Pest Analysis Of Pestle

3.11 PESTL ANALYSIS

The term PESTL is originally referred to as PEST analysis which looks at political, economic, social, technological aspects that may affect the business. In this study, legal factors were added into PEST analysis to form the PESTL analysis model. The PESTL analysis is relatively simple, easy to use by small and medium enterprises.
Following analysis, small and medium sized enterprises can identify a range of opportunities and threats that may especially affect their activity in the future, a very important aspect for these companies which are vulnerable to environmental changes due to their limited resources.

Political factors include legislation on trade, taxation, employment and any other areas that can have a bearing

They also affect an enterprise. For example, where there is a tendency for middle-class growth, there may be a rising demand of premium products. The dramatic rise of bottled-water sales in Malaysia since early 90’s is a good case in point; when the treated water from government mains would serve the same purpose.

Technological factors covers such things as technological discoveries and breakthrough coming through from research, the government emphasis on R & D, and rates of obsolescence etc. A technological change can shift the business landscape. For example, with desktop publishing made possible by PCs, the printing industry was losing lucrative businesses in printing product brochures, catalogs, instruction literatures etc. Some proactive printing companies, however found a fortune in supplying computer forms, taking advantage of the growing trend in information technology.

Legal factors include the laws that affect the business environment in a certain country while there are certain policies that companies maintain for themselves. Legal analysis takes into account both of these angles and then charts out the strategies in light of these legislations. For example, consumer laws, safety standards, labor laws

Source: Various Statistics and Documents Retrieved from www.developing8.org

According to table 3.5, the pilot study of PESTL factors of Malaysia SME sector when doing business in D-8 member states shows the positive potential. However, it is necessary to comment only the few significance factors that generate positive potential with big impacts.

In terms of Political factor, Malaysia SME will gain advantage when trading with D-8 member states compare in trading with non D-8 members since Malaysia signed Preferential Trade Agreements with all D-8 member states

Economical factor also revealed that Malaysia is the largest exporter of D-8 total exports to world in 2014, which means Malaysia SME have the capacity to fulfill the import demand of D-8 member states.

Socio-cultural factor shows that D-8 member states to put joint efforts in harmonizing ‪Halal Standard‬.‬ Malaysia is one of the first country to encourage the Halal product and services, Malaysia SME Halal product are export ready and good quality waiting to expand into their