What is PESTLE Analysis
PESTLE analysis is a concept in marketing that is used by businesses to assess the environment in which they operates or wants to invest in. It is a mnemonic that when expanded stands for Political, Economic, Social, Technological, Legal and Environmental factors. It gives the company a holistic view of different angles of their environment which they want to keep track of while reflecting on a business plan or idea. Since the management of Baker Hughes INTEQ (BHI) in Texas wants to initiate a full-scale cost and performance review of all the processes that impact production quality and customer’s satisfaction, it is very imperative for them to use PESLE analysis if they are to archive best results (Hughes et al, 2015). This is because it will help them to determine the entire factor that normally affects their operation and make relevant decisions.
Political environment
To begin with the managment should first keenly asses the Political Environment of Texas and United states as a whole. This will help them determine the extent to which the government may or is affecting the economy or industry. For example, in past few years the taxes that the government is imposing on the company has drastically increased. This has ended up affecting the revenue structure of the organization. Since the company does not want to transfer the burden to customers by increasing prices of the machines, they have decided to implement other alternative procedures to cub this.
Economic
The company should look at economic factors that might directly impact the business (Lenard, 2015). Some important Economic factors that they should critically asses include inflation rates, demanded and supply, interest rates, exchange rates and economic growth due to their drastically changing nature.
Social
The company should gauge the social determinants such as cultural beliefs or trends and demographic a factors that might have a direct impact to the business. Examples include taste or preference trends and beliefs that might encourage or discourage people to buy the company’s machines.
Technological environment focuses mainly on innovation in technology that might directly affect the business. Legal factors are particular laws either internal or external that might affect the business. Environmental factors lastly are those elements from the surrounding environment that might impact the company. All these are very imperative for the effective running of the company.
References
Hughes, B et al. (2015).Radical Bearing Team: A manufacturing Group’s Transformation to
self-Directed Work Teams. New York: Hult International Business School.
Lenard, L. (2015). Pestle Analysis self study. New York: Create space Independent Publishing
Platform.
