PESTLE Analysis: Alfa Financials

In order for Alfa Financials to outpace and maintain its market niche, there are certainly various prevailing threats and opportunities within its remote business environment that must be considered. In this way, they can prepare strategic changes in the organization and be aware of the external market that will give them a competitive edge over other competitors. The process is called PESTLE analysis, a tool which plays a vital role in the framework of the organization identifies various macro environmental factors to assess what their potential impact on the organization can be, enabling the organization to apply strategic changes for effective future operations and industry analysis. The PESTLE analysis factors are Political, Economic, Sociological,
Since its formation in 1971, the UAE has enjoyed a political stability. The policies are imposed accordingly which factors the stability in the country (Government.ae). The change of fiscal policies in the UAE has both positive and negative impact to the organization. In case the Government limits the withdrawal and investment amount as required by banks and impose a strict compliance on companies, for example, benefits Alfa as investors won’t be able to withdraw their capital and profits all of a sudden, fewer paper works and stronger reputation not to mention on the negative side however, the long official public holidays declared by the government (Centralbank.ae). Since UAE is all about the law, being licensed by governmental bodies gives an edge to the company over competitors as obtaining the license itself is complicated. Investors run a thorough background check on the company first using the government’s website before investing their money in any
Understanding of social change gives Alfa a better feel for the future market situation. UAE is a country governed by Islamic laws. Most of Muslim Investors follow the traditional way of making business. Alfa has to make sure they create and introduce innovative business proposals that suit their beliefs and traditions. The company benefits from a Shariah compliant business by not paying interest and not taking interest which is a positive and healthy sign for an organization. However, the company faces the negative impact on its low margin because it limits the trading amount and therefore generates only small profits and commissions that affect the company’s revenue. Doing business also in UAE means having compulsory local partners that are sometimes difficult to deal with (Al Saloom,