Developing a strategy for a proper kind of approach is necessary for any business ventures. For this purpose, it is essential to make sure that the service providing organizations are taking the tools related to strategic approach on a serious note. In this manner, they are going to get a proper idea of approach and how the process should be oriented with the main goals of the organization. In this context, different kind of strategic management tools can be taken into consideration. The frequently used strategic management tools are Five Forces, Resource-Based View, PROFIT, Input/Output, SWOT Analysis, Generic Strategies, Ansoff and many else.
The focus is going to be given on the aspects that are making PESTLE analysis important in any strategic approach. The necessity, importance and contribution of the management tool will be discussed with proper kind examples that are related to the currently flourishing market.
The PESTLE analysis is one of the most important aspects for a company, which is taking the business to a new place. The market penetrations strategy is dependent on the analysis report, which makes the entire report highly valuable to any organization. The PESTLE analysis provides information on the markets current condition, and in this regard, the service providing authority will analyze the entire market for a better kind of approach strategy. The importance of this tool is described in the following part with proper logical statements.
Political- The political context of a market or to be very precise of a country, is highly influential for any business. The approach for a good kind of market hold depends on the political background’s flexibility, and in this regard, the companies might have to change their organizational policy as well. Political ambience introduces many important aspects, which are needed for proper development, but in some cases, the profit-seeking companies get a negative return from the market as well (Free-management-ebooks.com, 2018). Political party change makes a huge impact on the stock market as well, and people often get benefited from it. A political environment can introduce new predicament, but in order to develop the economic standards of the country, this kind of approaches are strictly avoided. Therefore, it can be stated that a political environment of a country gives the primary notion of what to be done in order to penetrate the market with the proper kinds of strategies.
Economic- The economic standard analysis is one of the most prioritised aspects of all time in any business venture. In this regard, it is important to make sure that the management is doing a proper economic standard analysis of the market. Being a newcomer organization to an unknown environment, it is highly necessary for the company to have an idea of what the financial status is (Gupta, 2018). Economic background analysis is going to provide information which the company can implement in refurbishing the price structure of the goods they are offering to the market. Apart from that, the economic standards of the market will illustrate the possibility of having a proper kind of return on investment related information which is major data for any organization.
Social- the social standards are also important to be taken into consideration by any organisation. The society where the company is planning to do business must accept the trends which the company is planning to introduce. Only this acceptance is going to provide a good amount of profit to the people who are initiating any business venture. Social trends often influence an organization to think from a new perspective, and this primarily happens when the organization finds a big gap between their product line up and the current trend in the particular market (Zalengera et al., 2014). The societal norms make one organization to think from a different angle, and this makes the entire progress bit slower than the usual rate, but an elevated profit ratio can be assured.
Technological- the technological modification of a company highly depends on the market where the company is planning to do business. The company is willing to have better progress rate in a new market and give competition to the existing companies. For this, the company has to make sure that the current technology used by them is adequate to address the needs of the people who are the prime customers of the newly entered target area for business (Lichten et al.,2015). Technical development ensures proper safety, productivity, inventory management, staff management and many things, which cannot be overlooked.
In this aspect, the technological modification is a necessary component to take into consideration. If the market is using higher technology, then the company has to invest more in the technical modification section in the initial period of business establishment.
Bush, T. (2016). PESTLE Analysis: Environmental Factors Affecting Business. PESTLE Analysis. [Online] Available at: http://pestleanalysis.com/environmental-factors-affecting-business/[Accessed on- 22 August 2018]
Free-management-ebooks.com. (2018). PESTLE Analysis - Political Factors. [Online] Available at: http://www.free-management-ebooks.com/faqst/pestle-03.htm /[Accessed on- 22 August 2018]
Gupta, A., (2018). [online] Available at: https://pdfs.semanticscholar.org/d9d2/86c5a903a91d4e5e6cff565f186f91383a02.pdf [Accessed 22 Aug. 2018].
Zalengera, C., Blanchard, R.E., Eames, P.C., Juma, A.M., Chitawo, M.L. and Gondwe, K.T., 2014. Overview of the Malawi energy situation and A PESTLE analysis for sustainable development of renewable energy. Renewable and Sustainable Energy Reviews, 38, pp.335-347.
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