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PESTLE ANALYSIS

What is pestle analysis? PESTLE is an acronym for Political, Economic, Social, Technological, Legal and Environmental. PESTLE analysis reveals the impact of these six external factors on the growth of an organization. Generally, PESTLE analysis is often followed by SWOT analysis to get a clear picture of both internal and external factors affecting the business of the organization. This analysis framework is highly effective at the time of Strategic Management Process. What data are required? A scan of the external macro- environment in which the firm operates can be expressed in terms of the following factors;  Political factor: In political include the govt. Regulation and legal issues and define both formal and informal rules under which the firm must operate. o Tax policy o Employment law o Environmental regulation o Trade restriction and tariffs o Political stability Economical factor: Economy factors affect the purchasing power of potential customers and the firm’s cost of capital. o Economy growth o Interest rates o Exchange rates o Inflation rate Social factor: Social factors include the demographic and cultural aspect of the external macro environment. These factors affect customer needs and the size of potential markets. o Health consciousness o Population growth rate o Age distribution o Career attitudes o Emphasis on safety Technological factor: Technological factors com lower barriers to entry reduce minimum efficient production level and influence outsourcing decisions. o R & D activity o Automation o Technology incentives o Rate of technological change Legal factor: Legal factor include the market related laws like Consumer Protection Laws, Anti-trust Laws and regulatory mechanisms like Competition Commission of India, Courts etc. o Anti-trust law o Discrimination law o Copyright, patents / Intellectual property law o Consumer protection and e-commerce o Employment law o Health and safety law o Data Protection Environmental factor:...