San Miguel Corporation (PESTEL Analysis)

Political Factors that Impact San Miguel Corporation

- Political Governance System

 Based on the information provided in the San Miguel: Succession in the

Philippines' Largest Corporation case study, it seems that the country
have a stable political system. SMC Succession can make strategies
based on the stable political environment.

- Size of Government Budgets

 Both Local Governments and National Government – The government at

both national level and local levels are running deficit budgets which is
boosting growth in the short term but may lead to increase in inflation over
medium term. The bond rating of national government is investment
grade.

- Unrest within the Country & Chances of Civil Unrest

 We don’t think that SMC Succession business operations are facing any
dangers from any kind of civil unrest or internal militant operations in the
country.

- Government Regulations and Deregulations

 The government is adhering to all the rules and regulations under World
Trade Organization norms. There is consistency in both policy making and
implementations of those policies.

- Transition of Government and Changes in Policy

 There is consistency in policy making from one government to another.

Secondly governments from all parties adhere to the treaties made by the
previous governments.

- Likelihood of Entering into an Armed Conflict

 From the information in the San Miguel: Succession in the Philippines'

Largest Corporation case study, I don’t think there is a likelihood of
country entering into an armed conflict with a neighboring country.
 - Role Local Governments Play

 Local governments are highly influential in the policy making process and
implementation as most of the policies and regulations are implemented
by the local government as enforcement agencies mostly report to local
government in their own states regarding various laws.

- Judiciary Independence

 In the matter of commercial and business decisions, judiciary of the

country is independent to a large extent. Business do face problem when
the conflict is between public interest and proprietary technology similar to
ruling in South Africa where government & judiciary allowed generic AIDS
drug irrespective of patents of global companies

Economic Factors that Impact San Miguel Corporation

-Economic/business cycle stage

 The economic development of a country directly influences organizational

performance. Growing economies offer wide-ranging growth opportunities
to the Reinventing the San Miguel Corporation. Similarly, it is important to
understand the industry lifecycle stage. Entering in mature industries can
be more challenging due to market saturation than industries at the growth
stage. Moreover, the business performance of Reinventing the San Miguel
Corporation is also influenced by the extent to which the host country
government has spent on core infrastructure development. A well-
developed infrastructure facilitates the business environment and
increases the growth potential of the gold industry in the respective
country.

-Inflation/employment/interest/exchange rates

 The GDP growth rate will determine the Reinventing the San Miguel
Corporation.’s ability to pursue its long-term growth strategies. High GDP
also signals the consumers’ ability to spend more on offered products.
High unemployment signals the availability of surplus labor at
comparatively lower wages. Operating in such a market can lower the
production cost of Reinventing the San Miguel Corporation. The
organization should also carefully consider the interest rate and its
influence on borrowing ability and attitude towards investment. The high
interest rate will encourage the attitude towards investment and increase
 growth opportunities for Reinventing the San Miguel Corporation. Finally,
the exchange rate fluctuation can also influence the profitability and
international trade. The high fluctuation on local currency can be a cause
of serious concern for Reinventing the San Miguel Corporation.

-Labor market conditions

 The demand and supply of labor determine the wage rates and supply of
skilled workforce. Reinventing the San Miguel Corporation. must study
and predict the labor market conditions to understand how it can attract
talented workers and leverage their skills to improve business
performance. When labor markets are flexible, Reinventing the San
Miguel Corporation. can take advantage of higher labor productivity.
Whereas, operating in rigid labor markets may cause labor wage and
other issues raised by powerful labor unions. Reinventing the San Miguel
Corporation. should also carefully analyze the availability of skilled human
capital as a shortage of skilled labor can affect business efficiency and
make talent attraction and retention more challenging.

-Financial markets efficiency

 The global expansion strategies of the Reinventing the San Miguel

Corporation are influenced by the financial market efficiency as operating
in highly efficient financial markets leads towards improved liquidity
position and strengthened ability to enter new markets. The health and
efficiency of financial markets will determine Reinventing the San Miguel
Corporation.’s ability to raise the capital at fair prices.

-Economic structure

 The business practices of the Reinventing the San Miguel Corporation.

are influenced by the prevailing economic structure. The economic and
regulatory environment in a monopolistic or oligopolistic structure will be
different from the monopolistic competition and perfect competition.

Social Factors that Impact- San Miguel Corporation

-Demographic trends

 Changes in demographic patterns like aging population, migration trends

and socio-economic variables have paramount importance for
international business organizations like Reinventing the San Miguel
 Corporation. Studying the demographic characteristics can help
Reinventing the San Miguel Corporation. in choosing the right market
segment/segments with high growth potential. The business and
marketing strategies are also influenced by migration. It is important for
Reinventing the San Miguel Corporation. to understand the people’s
general attitude towards migration as it can influence firms’ ability to bring
international managers to host country.

-Equality and power distance

 The power distance within any society shows the acceptance of hierarchy
and income inequality. Reinventing the San Miguel Corporation. must
adjust its business management practices while entering in markets with
high or low power distance. The growing inequality in many countries is
altering the power structure, which has serious implications for
international business organizations like Reinventing the San Miguel
Corporation.

-Gender Roles

 Reinventing the San Miguel Corporation. need to study the traditionally

assigned gender roles to align its marketing and communication practices
accordingly. Marketing and human resource strategies in a traditional,
patriarchal society with clearly distinguished gender roles will be different
from societies with low gender stereotypes.

-Societal norms and class distribution

 Culture is considered an important variable by international marketing

managers. Each society has distinctive norms and values that play an
important role in shaping consumer behavior. Reinventing the San Miguel
Corporation. should develop local teams and develop local partnerships
for understanding the societal attitudes and norms to tailor marketing
strategies according to unique cultural context. The observation of social
class stratification is also important for Reinventing the San Miguel
Corporation. Offering luxury products at premium prices to a market where
the high-end market is considerably small in number will require
Reinventing the San Miguel Corporation. to adopt the niche marketing
strategies. Similarly, market segmentation based on social class may be
ineffective where social class stratification is low.
 -Online shopping

 The advent of social media and e-commerce has encouraged online

shopping behavior among customers. Reinventing the San Miguel
Corporation. needs to understand the online shopping behavior by
considering the generational differences as younger consumers are more
inclined to shop online than older customers. The growing use of mobile
phones and social networking sites must be considered when developing
marketing and communication strategies.

-Spending patterns and behavior

 The consumers’ spending patterns are influenced by their purchasing

power of money. Studying and forecasting the consumers’ purchasing
power based on relevant economic indicators is important to analyze the
customers’ interests and spending patterns. In some societies, consuming
the offered product is considered a status symbol, while, some people use
the same products for functional aspects. Reinventing the San Miguel
Corporation. should invest time on understanding the consumption
motivations and social trends that define the consumption behavior.
Reinventing the San Miguel Corporation. should also attempt to
understand the degree of consumer ethnocentrism and consider the
country of origin effect to determine local consumers’ evaluation of foreign
products. Lastly, Reinventing the San Miguel Corporation. should study
the consumers’ leisure interests and should focus more on enhancing the
customer experience if customers prefer experiential products over
traditional product offerings.

Technological Factors that Impact San Miguel Corporation

-Social media marketing

 The development of information and communication technologies has led

towards the adoption of innovative marketing techniques to enhance
collaboration with customers. Use of social media has become common in
a modern business environment. Reinventing the San Miguel Corporation.
can leverage the opportunities offered by social media marketing to
improve business performance. Technological trends can be used to start
the creative social media campaigns for developing online brand
communities.
 -Technological innovations and development level

 Reinventing the San Miguel Corporation. should carefully consider the on-
going technological innovations to stay ahead of the competition. A close
eye should be kept on analyzing the 5G and determining its potential to
deliver positive business outcomes through enhanced user experience,
increased speed and expanded access. Technological innovations like
this can bring major transformations in the industry and reset the success
rules for market players. Moreover, considering the development and
maturity level of technology in the respective market is also important.
Entering in markets where technological advancement has not reached
the maturity means Reinventing the San Miguel Corporation. can increase
the market share by focusing on emerging technological innovations.

-Research and development on technology and impact on cost structure/value

chain

 Reinventing the San Miguel Corporation. needs to consider the

investments made by competitors on a micro and macro level to
understand how new technologies influence the firm’s value chain and
prevailing cost structure. Research and development activities are highly
important in an environment characterized by creative disruption. In such
an environment, Reinventing the San Miguel Corporation. should invest in
disruptive technologies to maximize the profits and re-invest the profits for
future disruptive technologies.

-Shortened product life cycles

 The adoption of new technologies has shortened the lifecycle of new

product development. Today, new products are developed quickly, and
supply chain partners have also gained more power. It pressurizes the
Reinventing the San Miguel Corporation. to develop new products quickly,
increase product range diversity, integrate flexibility into the value chain
and develop healthy business relationships with value chain partners.

Environmental Factors that Impact San Miguel Corporation

- Environmental Standards and Regulations both at National & Local Levels

 Often the environment policy at national and local level can be different.
This can help Smc Succession in numerous decisions such as plant
location, product development, and pricing strategy.
- Influence of Climate Change

 How climate change will impact Smc Succession business model and
supply chain. For example if the supply chain is not flexible it can lead to
bottlenecks if shipments from one part of the world are delayed because
of sudden climate shift.

-Waste Management

 The country has high regulations for waste management and control. San
Miguel Succession in the Philippines Largest Corporation, in view of
environmental sustainability, already has a controlled and designated
process of managing waste, and disposing waste in an environmentally
friendly manner.

- Attitude towards eco-friendly product

 There is a growing trend towards the use of green/eco-friendly products.

Regulatory bodies’ emphasis on ensuring compliance with environmental
norms is altering the product innovation priorities. It requires Reinventing
the San Miguel Corporation.

-Green consumption

 Consumers in the country, and across all markets are increasingly

preferring products and services that are green. San Miguel Succession in
the Philippines Largest Corporation has also introduced a green product
line – which is a variation of its existing products. The company plans on
increasing weightage for the green product line gradually to increase its
role in environmental sustainability.

-Renewable energy investments

 This is being done to reduce the environmental footprint by the market, as

well as for reducing the carbon effect. San Miguel Succession in the
Philippines Largest Corporation and related industry members are
increasingly making use of solar energy, and hydroplanes for purposes of
operation management and business processes.
Legal Factors that Impact San Miguel

- Health & Safety Laws

 What are the health and safety laws in the country and what SMC needs
to do to comply with them. Different countries have different attitude
towards health and safety so it is better for SMC to conduct a thorough
research before entering the market.

- Employment Laws

 Country wide regulations demand businesses to form legal contracts

pertaining to employment .The HR department of San Miguel Succession
in the Philippines Largest Corporation also regularly conducts workshops
and training sessions for employees to engage them, and make them
aware of the employment laws, along with other legal formalities.

- Intellectual property laws

 Intellectual property regulations are designed to protect the companies'

patents and valuable ideas. Inability to protect intellectual property rights
can result in losing competitive advantage, which may weaken the
positioning of Reinventing the San Miguel Corporation against other
market players.

- Data Protection Laws

 Smc needs to assess what are the data laws in the country and what it
needs to do to comply with them. For example most of EU countries now
want the EU citizen data to be saved in EU countries only.

- Consumer Protection Laws

 Smc needs to know what the consumer laws are, what the rate of
enforcement is, what is the attitude of authorities towards consumer
protection laws, and what is the role activist groups in enforcement of
consumer protection laws.

-Anti-discrimination law

 The Company follows the anti-discrimination law in all its processes – from
recruitment to promotion. All employees regularly undergo diversity
trainings and workshops to be able to avoid discriminatory and prejudiced
actions – which could have severe repercussions. San Miguel Succession
in the Philippines Largest Corporation also ensures that there is no
 discrimination within the company, and the organizational culture remains
toxic free

References:

https://embapro.com/frontpage/pestelcase/20281-smc-
succession?fbclid=IwAR0BPZvp6Gd9acWqafo2HKRBGHHgBGlPEKiwB96TDfjFWz8U
Mcug3xBxRqQ

https://www.case48.com/pestel-case/3472-Reinventing-the-San-Miguel-
Corporation?fbclid=IwAR07NpcXF_WnD7NtTV7rQS3lkt9zfDXmgMJQQ3QnU5Vc2s15
QAZp5RvGlc8

https://www.247caseanalysis.com/case/San-Miguel-Succession-in-the-
Philippines-Largest-Corporation-23326-Pestel-
Analysis?fbclid=IwAR3VOJOrmuykNt8uTPNp0dBDlhIPYk1apF7ViO2mjZR7m1AJztN_
m6zj_HY

Submitted by:

Antolo, Ian Ceasar

Casiple, Jieya Kylah

Garcia, Judith Lalaine

Patoy, Kay Jyrah

Salvaria, Jessica

BSMA 4-B