IntroductionThe aim of thisassignment is to discuss the ‘Pestle analysis,’and ‘Pestle Factors’ as the pestle analysis is a very useful tool forthe organisation in order to understandthe organizational external elements andstrategy of an organization. Every organization usesthis method to analyze and monitor themacro-environmental that influence the organization.
This approach will help to identify the weaknesses and threats within an organization such method is used in a SWOTanalysis. Every manager seeks this method in order to run their organization with efficiency and effectivework. Pestle analysis consists four factorsthrough which the organization addressoverall strategies to the organizations. Thatfactors are political, economic, social, technological, legal and ecology.Political factors often have muchimportance as it influencing the business; economicfactors are also having a great impact onbusinesses such as demand and supply, interest rates, inflation, and recession. Hence, all these factors havinga great impact on businesses, so it is important to recognize these elements for an efficient and effective organization. All these elements will discussin this assignment its benefits and impact on the organization will give the idea to the managers of an organization regarding this approach. PestleAnalysis It is essential for eachorganization to recognize their external factors and organizational environment that affect their existing operations.
It is found that a number of people organization don’t know their implications.Therefore, it is necessary to understand such implications that affect the organizationfor managers. Hence, the Pestle analysis is the best tool to address thepolitical, economic, social, technological, legal and environmental problems.Further, these factors are fully analyzedand researched, in which it is determinedthat it has the multiple different disciplines for organizations that help the managers to build up an effective organization.
In the present world, the firms become more globalized and increasing their existing borders. Therefore, the techniques of PESTLE ensurethe organization to inquiry each factor or work on such issues. The PESTLEtechniques provide a complete outlinewhich empowers the organization to question the external factorsand environment of an organization anddiscuss and consider such implication that affectsthe organization.
the aim of designingpestle is to simply identify the issues in political, economic, social,technical and ecology as many as possible so then it will be easy how toregulate and overcome form that issue (Atighechian, et al., (2016)). The pestleapproach is very useful and powerful that enable the organization to analyze organizational environment. However, pestleapproach represents one constitute of theinclusive strategic analysis procedure.
The pestle techniquesare the combination of internal drivers and micro-environmental that enable theorganization to address the organizational threats in SWOT analysis. Pestle classifies the influenceswhich need internal changes in a company.Furthermore, the organization can useother tools such as Boston Matrix as well. These approaches are designed for an effective organization. Furthermore, the organization can use this method when launching new products and services, when entering a newcountry or region, when considering a new route to the market, and when workingas part of a planned projection team. Pestle Factors The aim of PESTLE factors is to focus more on increasingissues rather than solving the issues. Every organizationshould focus on addressing the issue that affectsthe organizational environment ratherthan solving, said W. Edwards Deming, (Deming is an American engineer-author, management consultantprofessor, and lecturer).
Therefore, allthe researchers focused on these factors.”The process is likely to adopt whenusing the PESTLE is a relatively simple one.”A brainstorm is a tool that helps in identifying and control the externalfactors of the organization. This processwill help to identify each consequence of every problem. The thirdtechnique is the rate importance, in which itsemphasis on the importance of organizationin critical, extensive, moderate, important and insignificant (Newton, et al.,(2014)).
All these processes enable themanager to have a clear understanding oftheir organization and also will help toidentify the potential risks that company may face in future or address thecurrent external issues and their impact on organizations.The researchers establish pestle six factors that provide a framework of analysis. These factors are deeply discussed next. PoliticalFactorsPolitical factor is anessential part of an organization as government supports the organizationin producing their goods and services. The changes in legislation in the government affectthe organizations. Changes in a political situation that occur seriousimplications For instance, if the government changes its policies,government change its regulation and taxation policies cause seriousimplication such as, (employment laws, reforms, andtrade restrictions, environmental regulations, health and safety requirements,taxations regulations, consumer protection laws). Hence, it helps to identify the political issues andenable to decide the survivability of a firm. The organizations who provide good and services must give taxes withgovernment agreement (Sarwar, et al.
, (2017)). The political conflicts maketrouble in customer related process. Therefore, this process will help the organization to prevent their exports andimports.
EconomicFactorsEconomic factors aremost important for organizations. There are a numberof economic factors that need to consider in order to identify the currentissues for future values of business and investment collection. In order to runan effective business, the key economicfactors are government policies, labor costs, management, interest rates andtaxes should be taken into account.Furthermore, Lego is a Company founded by Danish-ownedapproximately 75 percent. Lego is famous for its toys and100 years old company, this companyface crisis in 2008 as the children do not like to play with physical toys theyfascinate from electronic games onmobile, tablets. They also struggled with the development of games applicationfor computers, tablets, and mobile phones(Tong, et al., (2015)).
After all that the Lego Company again started improvingand growing towards success by reporting double-digitssales in all districts. It is possible because Lego Company is famous for allfields of life, as celebrities are also promoting and using this brand movie are being made on this brand. Hence,Lego is the best example for us to understand the importance of economicfactors in an industry. SocialFactors The Lego Company works together with UNICEF in order to secure the safeguard thechildren rights through abolishing the child labor and child abuse. It has theclear posture of on such problems and all potentials activities in order todevelop the present situation. Further, Lego tookresponsibilities and promised in their business manner because children areemotionally connected with the toys.
Hence, they promise to produce toys thatare healthy for the mind of children (Ho,et al., (2014)). Lego is becoming a market leader and being a market leader Lego isresponsible for promoting issues in childwelfare project. Lego further in order to promote child welfare projects Legogives UNICEF approximately $ 8.2 million for investing in child-related projects in coming yearsespecially for those children who live inwar zones. According to Lego, children mentally growth is based on dailyactivities and different kinds of challenges they perform well as compare withthose who children who live in war zones.
TechnologicalFactors Lego also works together with the Texas Instruments in order to produce robots which are built on greater technology. Such robotsare manufactured through this technology which would control through Bluetooth devicesand remote controls. The Lego’s aim to give opportunities to the students, theRobots is not for sale only, but it canhelp in education as well.
Lego is also called as an Apple in the industry oftoy because it constantly develops itscreations and innovative marketing andalso distributes strategy (Vintil?, etal., (2017)). This company is famous among more than 100 countries across theworld. The best instance for thoughtful and effective advertising by Lego isthe formation of animated series of Ninjago characters. Lego know that numberof children are strongly and emotionally attached and fascinated by watchinganimated cartoon series and by watching such cartoon characters they willdemand character toys. Environmental &EcologicalLego takes two actions for maintaining an environmental company that is to “reducing the Carbon emission and second ismore responsible sourcing of materials,” theyproduce 100 percent renewable blocks by which they intended to accomplishminimum 2.
5 percent efficiency every year in consumption of energy. Further,Lego experiments their supplier throughwhich Lego make the raw material in orderto yield goods through efficiency of energy (Ho, et al., (2014)). Lego use recycles and FSC-certified for packaging andprinting materials with the agreement of WWF in order to give the clean andbest environment. In addition, Logo is alsostated that they collaborate with Germany in order to reduce the carbondioxide emission by producing renewable energy (Lake, et al., (2014)).
Theyalso stated that they would no longerproduce bricks with plastic and oil which is used in the making. Legal The following years theproblem that has outbreaks Lego’s performances and sells the greatest is theexistence of copycat products and reproductions at the market on cheaper thanLego’s price. Therefore, Lego filed against a numberof companies in which one famous Chinese company Coko is also involved. Legoclaimed that these companies produce thesame bricks as Lego make.
All of these companies were asked to confess thesecases were put in the court, where the other party refuses to come into the court for confessing Lego use copyrightand patent laws thus Lego won the case (Vintil?, et al., (2017)). Hence,manufacturing companies should be guarded and careful regarding designs.
Further,with PASTEL approach and ecological aspects, you would analyze on how possible changes inweather and climate cycles will affect theorganisational environment and theiroperation. Hence environmental and ecological characteristics have consequencesinfluences on both social and economic degree. The organizations are facing difficulty in west disposal and packagingthat produce carbon dioxide and affectthe environment. Therefore, on all the electric equipment government of Europecharge taxes on their sales. In this way,they gathered funds to invest in the project for environmental health andreduce the carbon dioxide emission in order provide a clean and clear environment Benefitsand Impact By adopting PESTLE analysis approach the organization able to run its efficient and effective organization.
These exercises enable the organizationto produce quality in their work, furtherit will enable the manager to address the changing factors and to make high-quality decisions while making strategies(Vandekerckhove, et al., (2015)). Furthermore, it will produce the efficiencyto detect the opportunities or threat well before in order to modify riskmanagement. It will “engage a various groupof stakeholder for broad analysis and deeper insights.” The organizations canreuse the PASTEL approach when initiationa new project, look over the position for upcoming projects or initiative plusit will help in measuring the major decisions.
ConclusionIn conclusion, thefollowing assignment discusses the PESTLE analysis and PASTEL factors. In which we discuss benefits of pestle factors onthe organization. Through these factors, the organizationcan able to identify any trends. The impact of an external factor is serious as it hassevere significances. Therefore, pestlefactor’s framework will help to identify why the organization needs change and what strategy should be adopted in order to handle the impact ofthat change. Further, these techniques will clarify the changes and provides potential options. We also compare our topicwith a famous company Lego in which we discuss theapproaches they used for effectiveness for its organization. Lego is a Company founded by Danish-owned approximately 75 percent.
Lego is famous for its toysand100 year’s old company. Lego Company workstogether with UNICEF in order to secure the safeguard the children rightsthrough abolishing the child labor and child abuse. Further, Lego to promotechild welfare projects Lego gives UNICEF approximately $ 8.2 million forinvesting in child-related projects incoming years