THE POLITICAL

OR LEGAL
FACTORS
AFFECTING
THE BUSINESS
 Why should companies
be concerned about
1 global political and legal
issues?
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POLITICAL OR
LEGAL FACTORS
Political or legal issues is one of the components of PEST analysis. According to
Kenton (2020), in order to become more competitive in the market, a company might
evaluate significant external variables that impact its operation and in that view,
PEST analysis comes in handy.

It is a strategic business tool that allows businesses to identify, analyze, organize, and
track macroeconomic elements that may have an influence on their operations now
and in the future. This helps the organizations understand the "big picture" forces of
change that their exposed to, and, from this, take advantage of the opportunities that
they present.

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What are the Political or
legal Factors?
GOVERNMENT
▸ bureaucracy
▸ corruption level
▸ tariffs and tax policy (tax
rates and incentives)
▸ government stability and
related changes
CUSTOMS
▸ foreign trade regulations
▸ freedom of the press
▸ competition regulation
LAW
▸ anti-trust law
▸ employment law
▸ data protection law
▸ intellectual property law
(copyright, patents)
▸ consumer protection
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GOVER
N
MENT 6
Bureaucracy
In business, bureaucracy is a
hierarchical organization or a firm
that follows a set of pre-determined
regulations.

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 Corruption
Level
is a hindrance to economic progress. and
rampant in a firm. It causes the entire
business climate suffers

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Tariffs and Tax Policy

government laws may increase the tax

rate for some firms while lowering it for
others which affects earnings.

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Government Stability and
Related Changes
Lack of political stability can have a
substantial influence on commercial
operations.

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CUSTOMS

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Foreign Trade
Regulations
Tax rules might stymie the
development of specific businesses.

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Freedom of the Press

is an essential component of a
democratic society. It is the
freedom to express oneself without
fear of censure from the
government.

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Competition
Regulation
It promotes a corporate culture that
fosters competition, allowing firms to
adapt and evolve in order to stay a
successful competitor in the industry.

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LAWS
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Anti-Trust Law

It ensure a level playing field for similar

firms in a given industry while
prohibiting them from obtaining
excessive control over their competitors

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Employment Law

It safeguard employees' rights

and cover every element of the
employer-employee
relationship.

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Data Protection Law

Data protection law guaranteed that

legal duties of business is satisfied

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Intellectual Property
Law
is utilized to propel a small
business's growth and
reputation, as well as to
carve out a market niche.

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 Consumer Protection
intended to protect consumers
from deceptive businesses or
activities while also preserving
their rights in the marketplace
What are the Effects
of Political or legal
Factors?
 Effects of Political or
legal Factors?

▸ economic impact
▸ changes in law
▸ political climate
▸ political risk.

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Economic Impact

A country's political situation has an

impact on its economic situation and
The state of the economy has an impact
on business performance.

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Changes in law

As the law change, the

taxes of the economy
follow.

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Political Climate
a country's political climate and
economic environment are
inextricably linked. It will have
an impact on the bottom lines of
their business

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Political Risk
It refers to the danger that a
host country may make
political decisions that have a
negative impact on business
earnings or aims

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THANKS
!
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