Pestal Analysis
PESTEL ANALYSIS - UNILEVER GLOBAL
PESTEL analysis - UNILEVER
A scan of the external macro environment in which the firm operates can be expressed in terms of following factors:
Political
Economical
Social
Technological
PESTEL analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The headings of PESTEL are a framework for reviewing a situation, and can in addition to SWOT and Porter’s Five Forces models, be applied by companies to review a strategic directions, including marketing proposition. The use of PESTEL analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports. PESTEL also ensures that company’s performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PESTEL is useful when a company decides to enter its business operations into new markets and new countries. The use of PESTEL, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment.
Limitations of PEST analysis
Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Economic factors affect the purchasing power of potential customers and the firm’s cost of capital. Social factors include the demographic and cultural aspects of the external macro environment. These factors affect customer’s needs and size of potential markets. Technological factors can lower barriers to entry reduce minimum efficient production levels and influencing outsourcing decisions.
It may be difficult to forecast future trends with an acceptable level of accuracy. In this regard, the firm may turn to scenario planning techniques to deal with high levels of uncertainty in important macro-environmental variables.
PESTEL analysis - UNILEVER
A scan of the external macro environment in which the firm operates can be expressed in terms of following factors:
Political
Economical
Social
Technological
PESTEL analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The headings of PESTEL are a framework for reviewing a situation, and can in addition to SWOT and Porter’s Five Forces models, be applied by companies to review a strategic directions, including marketing proposition. The use of PESTEL analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports. PESTEL also ensures that company’s performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PESTEL is useful when a company decides to enter its business operations into new markets and new countries. The use of PESTEL, in this case, helps to break free of unconscious assumptions, and help to effectively adapt to the realities of the new environment.
Limitations of PEST analysis
Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Economic factors affect the purchasing power of potential customers and the firm’s cost of capital. Social factors include the demographic and cultural aspects of the external macro environment. These factors affect customer’s needs and size of potential markets. Technological factors can lower barriers to entry reduce minimum efficient production levels and influencing outsourcing decisions.
It may be difficult to forecast future trends with an acceptable level of accuracy. In this regard, the firm may turn to scenario planning techniques to deal with high levels of uncertainty in important macro-environmental variables.