(solution) PESTEL analysis The Organization Political factors Economic

(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
restrictions,
tax
policies,
employment
regulations,
and
consumer
protection
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
PESTEL FACTORS
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
policies
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
Program)
Global Competitiveness Reports: World
Economic Forum, Technological
infrastructure: Central Intelligence
Agency World Fact Book, Rates of
innovation and technological
obsolescence
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.
http://www.virtualpet.com/industry/howto/search.htm
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
methodologies.
http://edwardlowe.org
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.
http://rapidbi.com/swotanalysis/
This site provides a concise, yet sophisticated, introduction to the application of the
Ansoff Matrix model as a tool for strategic planning.
http://www.mindtools.com/pages/article/newTMC_90.htm