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Supply market analysisc, A concept in marketing principles
Used as a…
Supply market analysisc
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Week 1:
PESTEL analysis
What is PESTEL?
Used as a tool by companies to track the environment they’re operating in or are planning to launch a new project/product/service etc
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- A concept in marketing principles
- Used as a tool by companies to track the environment they’re operating in or are planning to launch a new project/product/service etc
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E- Economic factors
Definition: Determinants of an economy’s performance that directly impacts a company and have resonating long term effects
Example: A rise in the inflation rate of any economy would affect the way companies’ price their products and services. Adding to that, it would affect the purchasing power of a consumer and change demand/supply models for that economy
Include: inflation rate, interest rates, foreign exchange rates, economic growth patterns etc.
S- Social factos
Definition: These factors scrutinize the social environment of the market, and gauge determinants like
Include: Cultural trends, demographics, population analytics etc.
Examples: Buying trends for Western countries like the US where there is high demand during the Holiday season.
P- Political factors
Definition: These factors determine the extent to which a government may influence the economy or a certain industry
Example: A government may impose a new tax or duty due to which entire revenue generating structures of organizations might change
Include: tax policies, Fiscal policy, trade tariffs etc. that a government may levy around the fiscal year and it may affect the business environment (economic environment) to a great extent.
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L- Legal factors
Include: Industry regulation, Licenses and permits required to operate, Employment and consumer protection laws, Protection of IP (intellectual property)
Examples: Consumer laws, safety standards, labor laws etc.
Definition: That emerge from changes to the regulatory environment, which may affect the broader economy, certain industries, or even individual businesses within a specific sector
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