Macro environment: PESTEL Analysis

PESTEL analysis is a framework or tool that used to analyze and monitor

macroeconomic factors that can have a profound impact on organization's
operations.

1. Political factors:

- political factors include elements such as tax policies, changes in trade

restrictions and tariffs and the stability of governments.

- Relates to the manner and degree of government intervention in a given economy

or industry.

- Example: Nike

* Business process depends heavily on the type of government. An open

government and a stable political climate provide business and growth
opportunities for the Nike brand

* Political factors positively impact Nike's marketing strategies:

- Low interest rates in it’s the home country, the US

- Favorable international tax agreements

- Receive government support for

2. Economic factors:

- Economic factor is the decisive factor for the performance of a given economy.

- Factors include economic growth, exchange rates, inflation rates, interest

rates, consumer disposable income and unemployment rate.

- These factors can have direct or indirect long-term effects on a company, as it

affects the purchasing power of consumers and can alter the supply / demand
pattern in the economy.

- Example: Nike are affected of economic factors:

Positive Negative
- rapid growth in developing markets - Market crash can be bad news for
- Low labor costs in Far East countries Nike, along with many other major
 keep Nike's revenue growing brands. Consumers can choose to
switch to lower-end, cheaper products if
this happens, or even when good quality
levels become easier to produce.
- Nike's sales to some extent depend on
low labor costs in Far Eastern countries

Social Factors:
-represents the demographic characteristics, norms, customs and values of the population
within which the organization operates.

-includes population trends such as the population growth rate, age distribution, income
distribution, career attitudes, safety emphasis, health consciousness, lifestyle attitudes and
cultural barriers. (These factors are especially important for marketers when targeting
certain customers. In addition, it also says something about the local workforce and its
willingness to work under certain conditions).

 population growth rate, age distribution, income distribution, career, health,

lifestyle, and cultural barriers. ( slide )

Example brand NIKE:

- Improving collective consciousness about fitness and sports.
- Growth of individual wealth in developing countries.
- Rising emphasis on product safety and better quality
- The organization can develop safer products and initiate marketing campaigns that
highlight the safety of its sports shoes, equipment, and apparel.
 - Backlash can cause harm to brand image and sales.

Technological Factors:
-These factors pertain to innovations in technology that may affect the operations of the
industry and the market favorably or unfavorably.

-refers to technology incentives, the level of innovation, automation, research and

development (R&D) activity, technological change and the amount of technological
awareness that a market possesses. (These factors may influence decisions to enter or not
enter certain industries, to launch or not launch certain products or to outsource
production activities abroad. By knowing what is going on technology-wise, you may be
able to prevent your company from spending a lot of money on developing a technology
that would become obsolete very soon due to disruptive technological changes
elsewhere).

Example brand NIKE:

Nike’s business changes as per the technologies available for business processes and
athletic footwear, apparel and equipment.
-It uses one of the most advanced IT infrastructure in operations and delivery.
It uses a model in which transaction and supply chain are linked via Simple Object
Access Protocol (SOAP) and MPPS (massively parallel processor system).
-Nike has efficiently harnessed the online technology to ensure contact less payment via
mobile phones.
-Major parts of the operations have been automated with time thereby reducing labor
costs.
Integrated mobile technologies in its product to reach out of to the consumers.
environmental factors

-which are also sometimes called ‘ecological factors’ — refer to the physical
environment (the climate of Earth, for example). This can include things like
consumer health, climate change, the availability of energy, or any direct consequences
of these things.
- environmental factors can affect many different important aspects of business.
Examples include customer willingness to buy a product (who needs heaters in a hotter
climate?), employee efficiency, and crop/resource availability.
- Includes Climate, climate change, weather, pollution, Availability of natural
resources (oil or natural gas, can vastly change the market. Should the supply of these
goods drop (as is currently happening), prices might grow higher, greatly affecting
businesses that use the fuels in any significant amounts — like industrial or logistical
ones).
==> Consequences: Availability of certain renewable goods, Existence of certain
biological species, Workplace efficiency, Environment-related laws.
-Ex: Nike brand:
* Nike has phrased ISO-1400 as it overall product development outlook  provides a
boost to Nike environmental image.
* It has kept a tab on its carbon footprint and waste management
* Uses organic cotton in its products which considered environment friendly
* Nike shoes easier to recycle (85%)
legal factors:
-Legal factors are external factors which refer to how the law affects the way
businesses operate and customers behave ( Product transportation, profit margins)
-Legal factors can decide whether or not there is a business behind selling a certain
product (perhaps drugs, or sharp objects), and can also affect the mechanisms through
which a company stocks their inventory or interacts with the customer
* Ex of typical laws: Consumer law, Discrimination law, Copyright law, Health and
Safety law, Employment law, Fraud law, Import/Export law
* Consumer law — consumer law (alternatively known as consumer protection) is
designed to protect consumers from fraudulent companies or practices, and preserve their
rights in the marketplace. “How does this affect businesses though?”, you might ask. For
example, consumer law results in large companies having to dedicate a fair amount of
their resources into putting out detailed information about their products and policies. On
the other hand, consumer law in itself makes a business for some private watchdog
companies.
* Employment law — employment law, also known as labor law, dictates how
companies’ employees should be treated. Minimum wage laws can limit the various
different employment possibilities a company can offer, child labor laws can affect the
way tight-knit home businesses in third world countries operate, and dismissal laws can
make firing employees (for whatever reason, perhaps unproductivity) that bit harder
* Ex: Nike brand:
- Nike has already hit roadblocks many of times with litigation over gender
discrimination and hostile work conditions.
- Nike has been charged many of times for dodging taxes and several scrutiny and also
happened over its shady marketing practices. Especially where it offers discounts.
 Vietnamese:
Phân tích PESTEL là một khuôn khổ hoặc công cụ được sử dụng để phân
tích và giám sát các yếu tố kinh tế vĩ mô có thể có tác động sâu sắc đến hoạt
động của một tổ chức.

1. Yếu tố chính trị:

- Các yếu tố chính sách bao gồm các yếu tố như chính sách thuế, những thay
đổi về hạn chế thương mại và thuế quan và sự ổn định của các chính phủ.

- Liên quan đến cách thức và mức độ can thiệp của chính phủ vào một nền
kinh tế hoặc ngành nhất định.

- Ví dụ: Nike

* Quá trình kinh doanh phụ thuộc nhiều vào loại hình chính phủ. Một chính
phủ cởi mở và môi trường chính trị ổn định mang lại cơ hội kinh doanh và
phát triển cho thương hiệu Nike

* Các yếu tố chính trị tác động tích cực đến chiến lược tiếp thị của Nike:

- Lãi suất thấp tại nước sở tại, Hoa Kỳ

- Các hiệp định thuế quốc tế thuận lợi

- Nhận hỗ trợ của chính phủ cho

2. Yếu tố kinh tế:

- Yếu tố kinh tế là yếu tố quyết định đến hiệu quả hoạt động của một nền
kinh tế nhất định.
- Các yếu tố bao gồm tăng trưởng kinh tế, tỷ giá hối đoái, tỷ lệ lạm phát, lãi
suất, thu nhập khả dụng của người tiêu dùng và tỷ lệ thất nghiệp.

- Những yếu tố này có thể ảnh hưởng trực tiếp hoặc gián tiếp trong dài hạn
đối với một công ty, vì nó ảnh hưởng đến sức mua của người tiêu dùng và có
thể làm thay đổi mô hình cung / cầu trong nền kinh tế.

- Ví dụ: Nike bị ảnh hưởng bởi các yếu tố kinh tế:

Tích cực Tiêu cực

- tăng trưởng nhanh ở các thị trường
đang phát triển
- Chi phí lao động thấp ở các nước
Viễn Đông giúp doanh thu của Nike
tăng trưởng
- Thị trường sụp đổ có thể là một tin
xấu đối với Nike, cùng với nhiều
thương hiệu lớn khác. Người tiêu
dùng có thể chọn chuyển sang các
sản phẩm cấp thấp hơn, rẻ hơn nếu
điều này xảy ra, hoặc ngay cả khi
mức chất lượng tốt trở nên dễ sản
xuất hơn.
- Doanh số của Nike ở một mức độ
nào đó phụ thuộc vào chi phí lao
động thấp ở các nước Viễn Đông