PESTEL ANALYSIS

PESTEL ANALYSIS

Scanning of environmental factors which may affect one's business

Multiple Choice

When is PESTEL Analysis useful?

• When you are in the process of setting up a new business

• When you already have an existing business and want to expand to a new market

• When you already have an existing company under which you plan to launch a new product/service that belongs to a different industry

• All of the above

These factors help us gain insight

in order to formulate business strategies.

Let us take a look at each factor

and its impact on Luna's Sushi Bake business

POLITICAL

• Government policies / laws / Industry regulations

• Global trade agreements/restrictions

• Tax implications

• Political stability

Multiple Choice

Because of extrajudicial killings under Duterte's administration, Luna's Japanese suppliers decided to pull out of the country. Although there are other suppliers in the market, this Japanese store was the most reliable and had the best quality.

How does this POLITICAL FACTOR affect Luna's business?

• Positively

• Negatively

Environmental Factors

may be

OPPORTUNITIES or THREATS

Because of Luna's careful attention to customer satisfaction, her Sushi Bake grew so big that its sales value was at least Php700k/week. It registered for a trademark. Unfortunately, in the Philippines, trademark protection is not that strong. Someone copied her logo and brandname, and started selling online.

Multiple Select

What could be the possible effects of this PESTEL FACTOR to Luna's business?

CHECK ALL THAT APPLY. At least one is an incorrect answer.

• Her market share could be eaten into by a copycat and grown smaller

• Substandard quality of the copycat could discourage customers from making repeat purchases

• Bad reviews could circulate and derail Luna's marketing efforts

• Bad publicity is still publicity. Luna could get famous and garner more sales.

ECONOMIC

• Economic growth/decline

• Inflation, Interest rates & Cost of living

• Exchange rates & Globalization

• Labor costs & Consumer spending

Open Ended

She thought of expanding and building a commissary. For this, she needed extra funds and checked the prevailing lending rate of commercial banks.

Do you think Luna should proceed with her plan? In ONE sentence, state and explain your position.

e.g.,

Yes, she should proceed because...

OR

No, she should not proceed because...

SOCIO-CULTURAL

• Population size, Demographics, & Age Distribution

• Income levels, Consumer tastes, & Buying habits

• Health & Lifestyle trends/choices

• Cultural barriers

• Demands and Rights of the workforce

Open Ended

Ponder on the present state of our society. Name one sociocultural factor that may have an impact on Luna's business.

e.g.,

The growing number of health buffs may impact Luna's business [^positively / _negatively] because...

TECHNOLOGICAL

• Maturity of equipment and Innovation (e.g., Automation, Robotics)

• Technology platforms (e.g., Social networking, Online shopping, Mobile banking)

• Information systems (e.g., Data storage and security, AI)

• Consumer access to technology (e.g., Smartphones)

Open Ended

Ponder on the present use of GCash in our society. Complete the sentence below.

e.g.,

The use of GCash in society today has ___________ and this may impact Luna's business [^positively / _negatively] because...

ENVIRONMENTAL

• Weather / Climate 

• Climate Change 

• Ethical sourcing of goods and services

• Environmental Offsets

LEGAL

• Labor laws on Compensation (e.g., Minimum wage, 13th month pay)

• Labor laws on Benefits (e.g., separation pay, retirement benefits)

• Health and Safety Practices (e.g., Covid 19 vaccine)

In Luna's Case, for example

If in her study, she realizes that (1) a sizable number of people want "sushi" bake but don't like raw fish and (2) the K-Pop and K-drama revolution has become a cult in the Philippines... the OPPORTUNITY to make KIMCHI BAKE would be glaring at her.

DON'T BOTHER

with the factors not relevant to your business.

Applicable in the Local Setting Also

For Luna, deliveries to all resellers can be scheduled on the same day to realize cost and time efficiencies... so on and so forth. You get the picture.