The PESTLE analysis framework
Discuss about the Technique For Business Models Business Strategies.
International business has emerged as the recent trend in the business world and it is generally seen that most of the business organizations in the present times take the help of this particular style of business “not only to reach out to a larger number of people but also to bring about their overall growth as well as development” (Srdjevic, Bajcetic and Srdjevic 2012). This particular trend can be seen as a reflection of the changing nature of the contemporary business world which in turn has been brought about by the “recent changes in the fields of technology as well as innovations and also on the score of globalization” (Zalengera et al. 2014). However, before the various business organizations can embark on the process of internationalization there are certain factors which they need to take into consideration (Sebestova and Nowáková 2013). The most important tool which is used by the various business organizations to analyze the business environment in which are operational is the tool of PESTLE analysis (Sebestova and Nowáková 2013). This essay will discuss about this particular framework and will try to show that the economic factor is one of the most important factors which affect the business of a particular business organization in an international setting.
The PESTLE analysis is a framework which is being used by the various business organizations in the present times to analyze the macro as well as the micro environment in which they operate (Bartusková and Kresta 2015). This particular framework gives the various business organizations an idea about the key competencies as well as the weaknesses of the environmental conditions in which they are operational (Khan, Alam and Alam 2015). Furthermore, this particular framework also provides an idea to the various business organizations about the key opportunities as well as threats which galore their business organizations. Therefore, it would be apt to say that the framework under consideration has emerged as one of the most important ones in the recent times and helps the various business organizations in a significant manner in the formulation as well as the implementation of new strategies with the view to mitigate the risks and the threats faced by them. Thus, this particular framework becomes of paramount importance for the business organizations which are following the various precepts of internationalization (Khan, Alam and Alam 2015).
The importance of economic factors in PESTLE analysis
In the opinion of many people not all the components of the framework under consideration here are of equal importance (Utami and Lantu 2014). In the recent times it is generally seen that the economic factor has gained much more prominence than the other factors and it is a reflection of this particular factor that the various business organizations which follow the policy of internalization take this particular factor into special consideration (Butryn et al. 2015). It is significant to note that since the ancient times the economic factor has played a significant role in the business world and therefore it is seen that a sound and strong economic condition is one of the most basic requirements of the various business organizations even in the present times. Money or monetary gains is one of the primary reasons which not only influences the various business organizations but also motivates the concerned business organization to perform in a much better manner. Thus, it is seen that the various business organizations in the present before expanding their business in any other foreign location one of the primary factors of consideration for the concerned business organization is the economy of the nation under consideration and the net profit percentage which the concerned business organization would be able to gain by expanding into that particular nation. Furthermore, in the opinion of many experts the prospects of a particular business organization is directly related to the economic factor or the economic condition in which it is operational (Butryn et al. 2015). The “Global Strategic Rivalry Theory” propounded by the famous economists “Paul Krugman and Kelvin Lancaster” also state that the economic factor is one of the most important ones among the various factors which affect the business process of a particular business organization (Belniak 2015). Furthermore, the economists are also of the opinion that the factor of economic advantage is often utilized by the various business organizations as a means to gain competitive advantage over their rivals operational in the same field of business. However, there are others who are opinion that the political as well as the legislative factors are more important than the economic factors (Aithal 2016). These scholars are of the opinion that a stable as well as sound political climate is one of the prerequisite for the growth of the various business organizations (Aithal 2016). Furthermore, these scholars argue that even if a particular nation has sound economy but does not have a stable political framework then a particular business organization will find it very hard to sustain themselves in that particular nation (Aithal 2016). Therefore, it is a reflection of this particular fact that the various business organizations find it very hard to sustain themselves in the nations of the politically unstable nations like Syria, Pakistan and others on the score of the unstable politically unstable condition over there inspite of the economic prospects which these nations present to the various business organizations. In addition to these there are others who are of the opinion that the legislative factors are of paramount significance which the various business organizations need to take into consideration for the purpose of their international business in the other nations of the world (Halik 2012). These people are of the opinion that even if a nation is having a sound political as well as economical framework yet the business of a particular business organization is likely to get hampered if the legislations passed by the concerned nation are not congenial for the business of the concerned business organization (Halik 2012). However, there are other scholars who are of the opinion that the various economic factors are of supreme significant for the business of a particular business organization especially when it is trying to expand into the other nations of the world and all other factors are of secondary consideration for the business organization under consideration (Ho 2014). These people support their opinion on the basis of the fact that the political as well as the legislative factors related to a particular nation keep on changing on a regular basis however the economic condition takes decades to change and therefore the primary consideration of the various business organizations during the process of expansion into the other nations of the world should be on the economic factor (Ho 2014).
Different viewpoints on the importance of economic factors in international business
The nation of Australia has one of the most stable economies frameworks of the world and therefore it is generally seen that the various business organizations enjoy a very congenial condition for the business of their business organizations (Paunescu 2013). Furthermore, the nation of Australia by dint of belonging to the one of the first world countries of the world has not only a stable economy but also has adequate tie up with the various other nations of the world and also the World Bank. This particular feature is of paramount importance for the various business organizations operational or trying to expand in to the developing nations of the world. For example this will be one of the most important factors for the business organizations trying to expand into the nation of Syria on the score of the unstable economy which the nation has since the trouble started in the year 2011 (En.zamanalwsl.net. 2018). However, various critics are of the opinion that the economic condition of the nation is likely to revive once the war gets over and this will act as a boon for the business organization which are trying to expand into this particular nation (Newsdeeply.com 2018). Furthermore, the increase in the prices of the barrels of oil which forms one of the key raw materials for the various business organizations operational in the nation of Australia also created a stir in the business world of the nation (The Sydney Morning Herald. 2018). Thus, it would be apt to say that the economic factor in the recent times has one of the major factors which affect the business of a particular business organization.
To conclude, the business environment in which a particular business operates forms one of the most important elements of the business of the concerned business organization. Therefore, it becomes very important for the various business organizations to analyze the business environment in which they are operational. Furthermore, an analysis of these factors not only provides relevant information to the various business organizations about the conditions in which they are operational but also helps them to develop effective mitigation strategies. In the present times it is seen that the economic factors have gained more prominence than the other factors which affect the business process of a particular business organization. It is a reflection of this particular fact that the primary consideration of the various business organizations during the time of expansion into the other nations of the world is on this particular factor.
References
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