pestel ppt
TRANSCRIPT
PESTEL ANALYSIS
DEMONSTRATION BY:-ABHISHEK KANSALISHAN JINDALSONAAL GUPTAROHIN GUPTA
DefinitionDescribes a framework of macro-environmental factor used in the environmental scanning component of strategic managementBy understanding external environment one can take advantage of opportunities and minimize threat
IntroductionEarlier tools and techniques for ‘Scanning the Business Environment’ appears to be by Francis J. Aguilar (1967) who discusses ‘ETPS’.Thereafter, this(ETPS) or ‘environmental scanning analysis’ was modified yet again to become a so-called STEPE analysis.The model has recently been further extended to STEEPLE and STEEPLED, adding Ethics and Demographic factors.
What is Macro Environment?
The conditions that exist in the economy as a whole, rather than in a particular sector or region. It represents forces that affect all firms across all industries.Van Der Heijden a scenario planner identifies three types of uncertainty :
RiskStructural uncertaintyUnknowables
PESTEL Analysis
PESTEL
POLITICS
ECONOMY
SOCIAL
TECHNOLOGY
ENVIRONMENT
LEGAL
Factor affecting PESTEL Analysis :-
Political FactorsGovernment type Corruption Freedom of pressRegulation and de-regulationTax policyChange in political environmentTrade and tariff controlEmployment legislation
Political Heat Map
INDIA
Economic FactorsStage of business cycleCurrent & projected economic growthInflation rateInterest rateLabor costExchange rateImpact of globalizationTaxes
Social FactorsHealthCultural aspectsPopulation growth rateDemographics : age, gender, raceSocial mobilityEthicsEducational infrastructureDivision of wealth in society
Technological FactorsDegree of automationEmerging TechnologiesRate of Technological ChangeR&D activityTechnology legislationGlobal & local communicationTechnology access
Environmental Factors
WeatherGeographyInfrastructureCustomer valuesMarket valuesEnvironmental regulationsDisaster quotientclimate
Legal FactorsAntitrust lawConsumer lawEmployment lawHealth & safety lawIndustry specific regulationEnvironmental lawDiscrimination law
Applicability The model's factors will vary in importance to a given company based on its industry and the goods it produces. For example, consumer and companies tend to be more affected by the social factors, while a global defense contractor would tend to be more affected by political factors
Issues of concernThe main problem with these external PESTLE factors is that they are continuously changing. Analysis of what is affecting the organization or a project Now, and what is likely to affect it in the Future is important.
The analysis may be based on assumptions that prove to be unfounded.Collecting large amount of information may make it difficult.
Case study of STARBUCKS
StarbucksEstablished in 1971It offers world’s finest fresh roasted whole bean coffee.Total stores – 22519 in 67 countriesMission – To inspire and nurture the human spirit- One person, One cup and one neighborhood at a time.
Political Factor The main political factor is about sourcing the raw materials.Tax PolicyEmployment laws
Economic FactorsThe ongoing global economic recession.The company has to deal with rising labor and operational costs.Local currency exchange ratesLocal economic environment in different marketsInflation rate
Socio Cultural FactorChanging family patterns Consumer preferencesChanging work patternsChanges in lifestyles of populationThe level of education of the population in local marketsChanging values among population
Technological FactorEmergence of innovative technologyBiotechnological developmentsDevelopments in agriculture
Environmental FactorEnvironmental rules and regulationsEnvironmental disasters in countries which produce coffee beansGlobal warming and other environmental issues in a global level
Legal FactorsIntroduction of stricter customs and trade regulationsLicensing regulations related to the industry.Policies and regulations by health authorities.
Conclusion of Case Study
The PESTLE analysis above proves that Starbucks has a quite stable external environment. The key reason behind this might be because it operates in the Food and Beverages industry. This means consumers might reduce consumption partially but will not stop buying completely.So, as recession is the most important factor, Starbucks has to lower costs and increase the value. This way it can retain its consumer base and also gain consumer loyalty.
Thank you
Questions are welcomed