PESTEL: PESTEL is another technical tool used to analyze the factors which the factor.it mainly focuses on the potential threats which affect the market for the company management. PESETEL is an external strategic analyzing tool which aims to research new markets. It help to find out the opportunities of the organization in the market. The PESTEL factors are as follows:
Political: Political factors include the involvement of the government in the industry. It defines the factors like tariffs, subsidies, taxes, and change in government rules. For example, Mc download faces a lot of restrictions like in the UAE and in India, due to different government rules.
Economic: Economic factors it includes the elements like inflation rate, foreign exchange rates, industrial growth and interest rate, which play a vital role in the health of an economy. During recessions, corporations may be pulled back from an extensive investment because they may benefit from the rise in interest rates.
Social: The demand of the market mainly depends on cultural values. The selection of the market depends on factors like gender, age and community. Also, the analysis of the growth of population demography is a crucial factor of social factors.
Technological: Nowadays Technological development is increasing day by day. Technology has created a lot of changes in the corporate landscape such as eliminating some of the human performed jobs. The innovation of virtual leadership has brought many new business options to the market.
Environmental: Environmental factors include elements like natural disasters, climatic changes and seasonal changes. The tourism industry is completely dependent on environmental factors. All over, there are certain environmental laws to reduce the impact on the environment the organizations.
Legal: Legal factors consider legal sections like employment laws, environmental laws, consumer protection laws, safety policies, copyrights and piracy. All the organizations should obey the rules and regular that are provided by the government of the concerned country. Each country has their own laws on safety and employment etc….A newly opened organization should be well bothered about the laws for smooth running.
ADVANTAGES: *Analyze in a basic and straightforward manner. *It’s a mix of abilities and knowledge that may be applied to a variety of situations. *It aids in the pursuit of fresh chances. *It has a lower impact on the organization’s threats. *Aids in the entry into a new market.
DISADVANTAGES: *It oversimplifies the information provided to users in order to assist them in making decisions. *To be a successful analysis, the organization should undertake it on a regular basis, since this will result in a significant increase in investment. *Assumptions and choices are primarily based on the data utilized; there will be no examination into whether the data used is correct or incorrect.
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