W.W. Grainger PESTEL Analysis
PESTEL is a strategic analytical tool used to analyse external factors affecting organizations. The acronym stands for political, economic, social, technological, environmental and legal factors. W.W. Grainger PESTEL analysis comprises the analysis of potential impact of these factors on profitability and long-term growth prospects of the global industrial supply company.
Political Factors in W.W. Grainger PESTEL Analysis
There is a wide range of political factors that can affect Grainger directly, as well as, indirectly. For example, government stability in international markets is one of the key political factors that can impact the performance of Grainger. Specifically, the global industrial supply company may face difficulties to grow the business in countries where there is a lack of government stability. Furthermore, if any government where company operates faces stability issues due to strikes, war or any other reasons, this can impose risks to Grainger properties located in the country.
Activities of trade unions can be mentioned as another type of political factor that can affect the bottom line for the B2B distributor. Trade unions can demand and achieve higher wages for Grainger employees with negative implications on profitability of the business. Additional range of external political factors for Grainger includes level of bureaucracy and corruption, the extent of freedom of press, government trade controls and others.
Economic Factors in W.W. Grainger PESTEL Analysis
Grainger profitability and growth prospects are subject to a range of external economic factors. Changes in currency exchange rate is one of the main economic factors for the industrial supply company, because in 2019 the company generated 28% of its total revenues from international markets outside of its home market US.[1] Inflation rate can be highlighted as another significant economic factor for the worldwide distributor of industrial products, as increasing level of inflation erodes buyer purchasing power with detrimental impact on the volume of revenues.
Moreover, growth prospects of the global industrial supply company are also affected by changes in interest rates. Grainger has a high level of indebtness of USD 2,4 billion as of December 31, 2019. Accordingly, if interest rates increase, the financial position of the B2B distributor will deteriorate. Furthermore, other economic factors that can impact the industrial supply company include tax rates, unemployment rates, cost of labour, monetary and fiscal policies of governments and others.
W.W. Grainger Report contains a full version of W.W. Grainger PESTEL analysis. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on W.W. Grainger. Moreover, the report contains analyses of W.W. Grainger business strategy, leadership, organizational structure and organizational culture. The report also comprises discussions of W.W. Grainger marketing strategy, ecosystem and addresses issues of corporate social responsibility.
[1] Fact Book 2019 (2020) W.W. Grainger