Print Email Download Reference This Send to Kindle Reddit This
submit to reddit

The PESTLE analysis

The PESTLE analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction. A PESTLE analysis is a business measurement tool. PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental factors, which are used to assess the market for a business or organizational unit.

Let us see some of the articles to know how these factors affect the business unit.

"Asian economies prepare to lead world out of recession"

The article was posted in London Evening Standard dated on 8th December 2009 (Page no. 43), regarding the emerging economies in Asia were tipped to rebound from recession faster. The world is increasingly looking to Asia to drive the global recovery as the Asian Development Bank has forecasted that the growth in East Asia's emerging economies, 10 South-East Asian countries benefits China, Hong Kong, South Korea and Taiwan. Thus, this may leads to improve in an economy and boosts the various industries.

"We've got to come up with new schemes to get British firms moving"

Mervyn Davis, chairman of Standard Chartered, wants to talk about the London Export Awards, the government is launching. He said that "The nature of the Government's relationship with business has changed since the crisis". The government is coming with new schemes to get the business moving forward.

The London Export Awards 2010 will be held on 10 February 2010. The awards will celebrate the achievements of London's premier international businesses, underlining the importance of exporting for London's economy.

"Recession Effect: No Buzz in Shopping Malls"

Amallnot only offers agreatshoppingexperiencebut is also a mine of business opportunities. But the pangs of recession are clearly visible on this mine of opportunities also. About ayear back, malls were sprouting up in 2007-08. A quick look in 2009 showcases a different scenario. Blame it on the economic meltdown, the festive spirit has not made shopaholics to flock malls and retailoutlets.

"Asda opens 'green' store"

To heat the store and water, a new Asda opened in Liverpool, uses a biomass boiler and geothermal pumps. The Bootle store has been claimed that it is the greenest supermarket in the UK, and has also features doors on all refrigerated units.

These were just the articles related to some of the factors among the PESTLE, which shows how the business gets downturn and can be able to boost or can survive in the market. Now, let us take a business unit to understand it more clearly.

It is a legal issue, where Dell gone through the busy week in New York and New Orleans. In New York, Dell was fined $4 million for deceptive and misleading advertising around PCs sold to consumers. In New Orleans, two companies claim Dell conspired with city officials to sell a supervision camera system they developed. Dell reportedly said it already had settled many of the cases in New York and has denied the assertion in New Orleans.

So, this was the law, how it affects the business accidentally or might be intention to mislead. Thus, PESTLE examines the business, whether certain steps would be beneficial or not.

Marks & Spencer developed its business abroad was through building up franchises. In 1997, Marks & Spencer had a total of eighty-five franchise (shops) in twenty countries worldwide. The aim of the franchise was to establish important new markets without any capital investment and to work more closely with existing customers to maintain the company's standards. According to Marks & Spencer, franchising is formalization of what the customers are doing, creating an internationally acceptable look and a management structure and style of operation reflecting the best in the UK.

Culture and Management System:

A system of shared meaning held by members that distinguishes the organization from other organization. This is a set of characteristics that the organization value, defined by Robbins. It is a pattern of beliefs and expectations shared by the organization members. M&S has very strong corporate identity; Well-known retail brand name, protective corporate principles and culture. In the past, M&S has invested heavily in a state of the art management system. Here "System" in the sense of not only in the computer field but a comprehensive socio-technical system, including strong management skills and culture.

Technology: M&S has signed a £19 million IT managed services contract that will help support the retailer's strategic business objectives and growth while delivering year on year cost savings. The five-year agreement with Computacenter Services provides MNS with a service featuring end-to-end accountability for more than 4000 head office users across six UK sites. M&S is also expanding its use of a customer and staff feedback system. To submit feedback on any issue, the Fizzback system allows the retailer's customers and staff via text message or the internet. Comments are automatically analysed to identify trends and allow tailored responses to be created and sent.

Thus, the Fizzback system helps M&S to know their customers mindset, it also allows to study from them and build stronger relationships.