In considering the macro-environment, the importance of analysing the factors that can have an effect or influence the demand and supply of an organisation must be put into application (Kotter and Schlesinger, 1991). According to Dr. Paul (2014) “A PEST/PESTEL 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 PESTEL factors are those components that make up the macro-environment. These factors include political, economic, social, technological, environmental and legal factors. According to Kotler (1998), PESTLE analysis is an effective vital tool that is used in understanding the markets increase or downturn, organisation position, …show more content…
They include growth rate, inflation, interest rate, labour costs and currency exchange. Product demand in a market, product price and profit that an organization makes is built upon economic factors. These economic factors cannot be controlled by organizations, but can display a negative reaction to the performance of an organisation. This factor can be seen in the Tesco Company, they are a company that is absolutely dependant on the UK market. Although they have stores located in various countries, when the UK market crashes or is damaged by an economic factor, they have a high risk of being affected (Articles world 2012). The below figure illustrate Tesco stores and revenue per …show more content…
It is the attempt of an organisation to abide by the law of a country such as regional laws, law enforcement, employment law, court system and competitive regulation. Organisations regularly discover that the legal factors are linked to political factors for the reason that a larger part of the law are been constituted by the government. Therefore, when involved in international sales, as an organisation or company, international laws must be put into consideration. This can be sighted in Amazon where few items have independent laws in state, depending on where it is being consigned to. In detail, some countries do not allow the importation of certain alcohol or chemically produced goods which can be of a loss on Amazon. Furthermore, there are media rights that need to be achieved to be able to sell certain multimedia over the net. This is for the reason that Hollywood is battling the trade of digital duplicate by cause of the ease in creating copies that can result in the difficulty of achieving these rights (Google n.d). The below figure shows the sale of digital music compared to