ID:1911031

PESTEL Analysis of PSRM

To identify external factors of PSRM we have used PESTEL analysis tool:

Political Factor: Some political factors of PSRM are discussed underneath:

 Labour Policy: According to international labour policy, a labour can work only 8 hours
per day. PSRM practices labour law strictly in factory.
 Tax policy: Every year PSRM is very much successful to meet all the tax and vat
payments which are issued by government.
 Political Uncertainty: Nowadays, political situation of Bangladesh is much stable
compare to the past. So,now they are not facing any political issues.
 Foreign Trade Policy: PSRM follows all the rules and regulation of NBR and the tax
commission. NBR has types of fiscal policy which are ATI and VAT. As this VAT is
export oriented, they get some discount on that compared to local sales.

Economic Factor:

 Interest Rate:As PSRM do repayment on time, they have a great reputation on banking
sector. They deal with almost 60%-70% banks of Bangladesh. As the interest rate is
calculated by comparing inflation rate, they didn’t face that much issue with interest rate
of Bangladesh.
 Inflation Rate: In terms of inflation rate Bangladesh isn’t a stable country. So for
inflation rate every year the price of the product of PSRM is also increasing. Therefore,
some customers lose their abilities to buy PSRM’s products. Whence PSRM is losing
some shoppers.
 Disposable Income: The mission of every private sector is to maximize their profit.
PSRM is successful in their every year’s plan and target. However, it’s totally up to the
top management. To increase disposable incomes every year they make an estimation of
how much units have to sell for pyramid profit. They play with price to maximize their
profit.
Socio-Culture Factor: Bangladeshi socio culture factors also have impact on PSRM.
Some socio culture factors of PSRM are discussed underneath:
  Population Growth Rate: Being a construction related company PSRM has an
interrelation with population growth rate which plays a vital role to them. It’s favourable
for PSRM.Population growth means more house, more bridge and more construction. So,
population growth increases their sales.
 Cultural Barriers: In steel industry the cultural factors do not put much impression.
PSRM do not really engage culture in their manufacturing process and there is no cultural
barriers related to their products.

Technological Factor: PSRM has highly automated and competitive types of machinery which
are designed based on European technology to become more efficient. So that PSRM can
minimize their cost and maintain good quality of steel.

Environmental Factor:

 Weather of Bangladesh: Sales of PSRM goes down during the monsoon season since the
construction related works don’t take place that much.So, Not to face any shortage in future they
maintain the current production and reservation.

 Environment policy:PSRM always tries to uphold work place safe, secure and want to make
sure the green environment for all of their staffs also for the country.

 Pressures of NGO’s: PSRM give much gravity for CSR that has created good images to
NGO’s. Also they maintain all the rules which are given by the government for manufacturing
company. So, NGOS can’t put much pressure on them.

Legal Factor:

 Legal Issue: Top management of PSRM is very concern about anything related to
government. PSRM claims that it is 100% tax paid company.
 Employment law:After recruitment of new staffs they give them a training which is
included in the employment law, they try to teach them their organizational culture.
 Consumer protection:PSRM does anything what needs to be done to so they strictly
follow the standard given by BSTI.