External Analysis
The PESTLE framework serves in strategic management for analyzing external influences on an organization. The acronym PESTLE represents Political, Economic, Socio-cultural, Technological, Legal, and Environmental factors. It emerged from strategic management and marketing studies, aiming to comprehend the macro-environment in which businesses function. Each element offers valuable insights into the external environment’s opportunities and challenges.
Political Factors
– Political Stability
– Government structure
– Trade agreements
– Regulations
– Consumer protection
– Competition laws
– Voting laws
Economic Factors
– GDP
– Growth rate
– Industry composition
– Interest rates
– Inflation
– Employment
– Income
– Tax rate
– Currency exchange rate
Socio-cultural Factors
– Population size
– Population distribution
– Population trends
– Cultural trends
– Diversity
– Consumer preferences
– Religion
– Immigration
– Lifestyle
Technological Factors
– Research and Development
– Innovation
– Intellectual property rights
– Technological advancement
Legal Factors
– Employment laws
– Consumer protection laws
– Privacy laws
– Antitrust laws
– Business laws
Environmental Factors
– Environmental laws
– Energy usage
– Climate
– Pollution
Exercise
You are appointed to be the strategic managers of the companies listed below. Your goal is to examine the company’s external environment and look at the company’s current strategy and advise the enterprise if it should expand its operations to different countries.
Every team should analyze their business case and create a brief presentation to advise the board of directors.
Which products/services does the company sell? Which countries is the company active in? Is the company profitable? How much profit does the company make?
Perform a PESTLE analysis.
Should the company expand its operations to the country you analyzed?
