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(solution) PESTEL analysis The Organization Political factors Economic

The assignment should be in APA format, double spaced and include a references/works cited section. Assignment should be completed using Microsoft Word. There is no specific page length for the assignment but it should be thorough and cover all aspects of the PESTEL analysis.

PESTEL analysis The Organization Political factors Economic factors Social factors Technological factors Legal


factors Environmental factors Managers use the PESTEL framework to facilitate a comprehensive scan of the external environment


confronting the organization. Why do you think it is necessary to consider these factors? Political Factors


Political factors are external macroenvironmental variables that reflect how


government forces impact the competitive


market as a whole and the company


specifically. This category includes trade


















legislation. General political stability and the role of government in providing for fair and safe markets can


vary widely from one country to the next. Similarly,


significance of political influences on business infrastructure


can be substantially different when moving from one product


category to the next. Economic Factors


Economic factors make up a category of variables that relate to the prevailing


overall condition and health of the economy in which target markets exist. Specific


variables of concern include gross domestic product (GDP), discretionary income,


consumer confidence, unemployment, inflation, interest rates, and currency


exchange rates. Each of these factors can have a significant impact on product- and


market-level decision making. Interest rates are of particular concern to companies


in pursuit of growth opportunities, because as the cost of borrowing money directly


affects a business?s ability to expand. Other economic factors directly impact


consumers? ability to afford the products being sold. Social Factors


Social factors often represent the most important concerns for marketing managers


because they reflect two critical classes of customer characteristics: culture and


demographics. Culture embodies the shared beliefs, attitudes, and values of a


society. Demographics describe the statistical characteristics of a population


expressed by variables such as location, age, and employment.


The interaction of marketing and culture is a two-way street. Cultural meanings are


transferred to products via marketing communications, making products more


attractive to consumers who hold these values. In turn, the symbols and icons of


cultures and subcultures establish foundational values for many types of product


markets. For example, health consciousness is both a value promoted by marketers


and a core cultural value shared across many consumer markets. The importance of


children?s vitamins to good health and how this is expressed in marketing


communications connects the advertiser?s brand-specific message to prevailing


cultural norms about caring for one?s family. Similarly, marketers find opportunities


to sell products at holidays that revolve around cultural rituals that create or affirm


specific cultural meanings.


Demographic market characteristics assist marketers in understanding how


different segments respond to the marketing programs as a function of personal


variables such as age, sex, and income. Attitude research on consumers is often


tied to distinguishing how different demographic segments feel about a product or


service. Marketers rely heavily on demographics because they can be reliable


indicators of how different segments perceive product value. They are also used


extensively in the analysis of B2C markets because changes in most demographic


variables are easily forecast. Free or inexpensive secondary data are readily


available from a large number of government agencies and widely accessible


online. Technological Factors


Although technological factors are variables that impact some markets and


businesses far more than others, all marketing managers need to be aware of the


trends and shifts in this category. The dimensions of technological change that most


often influence marketing processes include innovations in communication and


channels of distribution. Companies at the leading edge of these types of changes


can establish competitive advantages and create effective barriers to market entry.


By pioneering innovative systems of interacting with customers, processing orders,


and distributing products, Amazon. com was able to establish a sustainable


competitive advantage rooted in brand awareness and scale economies that


effectively prohibits many firms from competing with the company directly. Environmental Factors


Environmental factors are primarily long-term ecological concerns that have the


potential to impact all businesses at some level. These can be local/regional in


scope (e.g., water shortages, chronic flooding) or global. Beyond issues associated


with climate change, this category includes factors such as responsible waste


disposal, pollution mitigation, and energy efficiency. A prime example of this trend is


green legislative initiatives aimed at reducing landfill wastes from sources such as


product packaging and the disposal of electronics. In many jurisdictions, ?reverse


value chain? laws prescribe the standards and processes for the safe recycling of


consumer electronics and appliances. Although some industries such as farming and


paper products are more directly impacted than others, environmental factors


represent emerging growth opportunities for many more, as markets are


transformed to reflect increasing awareness of business?s role in environmental


stewardship. Legal Factors


Legal factors in the macro-environment include laws and regulations intended to


control the behavior of business organizations and special interest groups. These


include antitrust laws, Occupational Safety and Health Administration (OSHA)


regulations, consumer protection statutes, and product safety and health laws.


State and local agencies often impose specific regulations to govern the pricing of


consumer necessities and natural monopolies such as utility companies. Although


some business leaders may resent what they regard as the ?over-regulation? of


markets and business practices, the objectives of maintaining fair standards for the


protection of consumers and a level competitive playing field are generally


recognized as valid regulatory goals.


Each of the PESTEL model?s six factors will be of greater or lesser importance to any


given company based on the character of the markets in which it competes. In


general, the process of macro-environmental analysis should incorporate as many


credible and reliable sources as possible to create a complete picture of relevant


trends in the external environment. In many instances, the environmental scan will


highlight the need to undertake custom-designed research studies aimed at


answering specific questions about markets, customers, or the impact of particular


marketing strategies. Implementing the PESTEL Analysis


PESTEL analysis is a diagnostic tool to help managers understand the macro-environmental


forces that can impact the attractiveness of alternative markets. The purpose is to identify


those market-specific elements that may positively or negatively affect the marketing and


sale of individual brands. It is often applied to the process of evaluating international options


for market development. When used in this way, the specific characteristics of nations are


the subject of the analysis.


One approach to implementing a practical PESTEL methodology is to score each option using


standard measures for each of the six environmental factors identified by this framework. A


list of potential indicators for each measure is provided in Table 3.1. PESTEL factors and indicators




Political Economic Social Technological Environmental Legal Useful Resources for your Research INDICATORS


World Bank Governance Indicators,


Central Intelligence Agency World Fact


Book, Heritage Foundation Economic


Freedom Index, Trade and taxation




Gross Domestic Product and GDP per


capita, GDP annual growth rate, Net


exports, Balance of payments, Current


account deficit, Foreign direct


investment, Annual rate of inflation,


Interest rates, Currency exchange


rates, Unemployment rates


Population demographics, Income and


wealth distribution (GINI coefficient)


Literacy rate, Enrollment in


educational programs, Human


Development Index (HDI) Score


(United Nations Development




Global Competitiveness Reports: World


Economic Forum, Technological


infrastructure: Central Intelligence


Agency World Fact Book, Rates of


innovation and technological




Human Development Reports (United


Nations Environmental Program),


Waste and environmental


management policies, Clean air, land,


and water standards


Transparency International, Corruption


Index: http://www.transparency .org,


Legal statutes on competition and


employee safety, Consumer health


and safety laws A practical site that provides users with a set of organized procedures to research a


company or industry. Links to useful resource and data sites are also provided.


This site is designed to provide entrepreneurs with guidance on how to investigate


and analyze both potential customers and competitors. It includes a checklist of


readily available data sources as well as information on market research




This website provides a thorough presentation on many important aspects of SWOT


analysis. It includes useful tools, templates, and worksheets as well as several


examples of the technique. Other links on the site include comparable levels of


information on the application of the PESTEL analysis methodology.


This site provides a concise, yet sophisticated, introduction to the application of the


Ansoff Matrix model as a tool for strategic planning.


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Sep 13, 2020





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