The PESTLE analysis is one of the most popular and widely used strategic tools in marketing management, which is focused on assessing the external factors present in a market region. The external factors present in a region can have a significant impact on the business operations of a company. Therefore, it is imperative for the organizations to have a clear understanding of these factors and how they can be a threat or an opportunity for the company. As a marketing management student, you will often find yourself conducting market analysis, where you are required to use the PESTLE framework to identify how the external factors of the chosen market can influence your proposed business venture or any existing organization. Thus, the PESTLE framework has a major contribution to make when you are developing a robust business plan in your paper.
The PESTLE framework analyses a market location based on five different parameters, which are political, economic, social, technological, legal and environmental. Each of these factors can have varying impacts on an organization depending on the nature of its business and its operational activities. Let us dig deeper into each one them so that you get the best possible essay help.
Political: The political environment of a nation can have a prominent impact on the business venture of an organization. It determines the bilateral trade relationships between the home and the host countries. This plays a determiningfactorbehind the success of organizations with international business operations. Good bilateral relationship allows firms to expand their business ventures to other host nations, thereby facilitating business growth and revenue generation. It also determines the political stability of a region, which can affect the local businesses to a great extent. The political stability refers to the disputes arising from political situations which has the potential to disrupt the operations. Thus, when discussing the political environment, you can cover the bilateral trade relations and political stability of the region. Let us look at an example, the US has good bilateral trade relationships with several nations, which allows US companies to seamlessly expand to various other host markets. It also allows other foreign countries to enter into the US market. The political factor may also include the governmental policies and regulations concerning business operations. You may find policies that supports certain business operations while restricting a few.
Economic: The economic conditions determine the affordability of the customers in the market, along with the availability skilled labor and the ability of the nation to offer financial support to business ventures. While conducting a market audit for your marketing essay, it is important to ensure that the customers have the required affordability to purchase the offered products and services. While discussing the economic conditions, you may highlight the GDP growth of the nation and the per capita income of the people. Moreover, can also discuss about any particular sectors on which the economy has highest dependence. The data regarding national economies can be found on CIA Factbook in great details. Furthermore, you can discuss about the labor market of the chosen nation. Since, the availability of skilled labor is a determining factor behind organizational success therefore it is essential to cover it in this section. In case of the US, the country has a GDP of USD 19.49 trillion and the per capita income is recorded at USD 59,800. This indicates high affordability of the customers and the ability of the nation of support any business venture.
Social: The social aspects of a market determine the consumer behavior and their purchase decisions. It is important to understand that different nations have different cultural backgrounds which determine their lifestyle and consumption behavior. While talking about the social aspects you can highlight the market trends in the country involving the concerned organization or industry. For example, if your paper involves a beverage company in the US, then you mention the per capita beverage consumption statistics in the country, which showcases a steady decline in consumption of soft drink beverages. Moreover, you can also discuss about any recent trends in consumer's sentiments that may govern their buying behavior. For example, the growing concerns for environment may drive some consumers to prefer certain product categories over the other.
While covering the social aspects of a nation you can also discuss the national culture. Cultural dimensions like individualism and indulgence can have a significant impact on the purchasing behavior of the consumers. Society with low degree of individualism may prefer to purchase products that are suitable for large families, compared to the ones with high individualism. Likewise, a society with high degree of indulgence may choose to purchase expensive products, compared to the ones with low indulgence.
Technological: The technological factor determines the technological availability in the market region which governs the business operations. The availability of advanced technologies can help a company to adopt processes which can help in generating higher value and in lowering the operating cost. Moreover, it can also help a firm to develop new products and augment its existing operational activities, which can further enable the firm to achieve higher customer satisfaction. In this section, you can highlight the rank of the country in terms of technological innovation, which should give you a clear idea about its current technological advancements. It is also advised that you should also look for any recent technological developments which can improve business operations such as implementation of IoT, blockchain, advanced automation, robotics, AI, etc. It should be noted that the development of the new technology does not necessarily mean that it will be beneficial for your chosen business venture. Therefore, it is important that you highlight the technologies which are specifically useful for your company.
Legal: The legal factors refer to the business laws, which every organization must comply with in order to avoid penalization. These business laws are often designed to protect the interest of the stakeholders and to provide a level playing field for all the market players. In this section you can highlight the areas business laws concerning your chosen organization, and the industry in which it operates. It should be noted that the sudden changes in business laws can have a strong impact on the business ventures, especially in the area of taxes and import and export duties. Different nations can have different business laws, therefore for an internationally operating business venture it is essential to have a clear idea of the business laws in the host nations. While discussion the legal aspects you can talk about how the chosen business venture needs to reshape its business operations in order to abide by the local laws. If you also find some restrictions present in the local or host market, you may also highlight that, since it can restrict the business of the company.
Environmental: The environmental factor refers to the environment and the eco-system and how it can influence the business venture. In this case, you may talk about the existing environmental laws which govern the operational activities of the firms. Moreover, if you find that some environmental factors such as storm, earthquake, rain, etc. may impact the business operations, then you should definitely mention them. Depending on the chosen market location, certain environmental elements can be more profound, which can have varying impact on business ventures. Therefore, it is important for you to highlight the specific environmental factors which are important for your chosen business venture to consider. Furthermore, you can also mention if the chosen company follows certain operational processes which holds importance from the environmental standpoint such as the use of renewable energy.
Learning about the PESTLE analysis can help you greatly on your marketing management formal essay. It can help to conduct a full scale external environmental audit before you can present your own proposed business strategies. PESTLE analysis can be conducted on any country or geographic region. Just follow our guidelines and you will be able to prepare a professional essay on PESTLE in no time.
Even though the PESTLE framework is one of the most common strategic tools in marketing management, but it can often become quite challenging to implement in a given scenario. If you are someone who is having a hard time figuring how to use it on your assignment, then simple avail our assignment help. Our professional experts are always ready to help you out with your papers.
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