Impact Of Pestle Analysis On Globalisation

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Introduction
Globalisation is “a process by which national and regional economies, societies, and cultures have become integrated through the global network of trade, communication, immigration and transportation.” (Lexicon.ft.com, 2018) There are several key factors that companies must be aware of before deciding to do business in other countries. I will be discussing these key factors in terms of the PESTLE analysis in my report reflecting the implications for the practice of international business. “The PESTLE analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental factors that have an impact on an organisation. The result of which is used to identify threats and weaknesses which is used in a SWOT
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The two biggest economic factors impacting international businesses is demand and supply. “Demand is how willing and able a consumer is to purchase what a business offers. Whereas, supply is how able the business is to make available what the consumer needs.” (Marketing Tutor, 2018) A shift within these two factors will cause international businesses to react to meet the needs of their consumers.
When demand increases it must match supply by increasing production. Initially, that creates lower prices in the market because enough supply of products exists. However, when businesses reach their full production capacity and fail to meet the demand the supply decreases, causing prices to increase. (Smallbusiness.chron.com, 2018) This why it’s so important that demand meets supply. International businesses often select the country that has a high GDP because demand always tends to be higher which generates more
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Environmental factors which are also known as ‘ecological factors’ — refer to variables regarding the physical environment (such as the climate of Earth). Some examples include climate, climate change, weather, pollution and availability of non-renewable goods. (Bush, 2018) Businesses must be aware of environmental factors to ensure their practices are not causing environmental damage.
There are environmental regulations put in place so that international business minimises the impact they have on the environment and be sustainable. On the contrary, many developed countries have substantial regulations governing the emission of pollutants, the dumping of toxic chemicals, the use of toxic materials in the workplace etc. (Hill, 2011) Nevertheless, many developing countries lack these regulations, but business may find this more attractive as they wouldn’t be as restricted than in a developed country. Having said that, the more “green” a business is the better the brand image.

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