Essay
P4 Unit 3
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Essay of 4 pages for the course Unit 3 at Deltion College (P4 Unit 3)
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P4PESTLE analysis is about the outside of the organisation. The organisation can do nothing about it.
An useful way of analyzing the external forces into sic areas using the PESTLE analysis. PESTLE stands
for political, economic, social, technological, legal and environment influences.
Political factors that affect a business are usually beyond the control of the organisation. However,
the business needs to anticipate changes and identify the action it needs to take to either make the
most of an opportunity or mitigate a threat.
Economic factors can affect the performance of a business. These relate to the national or
international economy, which goes through periods of prosperity, recession and recovery.
Social factors relate to the values and beliefs of society. This includes the population’s demographics.
this provides useful information for businesses targeting their services at broad segments of the
population, such as newspapers and magazines.
Technological developments can affect businesses in a range of ways.
Legal developments, as we have seen affect a businesses in a range of ways. For example, any
changes to the Data Protection Act would affect any business that holds customers data. Similarly,
pubs and restaurants were affected by the introduction of the smoking law, which has led to many
building shelters outside their premises to try to keep smokers custom.
Environment factors can relate to the social, political and legal aspect affecting a business. For
example, a business may decide to package their food products in recyclable packaging. This may
prove to be popular with customers if there is a growing level of concern over waste
Political Analysis and Factors
The Food and Drug Administration (FDA) regards non-alcoholic beverages such as Coca-Cola as within
the food category. The government regulates the manufacturing procedure of these products.
Companies that fail to meet the government's standards are subject to fines. Coca-Cola is also
subject to the Occupational Safety and Health Act and to local, state, federal, and foreign
environmental regulation. Following are some of the factors that are influencing Coca-Cola's
operations:
1. Changes in laws and regulations, changes in accounting standards, taxation requirements (tax rate
changes, modified tax law interpretations, entrance of new tax laws), and environmental laws either
in domestic or foreign authorities.
2. Changes in non-alcoholic business era, competitive product and pricing policy pressures and ability
to maintain or earn share of sales in worldwide market compared to rivals.
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