Impact of external influences 3.1.4 Flashcards
What does PESTLE stand for?
Political
Economic
Social
Technological
Legal
Ethical/ Environmental
What is PESTLE analysis?
Is a framework for assessing the key features of the external environment facing a business.
Examples of political factors
- Competition policy
- Industry regulation
- Govt. spending and tax policies.
- Business policy and incentives.
Examples of economic factors?
- Interest rates
- Consumer spending and income
- Exchange rates
- Business cycle
Examples of social factors
- Demographic change
- Impact of pressure groups
- Consumer tastes and fashions
- Changing lifestyle
Examples of technological factors
- Disruptive technologies
- Adaptation of mobile technology
- New production processes
- Big data and dynamic pricing
Examples of legal factors
- Employment law
- Minimum/living wage
- Heath and safety laws
- Environmental legislation
Examples of ethical/ environmental factors
- Sustainability
- Tax practices
- Ethical sourcing
- Pollution and carbon emissions
What are porters 5 forces?
- Bargaining power of supplier
- Bargaining power of buyers
- Threat of new entrants
- Substitutes
- Rivalry among existing firms
What is Porter’s 5 forces model?
A framework for analysing the nature of competition within an industry. Help assess and understand industry profitability and attractiveness.
What are the reasons why competitive rivalry vary between industries?
- Size
- Structure
- Distribution channels
- Customer needs and wants
- Profitability
- Growth
- Product life cycle
What are low industry profits associated with?
- Strong suppliers
- Strong customers
- Low barriers to entry
- Many opportunities and substitutes
- Intense rivalry
What are high industry profits associated with?
- Weak suppliers
- Weak customers
- High barriers to entry
- Few opportunities and substitutes
- Little rivalry
What is a competitive environment?
The degree of competition in the market and buying and selling power of customers and suppliers of them that market.
