Running Head: PESTLE ANALYSIS Pestle AnalysisName of WriterName of Institute?Introduction The aim of this assignment is to discuss the ‘Pestle analysis,’ and ‘Pestle Factors’ as the pestle analysis is a very useful tool for the organisation in order to understand the organizational external elements and strategy of an organization. Every organization uses this method to analyze and monitor the macro-environmental that influence the organization. This approach will help to identify the weaknesses and threats within an organization such method is used in a SWOT analysis. Every manager seeks this method in order to run their organization with efficiency and effective work.
Pestle analysis consists four factors through which the organization address overall strategies to the organizations. That factors are political, economic, social, technological, legal and ecology. Political factors often have much importance as it influencing the business; economic factors are also having a great impact on businesses such as demand and supply, interest rates, inflation, and recession.
Hence, all these factors having a great impact on businesses, so it is important to recognize these elements for an efficient and effective organization. All these elements will discuss in this assignment its benefits and impact on the organization will give the idea to the managers of an organization regarding this approach. Pestle Analysis It is essential for each organization to recognize their external factors and organizational environment that affect their existing operations.
It is found that a number of people organization don’t know their implications. Therefore, it is necessary to understand such implications that affect the organization for managers. Hence, the Pestle analysis is the best tool to address the political, economic, social, technological, legal and environmental problems. Further, these factors are fully analyzed and researched, in which it is determined that it has the multiple different disciplines for organizations that help the managers to build up an effective organization. In the present world, the firms become more globalized and increasing their existing borders. Therefore, the techniques of PESTLE ensures the organization to inquiry each factor or work on such issues. The PESTLE techniques provide a complete outline which empowers the organization to question the external factors and environment of an organization and discuss and consider such implication that affects the organization. the aim of designing pestle is to simply identify the issues in political, economic, social, technical and ecology as many as possible so then it will be easy how to regulate and overcome form that issue (Atighechian, et al.
, (2016)). The pestle approach is very useful and powerful that enable the organization to analyze organizational environment. However, pestle approach represents one constitute of the inclusive strategic analysis procedure. The pestle techniques are the combination of internal drivers and micro-environmental that enable the organization to address the organizational threats in SWOT analysis. Pestle classifies the influences which need internal changes in a company. Furthermore, the organization can use other tools such as Boston Matrix as well. These approaches are designed for an effective organization.
Furthermore, the organization can use this method when launching new products and services, when entering a new country or region, when considering a new route to the market, and when working as part of a planned projection team. Pestle Factors The aim of PASTEL factors is to focus more on increasing issues rather than solving the issues. Every organization should focus on addressing the issue that affects the organizational environment rather than solving, said W. Edwards Deming, (Deming is an American engineer-author, management consultant professor, and lecturer). Therefore, all the researchers focused on these factors. “The process is likely to adopt when using the PESTLE is a relatively simple one.” A brainstorm is a tool that helps in identifying and control the external factors of the organization.
This process will help to identify each consequence of every problem. The third technique is the rate importance, in which its emphasis on the importance of organization in critical, extensive, moderate, important and insignificant (Newton, et al., (2014)). All these processes enable the manager to have a clear understanding of their organization and also will help to identify the potential risks that company may face in future or address the current external issues and their impact on organizations.
The researchers establish pestle six factors that provide a framework of analysis. These factors are deeply discussed next. Political FactorsPolitical factor is an essential part of an organization as government supports the organization in producing their goods and services.
The changes in legislation in the government affect the organizations. Changes in a political situation that occur serious implications For instance, if the government changes its policies, government change its regulation and taxation policies cause serious implication such as, (employment laws, reforms, and trade restrictions, environmental regulations, health and safety requirements, taxations regulations, consumer protection laws). Hence, it helps to identify the political issues and enable to decide the survivability of a firm. The organizations who provide good and services must give taxes with government agreement (Sarwar, et al.
, (2017)). The political conflicts make trouble in customer related process. Therefore, this process will help the organization to prevent their exports and imports.
Economic FactorsEconomic factors are most important for organizations. There are a number of economic factors that need to consider in order to identify the current issues for future values of business and investment collection. In order to run an effective business, the key economic factors are government policies, labor costs, management, interest rates and taxes should be taken into account.
Furthermore, Lego is a Company founded by Danish-owned approximately 75 percent. Lego is famous for its toys and100 years old company, this company face crisis in 2008 as the children do not like to play with physical toys they fascinate from electronic games on mobile, tablets. They also struggled with the development of games application for computers, tablets, and mobile phones (Tong, et al., (2015)). After all that the Lego Company again started improving and growing towards success by reporting double-digits sales in all districts. It is possible because Lego Company is famous for all fields of life, as celebrities are also promoting and using this brand movie are being made on this brand.
Hence, Lego is the best example for us to understand the importance of economic factors in an industry. Social Factors The Lego Company works together with UNICEF in order to secure the safeguard the children rights through abolishing the child labor and child abuse. It has the clear posture of on such problems and all potentials activities in order to develop the present situation.
Further, Lego took responsibilities and promised in their business manner because children are emotionally connected with the toys. Hence, they promise to produce toys that are healthy for the mind of children (Ho, et al., (2014)). Lego is becoming a market leader and being a market leader Lego is responsible for promoting issues in child welfare project. Lego further in order to promote child welfare projects Lego gives UNICEF approximately $ 8.
2 million for investing in child-related projects in coming years especially for those children who live in war zones. According to Lego, children mentally growth is based on daily activities and different kinds of challenges they perform well as compare with those who children who live in war zones. Technological Factors Lego also works together with the Texas Instruments in order to produce robots which are built on greater technology. Such robots are manufactured through this technology which would control through Bluetooth devices and remote controls. The Lego’s aim to give opportunities to the students, the Robots is not for sale only, but it can help in education as well. Lego is also called as an Apple in the industry of toy because it constantly develops its creations and innovative marketing and also distributes strategy (Vintil?, et al.
, (2017)). This company is famous among more than 100 countries across the world. The best instance for thoughtful and effective advertising by Lego is the formation of animated series of Ninjago characters. Lego know that number of children are strongly and emotionally attached and fascinated by watching animated cartoon series and by watching such cartoon characters they will demand character toys.
Environmental & EcologicalLego takes two actions for maintaining an environmental company that is to “reducing the Carbon emission and second is more responsible sourcing of materials,” they produce 100 percent renewable blocks by which they intended to accomplish minimum 2.5 percent efficiency every year in consumption of energy. Further, Lego experiments their supplier through which Lego make the raw material in order to yield goods through efficiency of energy (Ho, et al.
, (2014)). Lego use recycles and FSC-certified for packaging and printing materials with the agreement of WWF in order to give the clean and best environment. In addition, Logo is also stated that they collaborate with Germany in order to reduce the carbon dioxide emission by producing renewable energy (Lake, et al., (2014)).
They also stated that they would no longer produce bricks with plastic and oil which is used in the making. Legal The following years the problem that has outbreaks Lego’s performances and sells the greatest is the existence of copycat products and reproductions at the market on cheaper than Lego’s price. Therefore, Lego filed against a number of companies in which one famous Chinese company Coko is also involved. Lego claimed that these companies produce the same bricks as Lego make. All of these companies were asked to confess these cases were put in the court, where the other party refuses to come into the court for confessing Lego use copyright and patent laws thus Lego won the case (Vintil?, et al.
, (2017)). Hence, manufacturing companies should be guarded and careful regarding designs. Further, with PASTEL approach and ecological aspects, you would analyze on how possible changes in weather and climate cycles will affect the organisational environment and their operation. Hence environmental and ecological characteristics have consequences influences on both social and economic degree. The organizations are facing difficulty in west disposal and packaging that produce carbon dioxide and affect the environment.
Therefore, on all the electric equipment government of Europe charge taxes on their sales. In this way, they gathered funds to invest in the project for environmental health and reduce the carbon dioxide emission in order provide a clean and clear environment Benefits and Impact By adopting PESTLE analysis approach the organization able to run its efficient and effective organization. These exercises enable the organization to produce quality in their work, further it will enable the manager to address the changing factors and to make high-quality decisions while making strategies (Vandekerckhove, et al., (2015)). Furthermore, it will produce the efficiency to detect the opportunities or threat well before in order to modify risk management. It will “engage a various group of stakeholder for broad analysis and deeper insights.” The organizations can reuse the PASTEL approach when initiation a new project, look over the position for upcoming projects or initiative plus it will help in measuring the major decisions. Conclusion In conclusion, the following assignment discusses the PESTLE analysis and PASTEL factors.
In which we discuss benefits of pestle factors on the organization. Through these factors, the organization can able to identify any trends. The impact of an external factor is serious as it has severe significances.
Therefore, pestle factor’s framework will help to identify why the organization needs change and what strategy should be adopted in order to handle the impact of that change. Further, these techniques will clarify the changes and provides potential options. We also compare our topic with a famous company Lego in which we discuss the approaches they used for effectiveness for its organization. Lego is a Company founded by Danish-owned approximately 75 percent. Lego is famous for its toys and100 year’s old company. Lego Company works together with UNICEF in order to secure the safeguard the children rights through abolishing the child labor and child abuse. Further, Lego to promote child welfare projects Lego gives UNICEF approximately $ 8.2 million for investing in child-related projects in coming years especially for those children who live in war zones.
Furthermore, we determine that for bringing efficiency in an organization the example we determine that Lego using animated series of Ninjago character as the children fascinate from animated cartoon characters which increase the demand of that cartoon character toys by children. Through these examples, we can understand the use of PESTLE analysis. ?References Atighechian, G., Maleki, M., Aryankhesal, A., & Jahangiri, K. (2016). Are Macro and Micro Environment Affecting Management of Fresh Water Resources? A Case from Iran with PESTLE Analysis.
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