Pestle Factors That Impact on Business

Categories: Business Economics

Essay, Pages 3 (532 words)

Views

947

PESTEL analysis stands for "Political, Economic, Social, and Technological, Environmental and Legal analysis". It is a part of the external analysis when conducting a strategic analysis or doing market research and gives a certain overview of the different macro-environmental factors that the company has to take into consideration.

Political factors or how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability.

Don't use plagiarized sources. Get your custom essay on

“ Pestle Factors That Impact on Business ”
Get custom paper
NEW! smart matching with writer

Political factors may also include goods and services which the government wants to provide or be provided and those that the government does not want to be provided. Furthermore, governments have great influence on the health, education, and infrastructure of a nation.
Economic factors - Businesses need to make money to continue to exist. They do this by listening to customers to ensure they keep their customers and attract new ones with good services that customers want and need. It is extremely important for businesses to respond to changes in demand from customers.

Get quality help now

Prof. Finch

Verified writer

Proficient in: Business

4.7 (346)

“ This writer never make an mistake for me always deliver long before due date. Am telling you man this writer is absolutely the best. ”

+84 relevant experts are online

Hire writer

They include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy.
Social factors - Society’s habits and tastes are changing. People are more aware of the importance of the environment and becoming ‘green consumers’.

Get to Know The Price Estimate For Your Paper

Topic

Deadline: 10 days left

Number of pages

Email Invalid email

By clicking “Check Writers’ Offers”, you agree to our terms of service and privacy policy. We’ll occasionally send you promo and account related email

"You must agree to out terms of services and privacy policy"

Write my paper
You won’t be charged yet!

Green consumers prefer goods and services that are ‘environmentally-friendly’ and which have less impact on the environment. They include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an ageing population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers).
Technological factors - Businesses are continually developing new technologies to provide the best solutions for the market place. Intelligent companies find out what the most appropriate technologies are for their businesses and use them. They include ecological and environmental aspects, such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.
Environmental factors - include weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness to climate change is affecting how companies operate and the products they offer-it is both creating new markets and diminishing or destroying existing ones.
Legal factors - Legal changes that affect business are closely tied up with political ones. Many changes in the law stem from government policy. They include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.