4th November - 11th November 2013, - PESTLE Analysis

Like Porter's Five forces, PESTLE is also a tool, the difference is that porter's tool help to look at the internal part of the organization, the micro-environment while PESTLE is used to look at the macro level, how the outside forces may effect an organization.

PESTLE STANDS FOR:

P: Political

E: Economic

S: Socio-Cultural

T: Technological

L: Legal
E: Environmental 

We cannot change the impact or influence of these factors on an organization, we can just evaluate or predict its effects and by doing that we can develop strategies that would counter the problems or the problems that could arise. Lets see how each of these factors would effect SAMSUNG (particularly smart phones).

Political factors are actually the government intervention in an economy, the tax rates, policies,trade restrictions, laws and also the political stability. An increase in taxes may want an organization to change its cost methods. Democratic Republic of Congo's political instability might affect Samsung as they are one of the major rare earth minerals provider as it is one of the important raw material for making smart phones. Also, a change in taxation policy for international businesses might affect Samsung too and Trade barriers too, such as you cannot trade from Saudi Arabia to Israel .

Economic factors are very important of a country, a country with high unemployment rate would buy lesser Samsung smart phones than a country who has a lesser unemployment rate, as more people are earning. Similar to this, is the inflation rate, if there is more inflation, the spending power of people would decrease, resulting in less spending on smart phones. 

Social factors include the cultural aspects, includes health conciousness, population growth, age distribution, career attitudes, etc. Strategies can be made and targets can be set, according to the culture, by questioning what is accepted and what is want or what is unaccepted and what is not? for example mini skirts would never sell in Saudi Arabia as their women are restricted to wear full clothes and not reveal skin. I believe more youngsters opt for smart phones than old aged people, so in a country where there is more old generation than young, might affect Samsung's sale.

Technological factors are very important for Samsung. Smart phones are all about technology, the latest innovation they come up and if they don't maintain their technological level, competitions might come up with better technology, such as APPLE and HTC, and take over their market share as they are offering something Samsung is not. so basically technological factors are innovations in technology that effects the industry. Check the pictures below to see the difference made in technological level in the last 20 years.

Legal in simple words mean law. The patents holded by Apples means, you cannot copyright their products, the technology they have come up with and how they have made their smart phone, so for samsung, they have to make their smartphone differently, also with different technology, else Apple can sue Samsung like they did in 2010 for copyright claims. So Legal in PESTLE means laws which might restrict a company or affect it, for instance, comsumer laws and health and safety laws.

Environmental factors means the influences and impacts of surroundings, such as weather or climate. These factors might impact alot on some industries, for example a frequently flooded area is always a disaster for farming industries. A natural disaster in one of the Samsung's producing hubs, might affect the whole of the Samsung smart phone industry.