Pestle Analysis Of Business

Introduction

Business environment, within which a business operates, is the aggregate of external and internal factors which may or may not be under the control of the business; but the profitability, growth and existence of the business are affected by those factors. Being dynamic in nature, business environment keeps changing which makes it tough to predict the exact nature of future incidents in the business environment. Two types of business environment are internal and external environment and external environment is again divided into two-micro environment (impacts the working of a specific business only) and macro environment (impacts the operations of all the business entities, operating in the economy).

Wileyfox, a smartphone manufacturer,

PESTLE analysis, mainly known as PEST analysis, is a marketing concept or tool which is applied to examine and monitor the macro environmental factors so that the impact of those factors on the business can be understood. The information derived from the pestle analysis is used to make strategic decisions. PESTLE analysis’s advantage is that it helps to analyse the challenges, know the opportunities and understand the forces around which a business has to perform its activities. Failing to understand these factors might lead to wrong decisions which will cause the business to operate less effectively.

The word ‘PESTLE’ stands for-

P – Political, E – Economic, S – Social, T – Technological, L – Legal, E – Environmental.

Figure 1.1 shows six elements of PASTLE analysis- (Atighechian et al.,

are the elements of political factors which is the first element of PESTLE analysis. Investors should know about the nation’s policies, control of trade tax system of a country, bureaucracy, the level of corruption which affect the business operating in that country in which the business will be operated.

The taxation policy in the UK imposes some business restrains on foreign products which might slow down foreign smartphone manufacturers like Samsung, a South Korean smartphone manufacturer. In this case, Wileyfox, which is a UK based manufacturer, will not face those taxation restrains which will make it easy for Wileyfox to expand their business. (Stibbard, 2005)

Political factors like EU enlargement, taxation policy and international trade have an impact on the smartphone manufacturer, Wileyfox. EU enlargement can be used as business opportunity by the manufacturer so that it can exploit the UK to expand its market base. As a democratic country, UK has a stable government and the citizens maintain their laws and customs of the country which makes a good impression on the Wileyfox smartphone manufacturer