Pestle Analysis Examples of 5 Multinational Companies
Provide pestle analysis example of 5 different multinational companies.
We are providing here some pestle analysis example conducted in 5 different multinational companies. These examples of PESTLE analysis can be utilized to get better marks in your university examination.
We have enlisted the companies which are being covered in this article.
Adidas is a Germany based multinational company which supplies sport’s apparels and shoes. The company was named after its founder Adolf Hassler. Adidas is currently a giant in the sports apparel market and doing well tackling all the challenges in the economy. Below we have conducted the pestle analysis of Adidas to evaluate the external factors which are affecting the performance of the company. You can get a brief idea of pestle analysis by referring to the info graphics provided below.
1.1. Political Factor
After each election conducted all across the world the taxation system of the particular country also changes. Elections always open a chance of uncertainty for the company.
Being a multinational company, the company had to face the wrath of the change in political policies of different company. Adidas Company even faced many uncertainties and risks due to civil unrest.
Some major political factors like national movements, war, economic sanctions, terrorism, fiscal policies etc. have the ability to hinder the smooth flow of the company’s working.
1.2. Economic Factor
The market fluctuations and the instability in the global market have affected the rate of progression and advancement of the company.
The Adidas Company had to face many failures and difficulties in its economy till the year 2005. The economic parameters and variables like taxation, inflation, unemployment and the per capita income had really affected the profit generating capacity of the company.
The company’s performance was always been majorily dependant on the purchasing power capacity of the customers.
1.3. Social Factor
The target customers of the Adidas company are the people who are health conscious and athletic. These factors will surely make great impact on the purchasing preferences of a customer.
The company is still not able to make an impact on Islamic countries. Since it is vast and dynamic market Adidas should frame a strategy to give a boost to its products while considering the Islamic culture in designing the shoes and other accessories.
Since the products and sports apparels of the company are up to date with the current trend disregarding cultural, age, sex and religion barriers customers from all aspects of the society use them.
1.4. Technological Factor
In order to achieve and progress on the path of success, multinational companies like Adidas should adopt most modern technologies.
Adidas uses the strategy of online marketing to reach the customers of various diaspora all over the world. This strategy has helped the company in increasing its customer spread all over the world.
Adidas invest much more than others in research and development which helps it make a distinct identity form its other competitors. This had always helped the company in maintaining its one step ahead posture of the company.
1.5. Environmental Factors
It is being claimed by the company follows the industrial process which is not at all harmful the nature and the ecology. None of Adidas units produce any products which are restricted.
Adidas company has a adopted modern technologies to check the emission of any sort of organic and volatile compounds which are harmful to the ecology. This attitude and approach of the company has helped the company to enhance the quality of product and the brand image.
1.6. Legal Factor
In the market Adidas holds a high reputation and brand value. Because of this the company is able to retain the trust of the customers at a global level.
Since the company is being operational in many countries, its management should be aware of the domestic laws, restrictions and various taxation methodologies followed in each country.
From this Pestle analysis it has been inferred that Adidas is a company which holds a great reputation in the global market and is doing exceptionally well in the market. The company management should focus on creating and setting a higher aim for the company. This will provide the company a motive to move forward and conquer further milestones.
Below we are going to depict and analyse the pestle analysis example of the Nike Company. It is a US based international company which provides a vast collection of footwear, fabrics, textiles, various modern design products all over the world.
When compared with other sports apparel producing companies, Nike is considered as the best brand all over the world. According to the company’s fiscal data of financial year 2015, it had achieved the profit level of US$ billion. This profit margin had made the Nike the most valuable and reputed sports brand all over the world.
We have a conducted a Pestle analysis of the company below to determine its current position in the market. We have provided a short info graphics to provide you an idea of, what are we going to discuss.
2.1. Political Factor
Since the Nike is operational at global level and have outlets in many countries, the management of the company should make it aware of export import policies and laws followed by each company. It will help the company in drafting strategies to boost the distribution of product all over the world.
The political incidents in global level and domestic level of a company will be of great significance to the company since it will create a huge impact on the target market of the Nike. As a virtue of it the company should grasp the taxation structures and manufacturing rules followed in the company.
2.2. Economic Factor
The faculties and the management of the Nike Company should observe the trends and variation in the company as it may affect the performance and output of the company.
The company should avoid risk by focussing more on volatile economies. It should make additional effort to concentrate in the stable economies like US, UK and other European countries. Since these countries have a stable economy, these countries possess demographics with a high purchasing power.
The nations with fast growing companies like India, Singapore, Japan can provide unlimited opportunities for the Nike.
2.3. Social Factor
The modern youth is very conscious of their health. Instead of opting for artificial steroids they prefer to take part in sports activities in order to keep their body fit. Nike can ensure a great role in this target the young population.
Nike is renowned for its high quality shoes and its apparels. The company focuses on designing the shoes according to the demand and current trend in the market in order to ensure the positive result among the customers.
2.4. Technological Factor
Although the company has always focussed on updating the company processes by adapting new technologies, it should watch and observe the technologies adopted its rival companies in the market.
Company should invest more in the research and development department by allocating some fund from its annual budget. By new innovations Nike can leave its competent companies way behind in the market.
2.5. Legal Factor
It is very important that Nike should copyright all its products and apparels since many of the companies are copying its style and filling the market with forged products.
The company should make it sure that none of its branches or manufacturing units are indulged in child labour and no any violation of employment rules are done.
In order to maintain the current reputation and goodwill Nike should follow international norms of health and safety.
2.6. Environmental Factor
In the current 21st century the conservation of ecosystems is of great significance and point of talk in the global platforms.
Since Nike is top brand in its own market and is a role model for other companies, it should provide and manufacture products which are environment friendly. This approach will help the company in enhancing its goodwill and brand value among the customers.
This section of the article will describe the pestle analysis example of Apple Company.
Apple is a very reputed company and brand in the global market. The company provides very quality electronic gadgets like PCs, smartphones, tablets, Music player and even Televisions which are very famous and extremely preferred by the consumers. Apple sells its products at a high retail price because of its high reputation and brand value in the market. Still the products of Apple are bought by large number of consumers because Apple brand is not limited to a utility, it is now a status of prestige and luxury.
Below is given the Pestle analysis of the company Apple Inc. The simple info-graphics provided below will help you in understanding the external affecting factors of the company.
3.1 Political Factor
The manufacturing charges and human resource are very cheap in China. Apple has noticed it and shifted most of its manufacturing unit in the sovereign boundary of China. This move had invited the strong criticism of the US government. There is a strong political rift between the governments of US and China. Even after this turmoil moving the manufacturing units to China has extremely benefited the Apple company.
Apple provides a mass contribution to the economy of the USA. Hence the company enjoys a very strong and dominant position in the political system of the USA.
3.2 Economic Factor
The major profit of Apple is generated because it is using the cheap manufacturing facility and Human Resources of China. If China will introduce any national policy or scheme regarding the wages of labour, the company will have to face a great setback.
The majority of the customers of the Apple Company are the middle class and high class people with high purchasing power. If there any decline in the income of middle class occur, the situation will adversely affect the sales of Apple gadgets.
The variation in the exchange rate of US dollar will affect the company’s revenue dynamically. If the US dollar performs well in the international market then the exchange rates will increase, thus company can receive heavy revenue from the abroad consumers located in China and Europe.
3.3 Social Factor
As we have discussed earlier, Apple is very famous and the most preferred brand among the world population. Even though, the gadgets of the company had failed to gather a customer community in places like Africa. Even in the USA people with low income refrain themselves from buying the gadgets of Apple since they are very costly.
Because of some ethical concerns of Chinese population they avoid buying the products of Apple. Since China is a large market, being disregarded from the market is a great setback to the company.
The management of the company should take strong steps to make people aware of the features provided in the Apple gadgets.
3.4 Technological Factor
Apple should copyright its innovations and products and take legal action against whoever tries to copy its technologies. The main competing companies like Samsung and Google have imitated many technologies and features from Apple and introduced in their own product and services. Many of the apps introduced in the apple store are copied and being introduced in the android platform.
There are many cheap alternative smartphones and tablets for costly gadgets of apple. Many of the companies are providing way more better variants with topmost technology in a much cheaper price. This has really decreased the demand of the Apple products. The management of the company should take immediate actions since it will decrease the market of its product in a tremendous way.
3.5 Legal Factor
Since the Apple is using a very advanced OS it is nearly impossible to obtain the overall data stored it in. This is being misused by criminals which is making a strong friction between the government and the company management.
Apple has recently started a secure and a very regulated payment service through Apple Pay. This is service is in the strict observance of the government. The chances are that the government will conduct a strict scrutiny on this matter.
It was all over the news and reports that Apple is planning on entering the Automobile market. This move may require the company to secure more insurance, pay more regulatory costs and alteration in the legal policies of the company.
3.6 Environmental Factor
The lithium batteries used in mobile phones are one of the significant contributors in the environment pollution. Eliminating the waste from lithium battery is a very daunting challenge for the company since the disposal of these lithium batteries are very expensive.
Recently China has shown a greater concern and a comprehensive approach towards the protection of the environment against pollution. The chinese government has now adopted a policy to reduce the carbon emission and hence decrease the greenhouse effect. Since most of the manufacturing units of Apple are operating in China, this move may result in revenue expenditure for the company.
The company is facing many challenges as we have discussed in the Pestle analysis of the Apple. But the company is possessing a dominant position in both political and economical field. So, it is strong enough to cover all of the challenges posed in the market.
Below we have given a pestle analysis example of Uber Company to understand the various challenges posed by the international companies in the market. Uber is a major international company which provides taxi service in majority of the countries. In recent years Uber has displayed a very rapid growth in the market against its rival companies. The features which highlight it and put aside from others is its easy availability and accessibility along with the feature of taxi sharing. There are a lot of controversies going through against Uber regarding the complications in minimum wage.
We have provided a simple infographics below to aid you in understanding the pestle analysis conducted below.
4.1 Political Factor
We have discussed above that the company is going through a lot of controversy and is trying to solve it. The major controversy against the Uber is that it has not delineated its regulations in specific and clear manner. There is a great ambiguity among the Uber users regarding its insurance policy. The main confusion is regarding the accidents happening if a customer is opting for a Uber ride. The main question about it is that, who will be held guilty if an accident happens, the driver or the company.
There have been a lot of issues going through around the world regarding Uber. The government of France has imposed sanctions on France for not following the norms in advertising. The officials of Netherland have taken action against the company since most of its drivers not having an authentic license. Since the Uber is not following the domestic laws of certain countries and several discrepancies prevail in the process of Uber many Asian companies are planning to ban the company. In most parts of the world Uber is under heavy scrutiny by the officials of the government.
4.2 Economic Factor
The economy in which the company operates is a sharing economy. In a sharing economy the transfer of intellectual and physical resources are done.
An Uber customer has easy access to the driver using its app. The main advantage by using the app is that you can change your destination and can go to any location in the map. The customers all around the world find it cheaper to travel by Uber rather than a private taxi.
In recent years, Uber has developed beyond the imagination of economic experts. this rapid growth has invited rivalries for the company. Many countries find it to be unfair since the spread of Uber is taking down the regular taxis. In some countries, this perception has created ban of the operation of the company.
Many similar countries are facing the risk of ban but many countries are now focussing on the Uber Company since it is the main giant in its respective field.
In many countries, the majority of the population seeking Uber for a new job opportunity. Even the economic experts are confused whether Uber is taking away or providing employment to the population.
The major factor favouring the Uber is its fame and popularity among the customers. The market for transportation and taxi is full of opportunities.
4.3 Social Factor
The applications provided by the Uber company are very easy to use and have the reputation of one of the most user friendly and accessible software.
The Uber is such easy that a customer has to just give the pickup and destination location to the driver. In a few minutes the driver will confirm and reach the destination of the customer to pick him up.
Most of the customers all around the world are very satisfied with the service provided by the Uber Company, since they are providing premium services at a very cheap rate.
4.4 Technological Factors
The company has invested and conducted research in upgrading its technology and is now reaping direct and indirect benefits from it.
The satisfied customers all around the world are sharing and posting their positive reviews about the Uber service which is helping the company in a very positive way.
The application used by Uber is very technically advanced one, which is able to estimate the charge of a trip, traffic conditions and factors affecting it like the current weather. The application also allows the payment of rides by non cash method.
4.5 Legal Factors
We have already discussed that the company is now facing many legal sanctions and barriers in many companies because of many unprecedented reasons. The company should be cautious in adapting the domestic laws in the field of technology, laws regarding labour and safety of the employees. This will make the management and heads of the company to be cautious and avoid further mishappenings in the future.
4.6 Environmental Factors
There are not much study conducted on the study of environmental impact created by the company. It has been speculated that because of Uber the traffic and the fuel consumption is increasing. It is being argued that the use of Uber is discouraging the use of public transport among the people. But there are no any authentic study validating this argument.
Uber is making its mark on the global market at a very fast pace. Its cheap service and user friendly application had made the company a very popular one in the global market. It has been noticed that Uber is facing many problems in the market, but the pace with which the company is growing indicates that it will overcome all the hurdles in the market.
5. Coca Cola
This is the last example of pestle analysis which is conducted for the company Coca Cola. Coca Cola is forerunner in the global market of soft drinks. A wide variety of beverage product is offered by the company which are widely accepted by the customers all over the world. By the use of most modern technologies and techniques Coca cola is now the largest company in the beverage market. Coca Cola always pay full heed to meet the expectations of the customers, which helped the company to be the most preferred and famous beverage company all over the world.
Below is given the detail Pestle analysis of the Coca Cola company. The concise infographics given below will provide you an idea of the analysis.
5.1 Political Factor
Since Coca Cola is world renowned brand it has a compulsion to provide bet products in its beverage outlets. Even though all the products of Coca Cola are checked by the FDA, it should also focus on following the domestic beverage laws of each country. It is a possibility that the products of the company will be banned in certain countries if it doesn’t follow the laws of certain companies.
Apart from this the management of the company should be aware of all the laws relating to import and export, domestic marketing, taxation norms, and labour laws.
5.2 Economic Factor
Over the time Coca Cola has been successful in maintaining an enormous loyal customer base in the global market. The company is now operating their products in outlets all over the world.
The company has strict norm of providing products which suits the palette of the targeted customer. The giant section of the company’s revenue comes from the sales of beverage product.
The young generation of the twenty first century are very conscious about their health and prefer drinking health drinking healthier drinks rather than soft drinks with high sugar content. Coca Cola has realized this trend and is now giving out products to suffice the palette of the younger generation.
5.3 Social Factor
The major consumption of the products of Coca Cola happens in the urban areas, hence somehow the urban population is preferring to consume Coca Cola product rather than the rural population. the company should take some actions to enhance the consumption of its product among the rural population too.
Various regions have different preferences and tastes. Coca cola has observed it and introduced many new products to satisfy the customers in different countries. As a move the company has introduced around 30 flavours in Japan and China.
In the case of the USA the company is more focused in delivering healthy diets, since the population of America is very cautious about its health. Coca Cola has introduced many healthy drinks in America which includes tea and bottled mineral water.
5.4 Technological Factor
In the current scenario Coca Cola can do further better by equipping itself with the advanced technologies and techniques. This will aid the company in mass production in less time to provide their products all over the world.
In the U.K, the company has devised technology so that only quality products reach in the hands of the customers. The similar technology should be implied everywhere.
Coca Cola has well utilized the social media to promote its product. It has conducted many campaigns in social media to promote its product.
5.5 Legal Factor
There are not many legal actions against the company all over the world. However the abrupt consumption of water resources by the company has raised the voices of local population in some places. Since the products of Coca Cola are all patented there is no risk of other companies copying it.
5.6 Environmental Factor
The consumption of water is the main problem company is dealing with. The over usage of water is depleting the water bodies and the underground water sources where the company plants are operating. This is leading to the degradation of ecosystems. The company should ensure that the consumption of water is done in a limited and scientific way.
It can be inferred that the Coca Cola company is a giant in the field of beverage companies. It should focus more on providing healthy drinks to the customers and limit the consumption of water. Pestle analysis assignments are being prepared by our online marketing assignment help experts from top universities which let us to provide you a reliable assignment help online service.