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PESTN analysis is used to analyze in
analyzing the current state/position in the
organization in relation to its external
environment. As the beginning of the
strategic management process an
organization needs to analyze the
environment and identify its strengths
!ea"nesses opportunities and threats. #n
identifying opportunities and threats the
PESTN analysis can be used as it gives a
detailed analysis of the external/macro
environment in !hich it operates. #t
stands for$%
Politicalfactors are basically to !hat degree the
governmentintervenes in the economy. Speci'cally
political factors include areas such astax policylabor la!
environmental la!trade restrictionstari(s and political
stability. Political factors may also include goods and
services !hich the government !ants to provide or be
provided )merit goods* and those that the government
does not !ant to be provided )demerit goodsor merit
bads*. +urthermore governments have great in,uence on
thehealth,education, andinfrastructureof a nation.

Political Factors :-
Economicfactors includeeconomic gro!th
interest ratesexchange ratesand the
in,ation rate. These factors have ma-or impacts
on ho! businesses operate and ma"e decisions.
+or example interest rates a(ect a 'rm.s
cost of capitaland therefore to !hat extent a
business gro!s and expands. Exchange rates
a(ect the costs of exporting goods and the supply
and price of imported goods in an economy.

Economical Factor :-
Socialfactors include the cultural aspects and
include health consciousness population gro!th rate
age distribution career attitudes and emphasis on
safety. Trends in social factors a(ect the demand for a
company.s products and ho! that company operates.
+or example an aging population may imply a smaller
and less%!illing !or"force )thus increasing the cost of
labor*. +urthermore companies may change various
management strategies to adapt to these social trends
)such as recruiting older !or"ers*.

Factor $%
The changes in the technology used in the industry
#nfrastructure such as electricity telephones and
broadband internet /evel of research and
development in the industry /evel of automation.

0ompeting technology development

1esearch funding

Associated/dependent technologies

1eplacement technology/solutions

2anufacturing maturity and capacity

#nformation and communications

Technological Factor :-

Natural Factor :-
The natural resources o!ned by the country
such as oil !ater trees and so on. 0limate
situations )seasons and !eather patterns*Natural
disasters such as ,oods and volcanoes.
PESTN Analysis
ThePESTNAnalysis identifies changes in the market caused by:
Political , Economical, Social and Technological factors & natural
Political Analysis and Factors:Those Non- Alcoholic drinks like
!oca-!ola, are "ithin the food category, under the #$A %#ood and
$rug Administration&. The go'ernment has control o'er the
manufacturing (rocedure of these (roducts in terms of regulations.
!om(anies "ho fail to meet the standards of la", are fined by the
go'ernment. #ollo"ing are (ro'ided some of the factors that are
influencing !oca-!ola)s *(erations.
+.!hanges in ,a"s and -egulations like changes in
Accounting Standards, ta.ation re/uirements %ta. rate
changes, modified ta. la" inter(retations, entrance of ne"
ta. la"s&, and en'ironmental la"s either in domestic or
foreign authorities.
0.!hanges in Non-Alcoholic business era. These are
com(etiti'e (roduct and (ricing (olicy (ressures, ability to
maintain or earn share of sales in "orld"ide market
com(ared to ri'als.
1. Political !onditions, s(ecifically in international markets,
like ci'il conflict, go'ernmental changes and restrictions
concerning the ability to relocate ca(ital across borders.
2n 033+, the recession influenced the com(anies
o(erations, but because of aggressi'e actions the 4S Economy
estimated to ha'e returned in (ositi'e gro"th in 0330. !urrently,
because of global recession, !oca-!ola can borro" ca(ital and
in'est in other (roducts, because the interest rates are lo"ered.
Also, it can borro" to ad'ance its research of ne" (roducts and
technology. 5y researching for ne" (roducts is cost effecti'e, the
com(any could sell its (roducts at a lo"er (rice, so its customers
"ould (urchase more !oca-!ola (roducts at a lo"er (rice.
The ma6ority of 4S citi7ens are e.ercising healthier lifestyles. That
has strongly influenced the sales of non-alcoholic be'erage sector,
because many customers are s"itching to bottled "ater and diet
colas like !oca-!ola ,ight or 8ero, instead of drinking beer or other
be'erages. Additionally, time management is /uite 91 : of all
households, and it has increased. !ustomers aged from 1; to <<, are
concerned "ith their nutrition. Also, large (ortion of the (o(ulation is
"ithin the range of baby boomers age. =hile many customers are
getting at older ages in life, they are more concerned in long term
increasing their (ermanence. That "ill continue to affect the non-
alcoholic be'erage sector, by increasing the demand, in healthier and
other be'erages.
Some factors that affect the com(any)s actual results to 'ary
essentially from the e.(ected results, are the follo"ing:
+.The efficiency of com(any)s ad'ertising, marketing and (romotional
(rograms, The ne" technology ad'ances of tele'ision and internet that
use incom(arable effects for ad'ertising through the use of media.
Those ad'ances make the (roducts seem attracti'e. This su((orts the
selling (romotion of the (roducts. !oca-!ola in media tends to use this
technology so, to sell effecti'ely its (roducts.
0. Entrance of cans and (lastic bottles in the (ast, ha'e increased sales
'olume for the com(any because they are easier to carry and
customers can bin them once they ha'e been used.