, embracing the power of a PESTLE analysis equips companies with a clear vision and a well-structured approach to navigate the complexities of international markets. A thorough assessment of the external environment provides the groundwork for making informed decisions, mitigating risks , and seizing opportunities. As businesses venture into a world of endless possibilities, proper preparation through PESTLE analysis becomes a catalyst for success, enabling them to thrive in diverse and dynamic global landscapes.

In a world where expansion is a constant aspiration, PESTLE analysis remains an indispensable ally for businesses seeking to chart their course towards growth, sustainability, and global success.

Frequently Asked Questions (FAQ) about PESTLE Analysis

• What is PESTLE analysis, and how does it differ from SWOT analysis?

PESTLE analysis is a strategic tool that examines the macro-environmental factors influencing a business, including political, economic, social, technological, legal, and environmental aspects. On the other hand, SWOT analysis evaluates both internal factors (strengths and weaknesses) and external factors (opportunities and threats) that impact a company. While PESTLE focuses on the external environment, SWOT delves into both internal and external aspects of a business.

• When should businesses use PESTLE analysis?

PESTLE analysis is particularly useful for companies looking to expand into new markets. It helps them thoroughly research and understand the various factors that could impact their business operations in unfamiliar territories . This analysis provides essential insights to strategize and make informed decisions when entering new markets.

• What are the components of a PESTLE analysis?

The components of PESTLE analysis include Political, Economic, Social, Technological, Legal, and Environmental factors. By analyzing these factors, businesses can gain a comprehensive understanding of the external environment and its potential effects on their operations.

• How often should a PESTLE analysis be conducted?

PESTLE analysis should be a recurring process, especially for companies operating in dynamic and ever-changing global markets. External factors can shift rapidly, making regular assessments vital to adapt and respond to new challenges and opportunities.

• How does PESTLE analysis help minimize risks for businesses?

PESTLE analysis enables businesses to identify potential risks and uncertainties in foreign markets. By examining political stability, economic conditions, social trends, technological advancements, legal regulations, and environmental issues , companies can develop contingency plans and mitigate risks associated with operating in unfamiliar territories.

• How does PESTLE analysis assist in strategic decision-making?

A thorough PESTLE analysis provides crucial insights into the external environment, allowing businesses to make informed strategic decisions. Understanding the political, economic, social, technological, legal, and environmental factors helps companies tailor their market entry strategies and adapt their products or services to meet the specific needs and demands of each market.

• Can PESTLE analysis be applied to specific companies?

Yes, PESTLE analysis can be tailored to evaluate the impact of external factors on specific companies. For example, the blog includes PESTLE analysis examples for well-known companies like Apple, McDonald’s, Amazon, and Coca-Cola. By conducting a company-specific PESTLE analysis, businesses gain valuable insights into the unique challenges and opportunities they might encounter .

• How can businesses prepare for potential environmental challenges?

PESTLE analysis addresses environmental factors, which include ecological issues like climate change and environmental regulations. Businesses can prepare for potential environmental challenges by adopting eco-friendly practices, minimizing their environmental footprint, and aligning their operations with sustainable and environmentally responsible initiatives.

• Where can businesses seek professional help with PESTLE analysis?

Businesses can seek professional assistance with PESTLE analysis from expert research paper writing services, like GradeSmiths. These services offer comprehensive and in-depth analyses tailored to specific business needs and deadlines, providing businesses with valuable insights to drive their expansion and decision-making processes.

• How does PESTLE analysis contribute to long-term success in the global market?

PESTLE analysis equips businesses with a holistic understanding of the external environment, enabling them to make strategic decisions that align with market dynamics. By minimizing risks, seizing opportunities, and adapting to changes in the global market, PESTLE analysis becomes a catalyst for long-term success and sustainability in an increasingly interconnected and competitive world.

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How to do a PESTEL analysis

PESTEL , also known as PEST is a descriptive analysis of the company’s environment. When we talk about the company’s environment or context, we refer to all those external factors that are relevant to the organization, so its analysis is vital for the generation of strategies or campaigns in the short and long term.

Today in Ingenio Empresa we explain what PESTEL analysis is, how it is done and a practical example.

Table of Contents

What is PESTEL analysis?

The PESTEL analysis consists of the description of the company’s context or environment through the consideration of factors:

• Technological
• Environmental

The analysis can be limited to the first 4 factors, remaining as a PEST analysis, since environmental or legal issues are not always applicable.

Some analysts go further by considering factors such as Industrial (PESTELI), Ethics (PESTALE) and Demographics (PESTALD).

What is PEST analysis for?

That said, PEST, PESTEL or whatever you want to call it, allows you to perform a strategic analysis to determine the current context in which the organization moves, which gives you an input for the creation of strategies to either take advantage of the opportunities obtained in the analysis, or act against potential risks.

This is why it is such a widely used tool by organizations. In addition, ISO standards such as 9001 include among their requirements the understanding of the organization’s context. Tools such as PESTEL evidences the fulfillment of these requirements.

Thus, we can consider 3 essential benefits of PESTEL:

• It is a tool of simple application, because it is very easy to understand and staff can appropriate it, this greatly facilitates the teamwork.
• It can be integrated with other tools such as SWOT or Porter’s Forces, and besides, it can be easily replicated in organizational strategy.
• It can be used in any type of organization (large, medium, small) or in large projects.

How to perform a PESTEL analysis

The PESTEL analysis allows us to characterize the context, understanding how it affects the product or service.

Actually, performing this analysis is not complex. How to do it is limited to reflection about the aspects of the environment that concern to the company.

Therefore, the success of the tool lies in the composition of the team that performs the exercise. Consider a team with knowledge of the company, participative. Better if it is made up of personnel who work in the field. Multidisciplinary. With people who are curious and informed about the country’s situation. Workers from different processes who know what they are talking about is vital.

Once the team is defined, prepare the worksheet. Although for group exercises it is convenient to use sheets of paper and post-it notes, I believe that this is not the case. A computer, an Excel spreadsheet (at the end of the post I will give you one) and a group of people ready to define the business environment is more than enough.

A good practice is to define the type of impact (positive or negative) and whether it will be short, medium or long term.

Then, the analysis of each factor begins:

Political factors

Evaluates how government intervention may affect the company.

• Changes in government and its electoral programs
• Fiscal policy
• Government subsidies
• Wars and conflicts
• Changes in legislation
• Changes in trade agreements
• International agreements
• Internal and external conflicts
• Political movements

An analysis of this type can show that the company must make “strategies” towards the politicians of a country so that the laws that are generated in the government bring benefits. Taxes placed on soft drinks or tobacco are examples of this, and companies can generate strategies to remove these measures.

Economic factors

Consider how the national and international macroeconomic environment may affect the organization.

• Employment rates
• Economic cycle
• Economic decisions of other governments
• Currency devaluation and revaluation
• Trends in distribution channels
• Government deficits
• Consumer confidence index
• Market protectionism

For example, the imposition of tariffs by Donald Trump’s decision on Toyota is part of an economic variable to be taken into account.

Social Factors

Evaluates culture, religion, beliefs, habits, preferences, etc.

• Education level
• Purchasing patterns
• Customer opinions
• Opinions or perception of the media
• Income level

Here’s a far-fetched example: Think that you have a company producing vacuum-packed meat and you want to open a plant on the Asian continent. Considering that the cow is a sacred animal in India, would you think of this country to build the factory there?

Technological factors

Today more important than ever. Every day brings a technological advance and there is no sector that cannot benefit from it. In my experience, this is the most difficult and untapped aspect of all. The challenge is for the organization to be aware of what kind of technologies can benefit it.

• Machine Learning
• New programming codes
• New machinery or technological devices
• 3D printing
• Technology replacement
• Software in the cloud
• Obsolescence
• Incentives for technology use

Ecological or environmental factors

Evaluates how the environment affects the organization.

• Climate change
• Consumption of non-renewable resources
• Environmental policies
• Liquid gases
• Natural hazards

For example, health centers, which are required by law to separate hospital waste.

Legal factors

Companies must comply with the law and the law is constantly changing. Sometimes not only the law of the country where the organization is located applies, but also the law of the country where you want to be.

• Intellectual property
• Occupational health and safety
• Sector regulation
• Protection laws
• Minimum wage

Example of a PESTEL analysis of a company

Consider a company that manufactures water purifying filters. In their strategic planning exercise, they perform a PESTEL analysis to determine the risks and opportunities of the business.

In the political variables they consider:

• A recent change of president.
• Mayoral elections to be held in two years.
• Approaches to conclude a trade agreement with Central America.

In the economic variables they define:

• Currency changes.
• The effect of the increase in the interest rate.
• The increase in exports in the last year.

Within the social variables they define:

• Change in society’s thinking about self-care.

Then in the technological variables:

• 3D printing as an opportunity to optimize costs.
• Loss of magnetic information.
• In the environmental variables they define:
• The work to obtain environmental certifications.
• The work with production waste.

Finally, in the legal variables:

• The mandatory implementation of the occupational health and safety management system.

Having done this, the company defines how these factors impact the expected timeframe and the type of impact.

The result is as follows:

The PEST analysis and its relation to the SWOT analysis

The PEST analysis can serve as an input for the SWOT analysis . This is usually done as a way of addressing chapter 4 of the ISO 9001 standard for the implementation of a quality management system.

If we take into account that the PEST describes the organizational environment, many of the results of this analysis will imply a large part of the opportunities and threats of the SWOT Analysis. Hence, both tools can be integrated to determine the context of the organization.

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PESTLE Analysis: Explained with Examples & Templates

Edraw content team, do you want to use pestle analysis.

EdrawMind helps move ideas forward, faster and better. Learn from this PESTLE Analysis complete guide to know everything about PESTLE. Just try it free now!

1. What is PESTLE Analysis?

The PESTLE analysis is a tool to identify macro (external) forces an organization faces in its business. More specifically, PESTLE analysis studies the external challenges of a business. And guides to overcome them.

The external challenges are Political, Economic, Social, Technological, Legal, and Environmental. The word "PESTLE" is an acronym for these six factors.

PESTLE analysis is an important marketing tool. It helps every business identify significant changes in the broad business background, thus helping in better strategic business planning.

There are many variants of the analysis to fulfill the needs of businesses with unique requirements. They can use variants as per their needs. For example, if the technological factor doesn't matter to an industry, they can choose a variant that excludes it. A few widely used variants of PESTLE analysis are STEEPLE, SLEPT, and PESEL.

2. What are the 6 PESTLE Factors? With Complete Lists

Now we'll discuss each factor of the PESTLE analysis with examples and try to understand how they impact a business.

1. Political:

The P stands for political, the first and an essential factor of the PESTLE analysis model. Political factor determines how government and government policy may impact a business. Here we analyze the government's policy-making patterns regarding business laws and regulations like tax guidelines. It also deals with business to political relations and their impacts on the overall market. The political stability or instability in a country and their possible outcomes. Government's behavior with businesses in general. The political factors deal with such and many other questions.

Summarization of the political sub-factors:

• Government stability
• Political policy
• Tax guideline
• Fiscal laws
• Trade regulation
• Safety regulation
• Employment laws

2. Economic:

E stands for economic. The economy significantly affects a business's organizational operations. For example, equipment prices and maintenance costs increase with inflation and interest rates increment. Also, with a rise in the currency exchange rate, the duty on imports of raw materials increases, ultimately leading to a rise in the product price. The economy directly impacts the growth and performance of the industry. The end consumer's financial state is also essential. An affordable and quality production puts a base of a successful business; we can achieve it only when the economic factor is carefully analyzed.

Summarization of economic sub-factors:

• Inflation rates
• Interest rates
• Economic growth
• Employment or unemployment rates
• Currency exchange rates
• Raw material costs

S is for social . This factor helps a business understand its end consumer needs. The focus remains on the social environment, public behavior, and identifying emerging trends among the people. It deals with the customers' values, hopes, desires, and fears. It also discusses what motivates or disgusts the general masses and why. Careful analysis of social factors is crucial for a good business plan and strategy. The social factor helps companies do a robust customer analysis to solve their customers' problems with their products or service.

Summarization of social sub-factors:

• Demographic characteristics
• Education levels
• Custom and values of the population
• Cultural trends
• Attitude changes
• Changes in lifestyles

4. Technological:

Technological factors consider the rate of technological development and innovation that could affect a market or industry. Technology is overgrowing, and the industry should be able to acquire that technology as soon as possible to remain in the race before the competition overtakes the market.

Technology also poses threats. For example, it is also possible that a particular product could be replaced by a much cheaper and more advanced alternative of another company. Therefore, keeping oneself updated on the new trends and advancements in an industry is necessary. Every organization must possess the latest technology required to develop and enhance its products or services.

Summarization of technological sub-factors:

• Changes in digital or mobile technology
• Development

It is crucial for an organization to know what is legal and allowed within the territories of the country they operate. They also must be aware of any possible change in laws or legislation in the country and its impact on industry operations.

Summarization of legal sub-factors:

• Employment legislation
• Consumer law
• Healthy and public safety
• Local trade regulation and restrictions
• International trade regulation and prohibitions

6. Environmental:

A successful business model gives importance to the environment . Carbon footprint, climate change, and waste disposal are critical for it. Also, the environmental impacts are essential for the low cost and good quality production. For example, a product suitable for a cold atmosphere should be prepared in a low-temperature area rather than investing in air conditioning. Also, proper environmental conditions ensure that the products remain fine for a more extended period

Summarization of environmental sub-factors:

• Recycling procedures
• Carbon footprint
• Waste disposal
• Sustainability

3. When to use PESTLE Analysis?

PESTLE analysis is used before a strategic business decision. The analysis effectively detects and understands broad, long-term trends in the business background. Therefore, it is extensively used in a range of business planning situations. Let's see where we can use it.

Strategic business planning

With PESTLE analysis, we can obtain contextual information about the business direction, whether the business is growing or not? Growth targets, brand positioning, and risks to productivity ratios.

Expansion of the business

The PESTLE analysis may also help determine when and where a business should expand. It could be determined by considering labor costs, tax laws, and the need for the product where the industry plans to expand.

Workforce Planning

PESTLE analysis can help to plan the required workforce for an organization. For example, a technical workforce will be required for a technology-related business. PESTLE analysis help to choose the right workforce by considering factors like availability of labor, availability of skilled labor, and the cost.

Product development

A PESTLE analysis help determines if a product or service still fulfills the needs of the consumers in the marketplace. It may also tell what product would suit the current market conditions. Also, it reveals why a product fails or succeeds in similar business conditions.

Marketing Planning

PESTLE analysis helps in marketing a brand or product effectively. It deals with the factors required to sell a product proficiently to the customers. Many major organizations use the PESTLE analysis for product promotion and marketing.

Organizational change is a PESTLE analysis example. It deals with the possible opportunities and threats around labor changes, such as skills, increment or decrement in the labor cost, shortages, or current workforce capabilities.

4. How to do PESTLE Analysis?

Before doing PESTLE analysis, it is better to arrange a team of experts for the task. A team could be organized based on six PESTLE factors. It is necessary to obtain information on each area of the PESTLE model. Every element has its importance. If anything is left out, the analysis would not be much helpful. Therefore, field experts are required for this analysis, i.e., a technical team member could be hired to research the technological aspects. Likewise, an environmentalist could be employed to study the environmental factors.

There are ten steps to take to do a successful PESTLE analysis.

• Identify the scope of research that covers the present and possible future scenarios.
• Decide who will collect the information and how.
• Identify appropriate sources of information.
• Gather the information. Make sure to arrange the information correctly to be used again easily.
• What did you find? Analyze the information carefully.
• Make a list and put the items in terms of their importance. Most important things go first, and less important things go last.
• Identify the options you have to address the issues.
• A discussion document for all stakeholders.
• Discuss the findings with stakeholders.
• Discuss the plan and decide on actions to take.

5. PESTLE Analysis Examples

Here are three examples of PESTLE analysis of three highly successful companies.

Amazon PESTLE analysis indicates the significant threats that might pose a problem for the company. Also, it shows the growing opportunities that are being developed with the ever-increasing technology and economy-these opportunities aid in holding their place in the online market.

Google PESTLE Analysis tells that they have many opportunities and some threats. They must prepare a solid plan which can aid them to survive in the highly certain economic factors in any competitive market. Google Should develop a more secure medium for the users.

Tesla's PESTLE Analysis example highlights many vital elements that have been helpful in the company's growth. From the economic perspective, the company has many challenges, but at the same time, from environmental and technological factors company's rapid growth is evident.

6. Pros and Cons of PESTLE Analysis

It encourages critical thinking.

It helps to prepare the business for the future.

It helps to manage business risks and threats.

It helps businesses capitalize on new opportunities.

It is a straightforward approach with a simple framework.

It takes a lot of time to process.

It involves many steps.

It needs to be done at regular intervals.

External factors could change quickly, so it cannot be easy to present and analyze up-to-date information.

7. Key Takeaways

PESTLE analysis helps in the development and growth of businesses and organizations. It helps to analyze strong and weak areas of industries. A proper PESTLE analysis report may help you grow your business. With EdrawMind, you can create eye-appealing PESTLE analysis graphs and reports for your business with a few clicks and easily share them with your team members. You can also select from 100s of already present templates and customize them according to your needs.

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IKEA’s PESTLE Analysis Essay

Introduction, reference list.

Starting the analysis of IKEA, it is critical to investigate the sector in which it works, its basic peculiarities, competitors, and characteristics of the target audience. First of all, the brand can be characterized as a multinational group that designs, manufactures, and sells ready-to-assemble furniture, home accessories, kitchen appliances, and other goods that can be used to decorate or improve dwellings ( Vision and business idea n.d.). At the moment, IKEA holds leading positions in the world as the major furniture retailer, and the tendency preserves in the UK because of the popularity and recognizable image of the organization. It is focused on young and fashionable consumers who follow modern trends and will buy offered products ( Vision and business idea n.d.). The focus on this target audience presupposes the adherence to a particular model and stylistics to preserve the high level of interest towards the proposed goods.

To better understand the current position of IKEA, PESTLE analysis should be performed as it provides an opportunity to consider multiple factors impacting the firm at the moment (Berry 2015).

The political factor should be considered a significant force affecting the further development of the brand. The fact is that IKEA is a global company that functions in many states across the world. For this reason, to remain within the legal environment of the UK, it has to consider the existing taxation rules and demands to companies that are accepted in the country (Gamble, Peteraf & Thompson 2018). At the same time, export, import, and other significant laws should be taken into account. Nevertheless, at the moment, there are no significant barriers in the country that might have a negative impact on the further evolution of IKEA as it acts in accordance with the regulations established by the UK government. The stability of the state and its laws can serve as a beneficial factor promoting the further improvement of the brand’s position in the area.

IKEA has to consider the current economic showings of the state in which it wants to operate, such as economic growth, inflation rates, stability, unemployment, and individuals’ income. For this reason, it’s functioning in the UK can be taken as a desired option because of the reliability of the state’s economy. At the moment, it is one of the world’s most effective models characterized by high trustworthiness, stability, and interest (Evans 2019). The currency, Libra, is also recognized as a potent financial tool that can be used at the international level (Venkataraman & Pinto 2017). Citizens of the UK have a stable and comparatively high income, which means that their bargaining power increases. That is why the given factor should be considered beneficial for the future success of the brand.

This aspect represents current values and demographic characteristics of the population that impacts their decision-making and buying preferences. Analyzing this factor, one can observe the beneficial situation for IKEA’s development. Today, people in the UK are conscious of a particular lifestyle that will emphasize their individuality and specific attitude to decoration (Evans 2019). For this reason, the popularity of the brand in the country remains high and even increases. IKEA meets the current demands of community members for unusual, creative, bright, and affordable furniture that will help to self-actualize and make dwellings look unique. That is why the firm’s marketers can succeed in attracting new populations and increasing sales by emphasizing the ability to adhere to a particular lifestyle when buying IKEA’s goods, appliances, or other products (Kotler, Kartajaya & Setiawan 2016).

Technological

IKEA recognizes the critical importance of technological factors for its performance and success. As it has already been stated, it is focused on the promotion of its products among the representatives of the young generation who appreciate unusual and innovative solutions. For this reason, the company invests a significant amount of its funds in the development of technology incentives that would help to create new products looking even more attractive to the youth because of the combination of various aspects (Inter Ikea Group 2018). Additionally, IKEA constantly launches new lines that combine the freshest perspectives on design, furniture, and sustainability with the primary aim to meet the diverse demands of its customers. For this reason, technology can be considered a facilitator of the brand’s further evolution.

There are several issues that IKEA should monitor to avoid the emergence of legal claims. First of all, it should create appropriate working conditions for employees belonging to facilities placed in the UK to ensure that they meet the existing demands (Inter Ikea Group 2018). The brand emphasizes the fact that no child labor or any other illegal forms of exploitation are utilized, which means that there are no discrimination or employment laws that can be associated with its functioning and further development.

Environmental

IKEA also tries to achieve high sustainability levels. In accordance with its reports, the company uses only safe and clear raw materials to create its products ( IKEA facts and figures 2018). It means the absence of possible claims regarding the deterioration of clients’ health. At the same time, the brand invests in the development of renewable energy in poorer nations to meet their demands for it (Inter Ikea Group 2018). Creating solar and wind panels, the company wants to replace traditional sources with renewable ones, which becomes critical regarding the increased demands for sustainability. These factors show the focus on the promotion of various environmentally friendly approaches that improve the brand’s image globally and contribute to its becoming a leader in this sphere (Kotler & Armstrong 2015).

In such a way, the given PESTLE analysis shows that the position of IKEA in the UK remains stable. It apparently possesses a particular competitive advantage over its rivals because of the absence of certain negative factors that might limit its further development and evolution (Kotler & Keller 2015). For this reason, one can predict the future empowerment of the firm and its dominance in the selected market segment.

Berry, E 2015, Pestle analysis essentials , CreateSpace Independent Publishing Platform, New York, NY.

Evans, I 2019, ‘UK consumer behavior: what do the British want?’ , WordBank , Web.

Gamble, J, Peteraf, M & Thompson, A 2018, Essentials of strategic management: the quest for competitive advantage , McGraw Hill Education, New York, NY.

IKEA facts and figures 2018, Web.

Inter Ikea Group 2018, Inter IKEA Group financial summary FY18 , Web.

Kotler, P & Armstrong, G 2015, Principles of marketing , 16th edn, Pearson, New York, NY.

Kotler, P, Kartajaya, H & Setiawan, I 2016, Marketing 4.0: moving from traditional to digital , Wiley, Hoboken, NJ.

Kotler, P & Keller, K 2015, Marketing management , 14th edn, Pearson, New York, NY.

Venkataraman, R & Pinto, J 2017, Operations management: managing global supply chains , SAGE Publications, Boca Raton, FL.

Vision and business idea n.d., Web.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2024, February 25). IKEA’s PESTLE Analysis. https://ivypanda.com/essays/ikeas-pestle-analysis/

"IKEA’s PESTLE Analysis." IvyPanda , 25 Feb. 2024, ivypanda.com/essays/ikeas-pestle-analysis/.

IvyPanda . (2024) 'IKEA’s PESTLE Analysis'. 25 February.

IvyPanda . 2024. "IKEA’s PESTLE Analysis." February 25, 2024. https://ivypanda.com/essays/ikeas-pestle-analysis/.

1. IvyPanda . "IKEA’s PESTLE Analysis." February 25, 2024. https://ivypanda.com/essays/ikeas-pestle-analysis/.

Bibliography

IvyPanda . "IKEA’s PESTLE Analysis." February 25, 2024. https://ivypanda.com/essays/ikeas-pestle-analysis/.

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Pestel Analysis | Pestel Analysis Guide with Samples and Graphs

1. introduction.

In this article, we will learn how business organizations analyze their external environment by applying a strategic management framework- PESTEL. The article first explains the meaning and purpose of doing PESTEL analysis, and then explains how businesses conduct PESTEL analysis by taking real-world examples.

2. What is PESTEL analysis?

PESTEL analysis is the strategic management framework, used to scan the external environmental forces that shape the overall business environment. PESTEL stands for- political, economic, social, technological, environmental and legal.

3. What is PESTEL analysis in business?

In the business world, the PESTEL analysis is an environment scanning tool that identifies the key political, economic, social, technological, legal and environmental factors that have a profound influence on business.

These environmental factors have varying implications for the business organizations, depending on the intensity and duration of impact.

Some environmental trends could be temporary, and have little impact on business. While, some environmental trends may have long-term implications, and require immediate attention.

4. What is the purpose of PESTEL analysis?

The purpose of PESTEL analysis is to:

Keep the track of external factors that impact the organization, and;

Analyze the drivers of change in strategic business environment, so that;

Timely actions could be taken to leverage the available opportunities, and minimize the external threats.

5. What does a PESTEL analysis do?

PESTEL analysis provides a holistic view about the contextual factors that set the overall business direction.

It helps business organizations in determining the market attractiveness for existing/new products.

It also explains how external environmental factors possibly influence the brand positioning, growth and productivity.

6. What is the PESTEL analysis used for?

PESTEL analysis is used to take well-informed and timely business decisions by understanding the changing external environment.

Following examples explain where and how managers/policymakers use PESTEL analysis while taking important decisions:

Risk analysis- For example, Microsoft decided to scale down operations in Russia after assessing the growing political tensions between home and host country (political factor)

Financial analysis- For example, Costa Coffee adjusted its financial modelling (by revisiting the revenue and profitability growth forecast) based on the rising inflation trends (economic factor)

Strategic planning- For example, Apple decided to reposition itself as an environment-friendly brand after assessing the consumers’ growing environment consciousness (social factor)

Workforce planning- Walmart started investing on the automation after assessing the skilled labor shortage issue (economic and technological factors)

Product development – Apparel brands in colder regions have started adding more summer and spring clothing items after assessing the change in weather conditions (environmental factor)

7. How to do PESTEL analysis?

The business organizations can conduct the PESTEL analysis by:

Scanning the external environment to identify major environmental factors that reside in the company’s political, economic, social, technological and legal environment.

Analyzing implications of each environmental factor for business.

Here we explain each component of PESTEL framework in detail:

7.1. Political factors

1. what are political factors.

Political factors refer to the government decisions and actions that directly or indirectly influence the business. They may include:

Taxation policies

Foreign trade policy

Political conflicts etc.

2. How to do political, environmental analysis?

Assess the political environment stability at the local and international level

Evaluate the government’s policies towards taxation, tariffs, competition and anti-trust regulations etc.

Analyze the impact of government policies on business (both- short and long-term)

3. Political factors- recent real-world examples

The Ukraine-Russia war directly affected the Microsoft. In its support to Ukraine, Microsoft spent around $126 million in scaling down its operations in Russia.

Indian government’s decision to cut corporate tax from 30% to 22% attracted many new manufacturing firms, and made India an investment destination.

7.2. Economic factors

1. what are economic factors.

Economic factors refer to all economic indicators that can directly and/or indirectly influence the short-term and/or long-term business success. Examples include:

Rising production costs due to inflation and labor price increase

Reducing disposable income

Exchange rate volatility

Rising interest rate

2. How to do the economic environmental analysis?

See the economic indicators by visiting websites sharing economic data

Forecast economic growth, and analyze its short and long-term impact on customer behavior

Evaluate the impact of current and forecasted economic growth on overall business performance

3. Economic factors- recent real world examples

Rising inflation and labor costs in China are affecting the profitability of Xiaomi, as its production cost has increased over time.

In response to the rising inflation, Costa Coffee has increased its prices twice in a single year, from £2.95 to £3.30.

7.3. Social factors

1. what are social factors.

Social factors refer to the demographic factors, consumer attitude and opinions, their buying patterns, living standards, religious and ethnic trends, and socio-cultural changes that influence the business performance. Some examples of social factors are:

Growing health consciousness

Growing culture of sharing life events over social media

Changing age distribution

Growing preferences for work-life balance

2. How to conduct social environmental analysis?

Spend on customer, competitor and market research to capture changing social trends.

Look at the changing demographics, forecast population growth, and interact with consumers to analyze the possible change in their attitude.

3. Social factors- recent real life examples

Considering the growing ‘vegan’ trend in society, Costa Coffee is planning to expand plant-based options in its menu to capture this opportunity.

As the proportion of youth is growing, it is compelling Marriott to reinvent itself to match the preferences, interests and spirit of young travelers.

7.4. Technological factors

1. what are technological factors.

Technological factors refer the manufacturing techniques, and marketing, logistics and e-commerce technologies. These factors influence how businesses produce, sell products, and interact with the stakeholders.

Some examples of technological factors that are currently shaping the business environment are:

Artificial intelligence, automation and robotics

R&D on tech innovations

Collaborations for technology transfer

Technology infrastructure etc.

Laws regulating cybercrimes

2. How to conduct the technological environment analysis?

Keep an eye on emerging disruptive technologies

Evaluate what competitors are doing, where they are investing and why

Conduct a cost-benefit analysis of emerging technologies

Analyze the potential long-term consequences of adopting/not adopting a particular technology

Evaluate the laws governing the use of a particular technology

3. Technological factors- recent real life examples

In 2021, the US government spent $157 billion on R&D to accelerate innovation in the tech sector. The government aims to increase the budget by 9% in the coming years .

Marriot plans to deploy the robots to reduce the costs, and reimagine the guest experience.

7.5. Environmental factors

1. what are environmental factors.

The environmental factors refer to the physical conditions in which the business organizations operate. It may include:

Weather patterns

Air, land and water pollution level

Industrial waste

Hazardous chemicals

2. How to conduct environmental analysis?

Business organizations need to evaluate:

Physical environment to identify the potential threats

Impact of weather changes on production, sales and logistics

Environmental regulations related to the use of natural resources, pollution, emissions and other factors that could harm the natural environment

3. Environmental factors- real life examples

Unilever has set world’s most ambitious sustainability goals. In order to protect the environment, Unilever aims to cut emissions to zero level, both from its own, and from its suppliers’ operations by 2039- Bloomberg reports.

In 2017, Volkswagen paid $2.8 billion fine for cheating on government emission tests- as reported by Wall Street Journal .

7.6. Legal factors

1. what are legal factors.

Legal factors refer to how legislations could influence certain business areas. Some common legal factors that directly influence the business organizations are:

Intellectual property law

Health and safety law

Consumer protection law

Legislations related to employee rights

Legislations related to imports/exports and taxation etc.

2. How to conduct legal, environmental analysis?

Carefully study and understand the laws and regulations governing the primary and secondary industries in which business organizations operate.

International businesses have to understand and comply with the different legislations around the world to comply with the law.

Inability to conduct ‘legal’ analysis can result into expensive and reputation-damaging lawsuits.

3. Legal factors-recent real life examples

Strict data privacy laws are making the business environment tough for smartphone manufacturers, like Xiaomi and Apple. Xiaomi faces intense criticism for violating privacy law. Apple is facing a third class action privacy lawsuit in a row.

Anti-trust laws inhibit the monopoly. In 2020, Google faced a civil lawsuit for monopolizing the search advertising.

Intellectual property law protects the businesses from patent infringements. Recently, Netflix faced a patent infringement lawsuit for using the Broadcom’s music.

After exploring ‘how to do PESTEL analysis’, now let’s discover how PESTEL analysis could be applied in a real business environment.

8. PESTEL analysis examples

Here are some real world PESTEL analysis examples:

8.1. PESTEL analysis of social media industry

Let’s choose the social media industry as an example of a PESTEL analysis:

1. Political factors

Political conflicts (like US-China, US-Russia, and US- North Korea) result into the ban on various social networking sites.

Social networking sites are criticized for not controlling fake news about political parties during election campaigns.

Overall, unstable political environment imposes a major threat to social media industry.

2. Economic factors

Social networking sites are free for users around the globe. Therefore, the economic downturn imposes little impact on social media use. Economic inactivity rather boosts the use of social media, as people have more time to spend on social networking sites.

Following graph shows the additional time that people spent on different social networking sites during the pandemic:

Source: Statista

But, the economic downturn during the pandemic forced the companies to cut their marketing budgets. It directly hurt the social media ad revenue.

Following graph shows the advertising cut by different countries during the pandemic:

Source: World Economic Forum

Overall, the economic downturn, and resultant reduced spending on marketing threatens the industry by reducing its ad revenue.

3. Social factors

Tech savvy consumers love spending time on social media. Considering this behavioral shift, companies are now increasing the proportion of digital marketing in the overall marketing budget.

Following graph shows the increase on digital marketing spending from 2021 to 2026:

Source: Oberlo

Shift to digital marketing increases the ad revenue of industry players.

Growing Gen Z has a global mindset. These tech-savvy, globally connected users use multiple information channels, and spend more time on social media.

But, rising anti-social media sentiments impose a threat to the industry. The problematic use of social media negatively affects the mental health. Growing awareness about the dark side of social media could hurt the global social media industry.

Despite the negative sentiments, the overall social environment presents growth opportunities to the social media industry.

4. Technological factors

Emergence of technologies like augmented reality, AI and virtual reality are revolutionizing the social media industry.

Growing popularity of gaming, videos and social messaging accelerates the industry growth.

The technological development presents an opportunity to bring innovation, and target tech-savvy customers by investing on new technologies.

5. Environmental factors

Stringent environment protection regulations affect the social media industry, as social media players are induced to comply with the environment regulations.

The manufacturing of internet routers and related technologies lacks the sustainability element.

The industry faces criticism for harming the environment.

Overall, the environmental factors impose a threat to the industry, and compel players to integrate sustainability in their business operations.

6. Legal factors

The social media users are increasingly concerned about the data privacy

Data protection regulations are compelling social networking sites to comply with the law

Inability to comply with the data protection regulations increase the risk of expensive, reputation-damaging lawsuits

Overall, the strict legal environment imposes threat to the social media industry.

PESTEL summary- social media industry

Table 1- PESTEL analysis of social media industry

Here is another PESTEL analysis example.

8.2. PESTEL analysis for amazon

Growing political tensions affect the Amazon. Like recently, Amazon had to close its operations in China, and faced $200,000 fine in Russia for failing to delete an account that Russian government deemed illegal- reported by Reuters .

Government’s growing support for e-commerce facilitates the Amazon expansion

The strict actions taken by the government against cybercrimes support the Amazon by reviving the customers’ trust.

Despite political tensions, the overall, political environment present opportunities to Amazon.

Fast E-commerce growth in developing world regions present growth opportunity to Amazon:

People’s disposable income is rising, which means they have more money to spend on online shopping.

Rising labor costs are affecting the Amazon’s profitability.

Overall, the economic environment presents both- threats and opportunities to Amazon.

Consumers’ preferences for online shopping are growing, as depicted in the following graph:

Source: Pew Research Center

Changing lifestyles, rising consumerism and growing internet penetration in developing countries encourage people to spend more on online shopping

Overall, social environment presents growth opportunity to the Amazon.

Emergence of new technologies (like AI and virtual reality) is optimizing the online shopping experience of Amazon consumers

Quick technology development compels Amazon to increase R&D expenditure to stay ahead of the competition

Technological development, and the resultant emergence of online shopping platforms has intensified the competition for Amazon.

Overall, technological environment presents both- opportunity (optimize user experience) and threat (increase R&D, growing competition) to Amazon

Growing environment consciousness encourages customers to shop online, which favors Amazon.

Despite being an e-commerce platform, Amazon is still under pressure to reduce traffic-related emissions, and responsibly handle its logistics operations.

Environmental factors raise sustainability pressure, but Amazon is taking it as an opportunity to build a responsible brand image.

The employee health and safety regulations are getting strict. Recently, Amazon was fined $60,000 for failing to ensure the workers safety.

Amazon also paid a heavy fine of $135,000 for selling products in sanctioned countries.

Overall, a strict legal environment imposes threat to Amazon.

PESTEL summary- Amazon

Table 2- PESTEL analysis for Amazon

Above two examples show how companies can apply the PESTEL framework to understand the macro business environment.

For further practice, you can choose any company and apply PESTEL framework on it. You can download the free PESTEL analysis template from here .

Here, it is important to note that the PESTEL framework is not without limitations. To know about PESTEL advantages and disadvantages, read the next section.

9. Advantages and disadvantages of PESTEL analysis

10. conclusion.

To sum up, PESTEL is a useful strategic management tool that businesses use to analyze their external environment. Despite some limitations, the framework provides a holistic view, and helps policy makers, senior management and marketers in making more well-informed decisions.

11. Works cited

https://www.cnn.com/2022/07/26/tech/microsoft-earnings/index.html

https://m.economictimes.com/news/economy/policy/corporate-tax-cut-makes-india-an-investment-destination-to-attract-foreign-firms-to-set-up-units-fm/articleshow/71246759.cms

https://www.plymouthherald.co.uk/whats-on/food-drink/costa-coffee-angry-customers-threaten-7170240#:~:text=Costa%20Coffee%20has%20increased%20its,cost%20of%20living%20crisis%20continues.

https://www.whitehouse.gov/wp-content/uploads/2021/05/ap_14_research_fy22.pdf

https://www.bloomberg.com/news/articles/2020-06-14/unilever-to-cut-emissions-to-zero-by-2039-adopt-carbon-labeling#:~:text=Unilever%20NV%20is%20releasing%20a,of%20its%20suppliers%20by%202039.

https://www.wsj.com/articles/judge-slaps-vw-with-2-8-billion-criminal-fine-in-emissions-fraud-1492789096

https://www.statista.com/statistics/1116148/more-time-spent-social-media-platforms-users-usa-coronavirus/

https://www.weforum.org/agenda/2020/06/coronavirus-advertising-marketing-covid19-pandemic-business/

https://www.oberlo.com/statistics/digital-ad-spend

https://www.reuters.com/technology/amazon-faces-fines-up-200000-russia-over-banned-content-agencies-2022-10-04/

https://www.weforum.org/agenda/2021/09/e-commerce-fast-growth-online-sales-china-europe-america/

https://www.pewresearch.org/internet/2016/12/19/online-shopping-and-purchasing-preferences/

https://www.reuters.com/legal/litigation/amazon-faces-new-round-penalties-worker-safety-violations-2023-02-01/

https://www.forbes.com/sites/siladityaray/2020/07/09/amazon-agrees-to-pay-135000-in-settlement-for-violating-us-sanctions/

https://app.conceptboard.com/board/6qmo-3ec3-e8bk-m983-eo0b

Warning! This article is only an example and cannot be used for research or reference purposes. If you need help with something similar, please submit your details here .

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Barclays Bank PESTEL Analysis

Before we dive deep into the PESTEL analysis, let’s get the business overview of Barclays Bank.

• History and Origin:  Barclays has its roots in the goldsmith banking business established in the City of London in 1690. James Barclay became a partner in the business in 1736, and the company name “Barclays” became associated with it.
• Barclays UK : This division provides retail banking, local business banking, and wealth management services within the UK.
• Barclays International : This covers corporate banking, investment banking, and wealth management operations outside the UK.
• Retail Banking : Current accounts, savings accounts, mortgages, personal loans, and other retail banking services.
• Credit Cards : Under the Barclaycard brand, they offer credit card services in many countries.
• Wealth Management : Investment management, wealth planning, and private banking services.
• Corporate Banking : Business loans, treasury solutions, commercial mortgages, and other corporate finance services.
• Investment Banking : Financial advisory, underwriting, and brokerage services.
• Financial Performance 2022 : Refer to the image below

Here is the PESTEL analysis of  Barclays Bank

A PESTEL analysis is a strategic management framework used to examine the external macro-environmental factors that can impact an organization or industry. The acronym PESTEL stands for:

• Political factors: Relate to government policies, regulations, political stability, and other political forces that may impact the business environment. 
• Economic factors: Deal with economic conditions and trends affecting an organization’s operations, profitability, and growth. 
• Sociocultural factors: Relate to social and cultural aspects that may influence consumer preferences, lifestyles, demographics, and market trends.
• Technological factors: Deal with developing and applying new technologies, innovations, and trends that can impact an industry or organization. 
• Environmental factors: Relate to ecological and environmental concerns that may affect an organization’s operations and decision-making.
• Legal factors: Refer to the laws and regulations that govern businesses and industries. 

In this article, we will do a PESTEL Analysis of Barclays Bank.

PESTEL Analysis Framework: Explained with Examples

• Regulatory Environment:  The banking sector is highly regulated, and any changes in banking laws and financial regulations can impact Barclays’ operations. These regulations include capital requirements, liquidity standards, and customer protection measures.
• Brexit:  Barclays, being a UK-based bank, has been affected by the political implications of Brexit. Uncertainties surrounding Brexit negotiations, potential economic implications, and changes in trade relationships have posed challenges for the bank.
• Global Political Relations:  Barclays has a global presence, and hence, its operations in different countries are susceptible to the political relationships between the UK and those countries. Bilateral and multilateral relations can influence the bank’s business in particular regions.
• Public Perception and Trust:  The banking industry has been under scrutiny, especially after the 2008 financial crisis. Political narratives focusing on banking accountability, transparency, and ethical conduct can shape public opinion and influence the bank’s reputation.
• Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) Policies:  Stringent AML and CTF regulations require banks like Barclays to invest significantly in compliance measures, monitoring, and reporting.

• Interest Rates:  The central banks’ decisions on interest rates directly impact Barclays’ lending and borrowing rates. Higher interest rates can increase the cost of borrowing, potentially reducing loan demand, but can also lead to higher interest income for the bank.
• Economic Growth:  The overall economic growth rate of countries where Barclays operates influences the demand for banking services. In thriving economies, businesses and individuals are more likely to borrow, invest, and save.
• Exchange Rates:  Being a global bank, Barclays engages in significant foreign currency transactions. Fluctuations in exchange rates can impact the bank’s foreign investments, assets, and revenue from international operations.
• Inflation:  Inflation rates affect the purchasing power of consumers and businesses. High inflation can erode the real value of savings, affecting the bank’s deposit base and influencing interest rates.
• Property Market Dynamics:  The property market’s health is crucial for Barclays, given its exposure to mortgages. A buoyant property market can increase mortgage demand, while a downturn can raise the risk of defaults.
• Consumer Spending and Confidence:  Economic factors influencing consumer confidence can determine spending behaviors, affecting demand for various banking products like credit cards and personal loans.
• Public and Private Debt Levels:  High public or private debt levels in economies where Barclays operates can influence the bank’s lending practices and risk assessments.

Sociocultural

• Changing Customer Expectations:  With the advent of technology, customers’ expectations from banking services have evolved. They expect seamless online banking, instant services, and personalized experiences. Barclays needs to cater to these changing expectations to remain relevant and competitive.
• Financial Literacy:  The level of financial literacy among the population impacts how customers interact with banking services. Educating customers can increase financial product use and reduce the risk of defaults.
• Cultural Attitudes Towards Debt:  Different cultures have varying views on borrowing and debt. In some cultures, taking on debt might be seen negatively, while others view it as a standard financial strategy.
• Ethical Banking:  There’s a growing trend towards ethical banking, where customers prefer banks that follow ethical practices, invest in sustainable ventures, and avoid sectors like fossil fuels.
• Urbanization:  As more people move to urban areas, there’s a change in banking needs, with possibly a higher demand for digital banking services and lesser dependency on physical branches.
• Attitude Towards Savings:  Societal attitudes towards savings vs. spending can significantly impact a bank’s deposit base and the demand for investment products.
• Globalization and Mobility:  As people become more globally mobile, there’s a need for banking services that cater to international clients, expatriates, and frequent travelers.

Technological

• Digital Banking:  The rise of online banking platforms and apps has shifted how customers interact with banks. Barclays must continually innovate its digital offerings to enhance customer experience and meet the increasing demand for online services.
• Cybersecurity:  With the increase in digital transactions and online banking, the threat of cyber-attacks is more prevalent. Barclays must invest heavily in cybersecurity measures to protect its assets and customer data.
• Blockchain and Cryptocurrencies:  The advent of blockchain technology and cryptocurrencies can potentially revolutionize the banking sector. Barclays can explore blockchain applications in cross-border transactions, fraud prevention, and smart contracts.
• Artificial Intelligence (AI) and Machine Learning:  These technologies can be employed in various banking functions, including customer service (chatbots), fraud detection, credit scoring, and personalized banking recommendations.
• Automated Financial Advisors and Robo-Advisors:  With AI’s aid, automated platforms can provide financial advice, investment strategies, and portfolio management at lower costs.
• Cloud Computing:  Leveraging cloud technology can help Barclays streamline operations, enhance data storage capacities, and improve service delivery efficiency.
• Payment Technologies:  The emergence of new payment technologies, like contactless payments, mobile wallets, and peer-to-peer payment systems, requires Barclays to adapt and integrate these methods.
• RegTech:  Regulatory Technology (RegTech) uses technology to help financial institutions comply with regulations efficiently and at a lower cost. Given the heavily regulated nature of the banking sector, adopting RegTech can benefit Barclays.
• Biometric Verification:  Using biometrics, like fingerprint and facial recognition, adds a layer of security to banking operations and can enhance the user experience in mobile and online banking.
• Infrastructure Modernization:  Continuous updating and modernizing IT infrastructure is crucial to ensure smooth operations, integrate new technologies, and prevent system downtimes.
• Open Banking:  With regulations like PSD2 in Europe, open banking, which allows third-party developers to create applications and services around a financial institution, is on the rise. This can lead to increased competition and innovation in banking services.

Environmental

• Sustainable Banking:  As global attention focuses on sustainability, there’s a growing demand for green banking solutions. Barclays can offer financial products and services that support eco-friendly initiatives, such as green bonds and sustainable investment portfolios.
• Investment in Renewable Energy:  There’s increasing scrutiny on banks’ investment portfolios. Barclays may need to increase its investments in renewable energy projects and decrease financing for fossil fuel ventures to align with global sustainability goals.
• Corporate Social Responsibility (CSR):  Barclays’ CSR initiatives, which address environmental concerns, can significantly enhance its corporate image. Activities could include tree planting, waste reduction campaigns, or community clean-up projects.
• Regulatory Compliance:  With stricter environmental regulations, Barclays must ensure that its operations, investments, and partnerships comply with local and global environmental standards and regulations.
• Green Technology:  The bank can invest in and adopt green technologies. This might include energy-efficient systems, green building certifications for its properties, or supporting green tech startups.
• Eco-friendly Products and Services:  Introducing services like eco-loans for green home improvements or electric vehicle purchases can attract environmentally conscious customers.
• Transition to a Circular Economy:  This involves minimizing waste and maximizing resources. Barclays can play a role by financing businesses that promote circularity or by implementing circular practices in its operations, like recycling and reusing resources.
• Regulatory Compliance:  Banks like Barclays operate under stringent regulatory frameworks set by central banks and other regulatory bodies. These include capital adequacy requirements, liquidity standards, and other operational criteria that banks must meet to ensure financial stability.
• Anti-Money Laundering (AML) & Know Your Customer (KYC) Regulations:  Barclays must adhere to AML and KYC protocols, which mandate comprehensive background checks for customers, monitoring suspicious transactions, and reporting to authorities.
• Consumer Protection Laws:  These laws aim to protect consumers from unfair banking practices, requiring transparency in the provision of financial services, clarity in terms and conditions, and fairness in charging fees and interest rates.
• Data Protection and Privacy:  Barclays must comply with data protection laws such as the General Data Protection Regulation (GDPR) in the EU, which mandates strict protocols for collecting, storing, and sharing personal data.
• Taxation:  Barclays, like all multinational banks, must navigate complex global tax environments, ensuring compliance with tax laws in every jurisdiction they operate.
• Financial Product Regulations:  Various products and services offered by Barclays, from mortgages to insurance, are subject to their regulations. This ensures that customers are treated fairly and fully informed about their purchasing products.
• Post-Brexit Regulations:  With the UK’s exit from the European Union, Barclays, like other UK-based banks, has to navigate the new regulatory landscape, which might necessitate structural changes to serve European clients.
• Digital Banking and Fintech Regulations:  As Barclays continues its digital transformation and engages with more FinTech solutions, it must adhere to regulations specific to digital banking, online transactions, and electronic data handling.

Check out the PESTEL Analysis of Global Businesses

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PESTLE Business Analysis - Template, Free Research Examples, & More

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PESTLE analysis is a powerful tool for a small business to understand the product-launch environment better. Initially, it was called PEST and included political, economic, sociocultural, and technological factors . Later, legal and environmental factors were added, thus creating the PESTEL framework. From this article, you will learn how these external factors can impact an organization.

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PESTLE analysis is a part of strategic management that allows a business to establish goals and identify possible risks.

What Is the PESTLE?

PESTLE analysis (also known as a PESTEL) is an analytical tool used by companies planning to launch a new product or service. It stands for political, economic, social, technological, legal, and environmental factors. The key difference between PESTLE analysis and other tools like SWOT is that the former focuses on the external factors affecting an organization.

In other words, PESTLE analysis provides a bird-eye overview of an environment where a business operates to improve brand positioning and raise productivity.

Why Is PESTLE Analysis Important?

PESTLE business analysis is especially beneficial when launching a new product. It considers customers’ needs, existing competitors, and possible promotion methods. Moreover, PESTLE analysis is the only marketing tool focusing on external factors, making it an essential part of strategic management.

When to Use PESTLE Analysis?

There are numerous situations in which PESTLE analysis can be helpful. For example, companies use it:

• To create a strategic plan for a new business.
• To develop a marketing campaign to promote a new product or service.
• To collect essential information on a business.
• To predict possible changes in the labor market, such as skill gaps and job reductions.
• To establish the company’s vision and mission and identify the core values.

To conduct this type of analysis, use our PESTLE analysis template or follow this step-by-step guide we prepared to help you:

• Know the main categories. PESTLE analysis focuses on political, economic, social, technological, legal, and environmental factors affecting a business. Understanding how they differ is essential before proceeding with the analysis.
• Do your research. If you analyze an existing organization, check out its website, customers’ reviews of the products, and main competitors. To make a PESTLE analysis for a new business, you should look for information and statistics on the target market and industry.
• Visualize your findings. Having collected your data, you should present it in a readable way. You can either use our ready-made template or create a table yourself. Remember to keep it concise and focus on the main points.

For your inspiration, we’ve developed a PESTLE analysis model for 3 big companies: Apple , Amazon , and Starbucks . Check them out!

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• Industry Competitive Analysis
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• Risk Management Analysis
• Competitive Analysis
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Home — Essay Samples — Business — Walmart — Walmart Pestle Analysis

Walmart Pestle Analysis

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Published: Mar 19, 2024

Words: 791 | Pages: 2 | 4 min read

Table of contents

Introduction, political factors, economic factors, social factors, technological factors, legal factors, environmental factors.

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Home Essay Examples Business Tesco

Tesco: Pestle Analysis

• Category Business
• Subcategory Corporation
• Topic Tesco

Introduction

Tesco is one of the leading UK retailers with operations in over 12 countries around the globe (Fatricia, 2017). Tesco started its operations in 1924 as a London based vegetable stall. Today, it has expanded to be the biggest supermarket in the UK, with the most massive superstores dealing with a variety of retail products and services, from food, hardware products, to insurance and finance services(Tesco, 2020). Globally Tesco is ranked the second-largest retailer after Walmart in terms of market share and profitability. This essay examines how Tesco supermarkets are governed and how the external environment impacts their business operations.

How Tesco Plc Is Governed and Management Structure

Like many supermarkets chains in the UK and across the globe, Tesco follows a hierarchical organizational structure (Meng, 2020). In this organization structure, all the company’s critical positions are divided into different segments, which ensure a smooth flow of operations across all their business premises. At the top of this structure are vital managers and leaders who have supreme authority and responsibilities.

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At the top of Tesco’s leadership is the Tesco board. The board is composed of 10 members who include the chairman of the board, the CEO, Chief financial officers, and four non-executive directors. Below the Tesco PLC Board are five committees. These committees include the audit committee, the corporate responsibility committee, the nominations committee, the remuneration committee, and the disclosure committee. The committee plus the board have the most significant responsibility and authority overall operations of the company around the globe. This top-level management performs supervisory roles and takes all critical decisions as to the functioning of the business. These managers also represent the company in major national and international market activities.

Beside this holistic approach to the management of the organization, Tesco organization has another structure at regional and store level. This is also referred to as the mediate level. It is the link between the top-level managers and the ground staff. The vice presidents and other managers are found on this level. They coordinate activities between these two levels and perform essential operations functions such as human resource management, marketing, and personal relations.

The last level at Tesco management is the base level. At the top of this structure is the regional manager. The regional managers are responsible for making key decisions regarding the stores located in their regions. Below him is the store manager. The store manager receives reports from three key personnel: the food trading manager, the non-food trading manager, and the personnel manager. Each of these managers also controls another set of managers; for instance, there are fresh food section manager and ambient food section managers who report directly to the food trading manager. On the other hand, the electrical section manager and the clothing section managers’ report to the non-food trading managers.

One of the critical reasons why Tesco has adopted this structure is that it is large and has several layers within its operations (Meng, 2020). Thus the organization opted to use a functional structure that focuses on different departments in their business operations. Besides, this structure is based on function as opposed to individual store locations. Secondly, since the company has operations across various countries around the globe, it would have been different for one person to monitor and control all activities. Thus, the hierarchical structure helps the company manage various departments and stores, but it also helps them handle different people differently across different countries and cultures.

Furthermore, Tesco has an elaborate purpose and vision it seeks to achieve-‘to serve shoppers a little better every day.’ hence it is crucial to have the best care for customers in all stores it operates. The hierarchal structure helps the company to achieve this goal.

Importance of Carrying Out Pestle Analysis

Pestle analysis is a tool used by business managers and experts to monitor and analyze the external environment factors that impact a given organization (Morrison, 2020). PESTLE is an acronym for the political, economic, social, technological, environmental, and legal factors that influence business operations. According to Morrison (2020) conducting a PESTLE analysis is an essential process that helps marketers to identify threats and opportunities. Besides, scholars agree that it is crucial to perform this analysis before venturing into any market. Similarly, if you have an existing business, the review is significant in conducting the SWOT analysis. As a result, the PESTLE framework is strategic planning, a tool that helps managers to reduce business threats in their market. The importance of conducting a PESTLE analysis range from the idea phase, product launch, product development, marketing strategies to increasing success.

One of the key importance of conducting a PESTLE analysis is the cost-effectiveness associated with the analysis (Boddy, 2016). The only significant costs associated with this analysis are the time. This analysis can be completed through a simple organization of data and collection of responses from stakeholders. Simply put, the PESTLE analysis is a straightforward analysis where the amount of research and resources needed to conduct this analysis is optional. Besides, anyone in the organization can do the PESTLE analysis.

Another significant importance of the PESTLE analysis is that it helps the organization to have a deeper understanding of the external environment in which they are doing business (Boddy, 2016). Without this analysis, the environmental factors that directly or indirectly affect organization success might go unnoticed. For instance, a pharmaceutical company trying to develop a vaccine or drug for COVID 19 may overlook other safety and consumer laws while pushing to develop its drug. Such a company may also neglect the technological changes and barriers that consumers face in less developed countries compared to consumers in developed countries. Similarly, some organizations have developed products that thrive in one market but fail miserably when exported to other markets. Thus, the PESTLE analyses help managers understand different influential factors that can affect the success of any product launched in the market. Consequently, it encourages the development of strategic thinking for a deeper and holistic understanding of the business environment.

The PESTLE analysis has proved to be an essential tool for analyzing specific products in a given market segment. Even though many firms used this analysis to analyze the entire organization, it can also be used to analyze particular products. This analysis can be used to analyze customer relationships as well as marketing plans. This narrowing of the analysis can raise alertness and awareness of the potential opportunities and threats within and outside the external organizational environment. For instance, the PESTLE analysis can be sued to tell whether there is an existing competitor, potential /upcoming competitors, or whether there are other products within the organization that may provide threats or opportunities for the organization or specific products. For instance, an organization may look into projections for population increase that can be used to develop products that meet certain age segments effectively. With the PESTLE analysis, a business can thoroughly examine changes and create new strategies to maximize profits. Without this analysis, the organization may be gearing to existing threats within their market segment.

Most of the business opportunities are found in the external environment. Thus an organization may use the external analysis to exploit and strengthen the firm’s operations. For instance, today, most business organizations are concerned with the changes in technology and social trends. As such, most of the organization has integrated social media channels in marketing and communication strategies. Today social media platforms such as Twitter, Facebook, and Instagram have become an essential tool for business communication and marketing campaigns. Thus social and technological changes have emerged as opportunities to expand and increase their sales revenues. Many organizations have used this tool to build marketing campaigns and reach out to new customers. A robust external analysis allows the business to convert the external environment to the customer before competitors do. However, as Morrison (2020) points out, it is crucial to understand your reason before conducting any PESTLE analysis activity. You should be able to understand the target audience or the product which you would like to increase.

TESCO PESTLE Analysis

Political factors.

Tesco headquarters are in the UK. Besides the company, major operations and supermarkets are found in the UK. Needle (2015) posits that businesses must comply with various legislation that ensures the smooth functioning and safety of their operations. As Tesco operates across multiple jurisdictions across the UK and Europe, it needs to keep up with the changing political landscape. Tesco also has to analyze the political stability of any country it is operating since the more stable the political landscape; the more opportunities are available for Tesco to exploit. One of the critical political activities that have impacted Tesco’s operations is the Brexit. The new regulations that will come after Brexit are formalized will have a significant impact on the business operation and the sales of the revenues. As such, Tesco should be ready to analyze the Brexit regulations and identify potential threats and opportunities. Similarly, the tensions between China and the United States have a significant impact on the organization’s operations. The trade tensions between these two superpowers have affected the regulations regarding the products and services emanating from these markets. Besides the changes in tax policies among the two countries and elsewhere where Tesco operates significantly affects the profitability of its stores.

Economic Factors

There are numerous factors that play a significant role in the consumption of the products and services that Tesco deals with. As a result, Tesco has to analyze the trends in the economic changes in every country that it operates. These factors have a considerable impact on the sales revenues, product distribution, and the overall profitability of the stores(Needle,2015). For instance, the company keeps a keen eye on the various changes in tax policies to leverage the same for its future success. However, despite its global presence, Tesco largely depends on the UK market segment for a significant share of its profits. Thus any changes in the UK economy will have a massive impact on the profitability of the company. For instance, the economic changes will affect how the company prices its commodities and how it delivers its products and services to the consumers. The additional costs associated with the changes in the economy will be transferred to the consumers. Thus Tesco largely depends on the inflation index to price its commodities. On the other hand, the sales volumes largely depend on the disposable income in the countries it operates.

Social Factors

According to Fatricia( 2017) social factors have played an instrumental role in the business strategies at Tesco supermarkets. Due to the current social changes and, people prefer buying products in one go and based on social trends. Through the analysis of the social factors, the company has switched from a retailer of food items to cum non-food model where it stocks a variety of both food and non-food items. The company has also realized that various consumers’ products and services are demands based on societal influence. Hence the choice of products and services depends on different cultural and social factors with which the store is located.

Tesco has been monitoring the changes and trends in society and the culture of its consumers for ages. Through this analysis, the company has managed to design stores, products, and services that meet these changing needs. Since most of the stores are located in urban and cosmopolitan areas, Tesco has realized that to beat competitors across the UK; it needs to provide consumers with sufficient products and services to choose from. Similarly, over the recent past, most of the UK consumers have shifted towards organic products, and the company has managed to capture its customer base by changing its attitude towards promoting social activities and healthy living through eating organic products. Corporate social responsibility, which has been linked to many organizations’ success, has become an integral part of Tesco competitive strategy. Today, Tesco hires locals in a move aimed at benefiting society(Tesco, 2020).

Technological factors

Over the last decade, there have been numerous technological changes in the retail and manufacturing sector. According to Rosnizam et al., (2020) these changes have affected how businesses such as Tesco are conducting their activities. Tesco has realized that it is essential to keep up with the changes in technology for it to become relevant and competitive in the retail sectors. Consequently, the company has been experimenting with various retailing aspects and has achieved significant success in many stores. For instance, the company has been operating an online store where customers can order products and get their products delivered at their doorsteps. Today over 40% of its customers shop online (Rosnizam et al., 2020). Tesco has also partnered with another giant in the industry, Amazon, to create the Amazon Go, a cashier-less billing technology that is likely to revolutionize the retail industry. Through this technology, the company aims to reduce the long ques in most of its supermarkets, which will make shopping to be less time-consuming.

Legal factors

Any changes in laws and regulations regarding trade and industry will significantly impact Tesco operations. Thus, the company needs to follow all the laws and government policies to smoothly and conveniently meet the client’s needs.

Government department such as food retailing commission has laid down various rules and regulation that all retailers must follow by all industry players. Besides, Tesco has to adhere to labor laws, including equal pay, gender, race, and ethnicity issues.

Environmental Factors

Tesco is involved in various environmental initiatives. The main aim of these initiatives is to comply with the government regulations on environmental protection and create a more sustainable business venture (Tesco, 2020). For instance, the company is involved in various activities aimed at reducing and removing all non-recyclable materials in the supply chain (Evan and Mason, 2018). The company has also ensured that it is engaged in sustainable sourcing of its products which adheres to a zero-tolerance policy on pollution and illegal sourcing of raw materials (Evan and Mason, 2018).

In conclusion, the PESTLE analyses of Tesco PLC showcase the various external factors that impact its business operations. This analysis helps the company and other interested parties evaluate the brand’s external business factors and some of its major products and services.

Bibliography

• Boddy, D. (2016) Management an Introduction, (7th edition), Pearson Press
• Evans, B. and Mason, R., 2018. The lean supply chain: managing the challenge at Tesco. Kogan Page Publishers.
• Fatricia, R.S., 2017. Strategic Analysis of Tesco Supermarket. Jurnal Manajemen Terapan dan Keuangan, 6(02), pp.69-86..
• Meng, M., 2020. Tesco Company Organisational Structure Chart Example | Org Charting. [online] Orgcharting.com. Available at: [Accessed 9 July 2020].
• Morrison, J. (2020) The Global Business Environment, (5th edition), Palgrave.
• Needle, D. (2015) Business in Context, An Introduction to Business and Its Environment, (6th edition), Cengage Learning.
• Rosnizam, M.R.A.B., Kee, D.M.H., Akhir, M.E.H.B.M., Shahqira, M., Yusoff, M.A.H.B.M., Budiman, R.S. and Alajmi, A.M., 2020. Market Opportunities and Challenges: A Case Study of Tesco. Journal of the community development in Asia, 3(2), pp.18-27.
• Tesco, 2020. Our History. [online] Tesco PLC. Available at: [Accessed 9 July 2020].
• Tesco, 2020. The Little Helps Plan Framework. [online] Tesco PLC. Available at: [Accessed 9 July 2020].

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