PESTEL analysis helps to analyse external macro-environmental factors and assesses their impact on organisation. The PESTLE analysis framework is made up of Political, Economical, Social, Technological, Legal and Environmental factors.
Given the company’s international operations, political factors for Sharp can vary from country to country. In addition, these factors can change dramatically at any time as governments have the power to introduce any new regulations, impose tariffs or taxes. This shows that the company does not have any control over these factors or has a very little influence as they are usually exist at national level.
However, almost all political factors that affect the Sharp have the same effect on its competitors. Hence, the company must be prepared for any possible changes that affect its trade in order to stay ahead of it competitors by incorporating existing political factors into its business strategy and constantly review the effects of these political factors.
Without doubt the macro-economic factors are one of the most important external factors for the company as they have profound effect on the company’s business. Moreover, considering the nature of products the company manufactures and sales, the economic indicators such as GDP growth rates, the level of disposable income and employment rates have strong impact on the company (Mintzberg et al, 2002).
Furthermore, given the company’s international operations, Jonson and Scholes (2006) point out that the changes in interest and exchange rates is another important economic factors as it affects company’s income from foreign countries.
Although Sharp has a strong brand associated with reliable and quality products, the company must ensure that its products reflect the changes in social and cultural trends and in particular able to attract new generation of consumers.
Moreover, given that the products the company manufactures and the market it operates is subject to rapid changes and intense competition, the company must continuously improve its work of ideas and creativeness in order to meet changing consumer needs, tastes and lifestyles (Kotler and Keller, 2009).
As the nature the business is based on technology, it is obvious that the success of the company also depends on technology. Therefore, without doubt the changes in technological factors have profound impact on the company’s business.
The company has to ensure that it constantly upgrades and uses new up-to-date technology in order to increase productivity, innovation, efficiency and most of all to stay ahead of its competitors. In addition, the rapid change in technology and competitive market requires the company to invest constantly and significantly on its research and development works and new technology (Lancaster et al, 2002).
As mentioned above, the growing concern for global environment has forced governments to introduce regulations requiring the companies to reduce use of raw material, energy consumption and omission in manufacturing products.
Moreover, the change in attitude of consumers towards for environment friendly products affecting the way company manufactures its products. Hence it is important that the company develops and manufactures products that reflects the consumers’ environmental concerns and meets government regulations.
There are also a range of external legal factors that might affect Sharp operations. These include the introduction of laws and regulations related to the design and manufacturing of technology products by countries where Sharp operates, as well as any licensing regulations in the industry. Moreover, the effectiveness of Sharp operations is also subject to customs and trade regulations of individual markets where the company operates.
- Kotler P. and Keller K.L, 2009, Marketing Management (13th edn). Pearson Education International, Prentice Hall
- Lancaster G., Massingham L. And Ashford R, 2002, “Essentials of Marketing”, McGraw-Hill
- Mintzberg H., Quinn J. and Ghoshal S, 2002, “The Strategy Process” (European edition) Prentice Hall, London
- Johnson. G, Scholes. K and Whittington. R, 2006, “Exploring corporate strategy”, Prentice hall, UK, Seventh Edition