Business Environment

Session - 9
Hnd in BM
Batch 6

Content
What is PESTLE analysis?
What does PESTLE analysis include?
Case study on Apple.

Classification Environment
1. Internal Environment
Eg. Organizational Culture & Structure, Management,
Staff

2.External Environment
Eg. PESTLE

PESTLE analysis
PESTLE is an analytical tool which
considers external factors and helps
you to think about their impacts

PESTLE analysis
Is a useful tool for understanding the big
picture of the environment in which you are
operating

By understanding your environment, you can

take advantage of the opportunities and
minimize the threats.
This provides the context within which more
detailed planning can take place to take full
advantage of the opportunities that present
themselves.

The factors in PESTLE analysis

P Political
The current and potential influences from political pressures

E - Economic
The local, national and world economic impact

S - Sociological
The ways in which changes in society affect the project

T - Technological
How new and emerging technology affects our project / organization

L - Legal
How local, national and global legislation affects the project

E - Environmental
Local, national and global environmental issues

PESTLE vs. SWOT

In contrast to a SWOT, PESTLE encourages you
to think about the wider environment and what
might be happening now and in the future which
will either benefit or be of disadvantage to the
organization, individual etc
a kind of radar which picks up trends and
developments in the external environment which
can be used to inform longer term planning and
strategy making

PESTLE
Political:

Government type and stability

Freedom of the press, rule of law and levels of bureaucracy and corruption
Regulation and de-regulation trends
Social and employment legislation
Tax policy, and trade and tariff controls
Environmental and consumer-protection legislation
Likely changes in the political environment

Economic:

Stage of a business cycle

Current and projected economic growth, inflation and interest rates
Unemployment and supply of labor
Labor costs
Levels of disposable income and income distribution
Impact of globalization
Likely impact of technological or other changes on the economy
Likely changes in the economic environment

PESTLE
Sociological:

Cultural aspects, health consciousness, population growth rate, age distribution,

Organizational culture, attitudes to work, management style, staff attitudes
Education, occupations, earning capacity, living standards
Ethical issues, diversity, immigration/emigration, ethnic/religious factors
Media views, law changes affecting social factors, trends, advertisements,
publicity
Demographics: age, gender, race, family size

Technological:
Maturity of technology, competing technological developments, research funding,
technology legislation, new discoveries
Information technology, internet, global and local communications
Technology access, licensing, patents, potential innovation, replacement
technology/solutions, inventions, research, intellectual property issues, advances
in manufacturing
Transportation, energy uses/sources/fuels, associated/dependent technologies,
rates of obsolescence, waste removal/recycling

PESTLE
Legal:

current home market legislation, future legislation

European/international legislation
regulatory bodies and processes
environmental regulations, employment law, consumer protection
industry-specific regulations, competitive regulations

Environmental:

Ecological
environmental issues, environmental regulations
customer values, market values, stakeholder/ investor values
management style, staff attitudes, organizational culture, staff engagement

PESTLE analysis and projects

It is possible to use the PESTLE analysis on projects
as well for organizations
It is not always needed, especially if the projects are
small
If PESTLE analysis is used for a project, then the
focus should be on solving the focal problem and
analyze how the external environment is affecting the
process of solving the focal problem
e.g. the guidelines from the European Commission do not
include PESTLE in their logical framework approach

Issues of concern
The main problem with these external PESTLE factors is
that they are continuously changing

Therefore PESTLE analysis should include a thorough

analysis of what is affecting the organization or a project
Now, and what is likely to affect it in the Future
The result of a PESTLE analysis is usually a list of
positive and negative factors that are likely to affect a
project
However, by themselves, theses factors they mean very little
It is important to bear in mind, that PESTLE analysis requires
careful Application of results

Similar analysis
Other forms of PEST - PESTLE, PESTLIED, STEEPLE and
SLEPT:
Some people prefer to use different flavors of PEST analysis, using
other factors for different situations. The variants are:
PESTLE/PESTEL: Political, Economic, Sociological, Technological,
Legal, Environmental;

PESTLIED: Political, Economic, Social, Technological, Legal,

International, Environmental, Demographic;
STEEPLE: Social/Demographic, Technological, Economic,
Environmental, Political, Legal, Ethical; and
SLEPT: Social, Legal, Economic, Political, Technological

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Presentation Agenda

Introduction
PEST Analysis
PESTLE Analysis
Dimensions of the model
Aim of the analysis
Apple Inc PESTLE Analysis
Conclusion
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Introduction
Apple was founded by Steve Jobs, Steve Wozniak, and Ronald
Wayne on April 1, 1976 to develop and sell personal computers.
It was named Apple Inc. on January 9, 2007 to reflect its shifted
focus towards consumer electronics.

Its best-known hardware products are the Mac line of

computers, the iPod media player, the iPhone smartphone, and
the iPad tablet computer.

Apple has continuously come up with innovative products

making it the most valuable company in the world and leaving
behind all its competitors.

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PEST Analysis
It is a simple and effective tool used in situation analysis to
identify the key external (macro environment level) forces that
might affect an organization.

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PESTLE Analysis
Incorporating the Legal and Environmental dimensions in the
model makes it more comprehensive and gives better results.

PEST

PESTLE
LE
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Dimensions of the model

Government
stability
Tax policy
Trade control
Import
restrictions
Competition
regulation
Tariffs
Regulation/deregulation
Bureaucracy

Growth rates
Inflation rate
Interest rates
Exchange rates
Unemployment
trends
Labor costs
Stage of business
cycle
Credit availability
Stock market
trends
Trade patterns

Health
consciousness
Education level
Population
growth rate
Lifestyles
Buying habits
Religion and
beliefs
Age distribution
Family size
Minorities
Life expectancy
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 Basic
infrastructure
level
Rate of
technological
change
Spending on
research &
development
Legislation
regarding
technology

Anti-trust law
Discrimination
law
Copyright,
patents /
Intellectual
property law
Consumer
protection
Employment
law
Health & safety
law

Weather
Climate change
Laws regulating
environment
pollution
Air and water
pollution
Recycling
Waste
management
Carbon
footprints

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Aim of the Analysis

Find out the current external factors
affecting an organization.
Identify the external factors that may
change in the future.
Exploit the changes (opportunities) or
defend against them (threats) better
than competitors would do.

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Apple Inc PESTLE Analysis

P
E

T
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Political Factors
It is reported that more than a half of sales of their
products come from countries other than America.

Apple Inc manufactures a number of its parts and

products from outside the US, like Czech Republic, Ireland,
China, Korea and Cork.

The bad political relations between US and the other

world have bad outcomes for the company.

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Economic Factors
Inflation, recession and currency are three important
economic factors that Apple noticed.

Since Apple Inc products were viewed as luxury products,

therefore customers started pending less on them.

US dollar value keeps fluctuating, however the company

has purchased itself foreign currencies and thus, the
economic effects on the company are minimized.
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Social Factors
As the world cannot be imagined without the gadgets, thus Apple
products have marked their presence on the international market.

As the purchasing power of the common has risen in various markets

across the world the purchasing of luxury products have gone up.

Possessing these items are considered as status symbols in many

societies which have also increased the sales of Apple Inc products.
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Technological Factors
Technology has a short lifetime. That is why Apple needs
to upgrade their product more often so they will outdo
their competitors easily.
Apple Inc has invested largely in its product research and
development field and thus its products are at the top of
the new innovative products ranking.
One of the most innovative and technologically advanced
products is the iPod which marked the demise of
walkman.

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Legal Factors
Apple Inc has been a participant in various
legal proceedings and claims since it began
operation.
In October 2009, Nokia Corporation sued
Apple for Apple's infringement of Nokia's
patents relating to wireless technology

Apple has been in a number of patent

cases with players like HTC and Samsung.
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Environmental Factors
From reporting the entire carbon footprint to finding
ways to reduce that footprint, Apple takes a
comprehensive approach to environmental responsibility.
Apples commitment to the environment includes
properly disposing of electronic equipment at the end of
its useful life. It responsibly recycle your computers and
displays.
On track towards achieving an ambitious goal: to power
every Apple facility entirely with energy from renewable
sources solar, wind, hydro and geothermal.
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Conclusion

PESTLE Analysis is one of the most comprehensive

models to study the effect of various forces present in
the environment and subsequently prepare oneself to
exploit the opportunities and defend against the threats.

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