Environmental

Analysis
(PESTEL)
Environmental analysis is a strategic
tool. It is a process to identify all the
external and internal elements, which
can affect the organization’s
performance. The analysis entails
assessing the level of threat or
opportunity the factors might present.
These evaluations are later translated
into the decision-making process. The
analysis helps align strategies with the
firm’s environment.
 What is Environmental Analysis(PESTEL)
 Our market is facing changes change daily. A lot of new things develop over time, and an entire plot can change in just a few
seconds. Some factors are beyond your control. But, you can control a lot of it.

 Companies are strongly influenced by their environment. All the cyclical factors that define daily circumstances have an impact on
businesses. Therefore, companies must constantly analyze the business and market environment.

 There are many strategic analysis tools a business can use, but some are more common. The most widely used detailed
environmental scan is the PESTLE scan. This is an overview of the company. Managers and strategy designers use this analysis to
find out where their market is currently. It also helps predict where the organization will be in the future Summarize

 It is a macro environment which is used to understand the impact of the external factors on the organization.
 Factors of Environmental Analysis PESTEL)
 PESTLE analysis consists of various factors that affect the business environment.

 Each letter in the acronym signifies a set of factors.

 These factors can affect every industry directly or indirectly.

 The letters in PESTLE, also called PESTEL, denote the following things:
◦ Political factors
◦ Economic factors
◦ Social factors
◦ Technological factors
◦ Legal factors
◦ Environmental factor
Political
 The political factors account for all the political activities that go
on within a country and if any external force might tip the scales in
a certain way. What kind of government leadership is impacting
decisions of the firm
 Some political factors that you can study are: Government policies
Taxes laws and tariff Stability of government Entry mode
regulations

1) Political stability

2) Tax policy

3) Employment labor law

4) Environmental regulations
5) Trade restrictions
6) Tariffs etc
 Economical
 It affects the decision-making process of the organization.
 Listed some determinants you can assess to know how
economic factors are affecting your business, The inflation rate,
The interest rate, Disposable income of buyers, Credit
accessibility, Unemployment rates , The monetary or fiscal
policies, The foreign exchange rate.
 A global player must examine the economic issues in the world
and find opportunities with such conditions for business
growth.

 Example :-
 Economic growth
 Interest rates
 Inflation rate
Social
 It represents the culture of the society that an organization operates
.

 It includes demographics, age, distribution, population growth rates

etc.

 Example :-
 Age distribution

 Population growth rate

 Emphasis on safety

 Career attitudes
 Technological
 It is related to new inventions and development.

 Affect the cost and quality of the outputs.

 Technology alters every minute. That’s why companies must stay
connected all the time. Firms should integrate when needed.
Technological factors will help you know how the consumers react to
various trends. Firms can use these factors for their benefit:
 Example :-

 New discoveries
 Rate of technological obsolescence
 Rate of technological advances Innovative technological platforms
 Automation
 Technology incentives

 Rate of technological change

 Legal
 It consists of both external and internal sides. There are certain laws
that affect both sides of the business environment.
 Legislative changes take place from time to time. Many of these
changes affect the business environment. If a regulatory body sets up a
regulation for industries, for example, that law would impact industries
and business in that economy.
 So, businesses should also analyze the legal developments in
respective environments.
 Some legal factors you need to be aware of:
◦ Product regulations

◦ Employment regulations
◦ Competitive regulations

◦ Patent infringements

◦ Health and safety regulations

 Enviornmental
 It refers to ecological and environmental aspects such as climate,
weather and climate change.
 Changes in weather and climate

 Laws regarding pollution and recycling

 Waste management

 Use of green or eco-friendly products and practices

 To conduct environmental analysis, here are 5 simple steps you could
follow:
◦ Understand all the environmental factors before moving to the next step.

◦ Collect all the relevant information.

◦ Identify the opportunities for your organization.

◦ Recognize the threats your company faces.

◦ The final step is to take action.

 Advantages & Disadvantages
Advantage

◦ Provides an understanding of the wider business environment encourages the development of strategic thinking may raise
awareness of threats to an organization's ongoing profitability can help an organization to anticipate future difficulties and take
action to avoid or minimize their effect can help an organization to spot business opportunities and exploit them successfully

Disadvantage

◦ The rapid pace of change in society makes it increasingly difficult to anticipate developments that may affect an organization in the
future. Collecting large amounts of information may make it difficult to see the wood for the trees and lead to "paralysis by
analysis." The analysis may be based on assumptions that prove to be unfounded.
 Apollo Hospitals of India-PESTEL Analysis
The application of PESTEL analysis can help
Apollo Hospital in India A. Identify the main
external environmental forces that shape the
strategy and competitive landscape and support
its strategic decision-making process. As India
Apollo Hospital A. seeks to expand and utilize
its core competencies and capabilities,
conducting a PESTEL analysis is critical to
formulating effective strategies and achieving
long-term growth goals.
Political Factors:
The political environment of a country comprises multifaceted factors. Apollo Hospitals of India A. needs to consider the following political
factors during the strategic planning process:
Political Stability
Apollo Hospitals of India A.
is present in different
countries, each having own
political tensions. Growing
tensions and instabilities in
the global political
environment can affect the
Gold industry growth and
limit the growth
opportunities available to
Apollo Hospitals of India A.
Changing Policies
Frequent changes in
government policies harm
business performance by
increasing environmental
uncertainty. It is important
for Apollo Hospitals of India
A. to study the current trends
in the country's political
scenario as changes in
government may alter the
government's priorities
towards the development of
different industries.
Protests/pressure groups
and governance system
Close collaboration with
such groups may enhance
the Apollo Hospitals of India
A.’s ability to collaborate
with community and achieve
long-term corporate goals.
Moreover, a well-developed
governance system with a
democratic political
environment makes the
business environment more
comfortable for international
business organizations like
Apollo Hospitals of India
Bureaucracy and
Corruption
If Apollo Hospitals of India
A. decides to enter in
markets with the corrupt
economic, political system, it
will threaten the
organization's sustainable
development by
destabilizing the society,
harming justice system and
endangering the rule of law.
Taxation, trade restrictions
and intellectual property
protection
if the government of the
country under consideration
is not serious about
protecting the intellectual
property rights of business
organizations, it will deter
the entrepreneurs from
investing in organizations
due to high risk of ideas
being stolen. Hence, Apollo
Hospitals of India A. should
study how intellectual
property rights are protected
in the host country and make
the business strategies
accordingly.
Social Factors:
The marketing department of Apollo Hospitals may use information retrieved from social, environmental analysis to target the consumer groups
and increase the appeal of offered products to potential buyers. Apollo Hospitals of India A. must consider the following social factors to conduct
macro-environmental analysis:
Demographic trends
Studying demographic
characteristics can help
Apollo Hospitals of India A.
to choose the right market
segment / segment with high
growth potential. Business
and marketing strategies are
also affected by migration.
Apollo Hospital, India A. It
is important to understand
people's general attitudes
towards immigration as this
affects the company's ability
to bring international
managers to the host country
Equality and Power
distance
The power distance in any
society shows the level of
acceptance and income
inequality. A. Apollo
Hospital in India, which has
high or low power remote
access in the market, needs
to adjust its management
practices. Rising inequality
in many countries is
changing the power
structure, which has a
serious impact on
international business
organizations like the Apollo
Hospital in India. A.
Gender Roles
Apollo Hospitals of India
A. 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
Apollo Hospital of India A.
should develop local teams and
develop local partnerships to
understand attitudes and social
norms in order to tailor
marketing strategies to unique
cultural contexts. Also imp for
Providing luxury goods at
premium prices to a market
where the luxury market small
will require Apollo Hospitals of
India A. to adopt appropriate
marketing strategies, market
segmentation based on social
class may not be effective when
social class stratification is low.
Spending patterns and
behavior
Apollo A. Indian Hospital
should devote time to
understanding consumer
motivations and social trends
that define consumer
behavior. Apollo Hospitals
of India A. should also try to
understand the level of
consumer concentration and
take into account the
influence of the country of
origin to determine the
opinions of local consumers
on foreign products..
Technological Factors:

detailed analysis of the technological environment can help Apollo Hospitals of India A. capture the technological trends to achieve certain
business advantages, such as- increasing profitability, boosting innovation process and enhancing the operational efficiency. Following
technological factors can influence the business performance of Apollo Hospitals of India A.:

Social media marketing
Innovative marketing techniques to
enhance collaboration with
customers. Use of social media has
become common in a modern
business environment. Apollo
Hospitals of India A. 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
Analyzing 5G and identifying its
potential to deliver positive
business outcomes through
improved user experience,
increased speeds, and expanded
access needs to be closely
monitored. Penetrating into markets
where technological progress has
not yet matured means Apollo A.
Hospital can increase market share
by focusing on emerging
technological innovations.
Research and development on
technology and impact on cost
structure/value chain
Apollo Hospitals of India A. 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. Apollo Hospitals of India
A. should invest in disruptive
technologies to maximize the
profits and re-invest the profits for
future disruptive technologies.
Shortened product life cycles
The application of new
technologies has shortened the life
cycle of new product development.
Today, new products are developed
rapidly and supply chain partners
have more power. This puts
pressure on the Apollo A Indian
Hospital to rapidly develop new
products, increase product line
diversity, embed flexibility into the
value chain, and develop healthy
business relationships with value
chain partners.
Environmental factors:

The international presence of Apollo Hospitals of India A. require the organization to consider these differences to avoid undesired circumstances
carefully. Detailed environmental analysis is imperative before deciding to enter a new market or start a new product line. Some examples of
environmental factors that Apollo Hospitals of India A. need to consider are given below.

Recycling and Waste
Management
The increase in environmental
pollution associated with
technological advances has forced
companies to adopt innovative
methods of waste management and
recycling. In some countries,
recycling has almost become the
commercial norm. In addition, the
adoption of effective waste
management practices in
organizational units located in or
near urban areas is crucial for
Apollo A Hospital in India.
Renewable Technologies
Some countries offer grants to
encourage investment in renewable
technologies. Apollo Hospital A.
India can benefit and invest in
renewable technologies to ensure
long term sustainability. This
investment will also increase
stakeholder satisfaction and expand
the customer base due to the
improved branding.
Attitude towards Eco-friendly
Products
There is a growing trend towards the
use of green/eco-friendly products.
Apollo Hospitals of India A. can take
it as an opportunity and adopt green
business practices to win the trust of
stakeholders. Regulatory bodies’
emphasis on ensuring compliance
with environmental norms is altering
the product innovation priorities. It
requires Apollo Hospitals of India A.
to prioritize and focus on marketing
the eco-friendly nature of their
products over customary value
propositions.
Environmental regulations to
avoid resource depletion
The excessive depletion of resources
by Apollo Hospitals of India A. may
attract negative reactions from the
media, environmental groups,
customers and the public. Apollo
Hospital of India A. must study the
specific environmental regulations of
the country in question to understand
which resources (such as water,
electricity, etc.) are considered scarce
or which species are endangered.
where overconsumption can cause
problems for the organization
Legal factors:
A careful evaluation of legal aspects is required to avoid getting into some serious trouble. Ignorance in this regard can cause undesired
circumstances for Apollo Hospitals of India A., such as- hurting competitive advantage as a result of intellectual property rights violation and
harmed organizational image due to violation of consumer/employee/environment protection standards. Apollo Hospitals of India A. should
consider the following factors when exploring a new market.

Employee Protection Laws Consumer protection laws Intellectual property laws

Apollo Hospital of India A. is subject to
employee / occupational health and safety laws.
Providing a safe working environment for the
workforce is the ethical and moral obligation of
Apollo A Hospital. Likewise, anti-discrimination
laws (such as equal employment opportunity)
should also be studied. the image of the
organization and affect its ability to attract and
retain talent.
Data protection has become an important issue
due to consumer privacy and security concerns.
Apollo Hospital of India A. needs to study data
protection regulations to protect customer data. In
addition, there are laws to set maximum prices,
guarantee a certain level of quality and protect
consumers from misleading marketing claims.
Apollo A. These factors must be taken into
account to ensure compliance with consumer
protection 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 Apollo Hospitals of
India A. against other market players.