PESTEL ANALYSIS

Application of PESTEL Analysis

Application of PESTEL Analysis

Introduction

This paper discusses the PESTEL analysis of a conglomerate manufacturing company that is going to set up a business in the country. For starting the business it is important to perform PESTEL analysis in order to analyse the external environmental impacts on the business. The company deals in the production of a wide range of gas struts, hydraulic presses, hydraulic jacks, and garage equipments. Moreover, the company also aims at providing the products at the rights price focusing on the quality for making the products appropriate for both the private and public sectors.

Discussion

PESTEL Analysis (200 words)

PESTEL analysis is used for describing a structure of macro-environmental factors of scanning the environmental components of the business sector. These factors are out of control of the business, but it is necessary to be aware of these factors at the time of business planning or the development of a product. It stands for “Political, Economic, Social, Technological, Environmental, and Legal analysis” (Cadle, et.al. 2010, pp. 3-6).

Political

These factors carries immense significance in the business planning as it impacts all other factors associated with the business. It means the analysis of the local government policies affecting the market, including tax, law, and guidelines (Cadle, et.al. 2010, pp. 3-6).

Economic

For starting a business in the UK market, the analysis of UK economy is crucial towards the business planning. The economic growth of the industry sector, industry policy, and the increase of oil prices and exchange rates are required to be analysed at first, with the growth potential of the consumers (Cadle, et.al. 2010, pp. 3-6).

Social

The social factors affect the company's brand image greatly. It includes the consumers' lifestyles, their income levels, their behaviours, and their cultural uniqueness (Cadle, et.al. 2010, pp. 3-6).

Technological

It includes the technological concerns of the business in terms of analysing the technology involved for the efficient development of products, decision making, and determining the barriers to the business planning (Cadle, et.al. 2010, pp. 3-6).

Environmental

This factor includes the analysis of environmental and ecological aspects, focusing on the minimization of wastage. The impacts of resources recycling and saving, and global warming should be considered for the planning of new business (Cadle, et.al. 2010, pp. 3-6).

Legal

The legal considerations are necessary for the launching of a new business, including the local laws of manufacturing limiting the product's demand, customer service and selling. This will affect the operation and costs of the business (Cadle, et.al. 2010, pp. 3-6).

Forecast Trends up to 2015

Before starting the business in UK as a conglomerate company, the company also prefers to forecast the future trends of the UK market for coming years i.e. up to 2015. This will assist the company in determining and deciding the plans and tactics accordingly.

Trading Policies: Political Element

Trading policies of the UK market region needs to be analysed for ensuring the existence of the company in the market without being troubled in future. These policies of UK are somehow favourable to the manufacturing industries; therefore, the business will be flourishing in ...