In the legal field, it is about how the courts influence commercial activities. Examples of important legal factors include labour laws, health and safety regulations, discrimination laws, and antitrust laws (Figure 3.11 “Legal Factors”). The Technology segment focuses on improving the products and services provided by science. Relevant factors include changes in the rate of new product development, increasing automation, and advances in the service sector (Chart 3.8 “Technology Factors”). An essential feature of modernity is the ever-increasing pace of technological innovation. In 1965, Intel co-founder Gordon E. Moore proposed an idea known as Moore`s Law. Moore`s Law states that the performance of microcircuit technology doubles approximately every two years. This law has been very specific in the decades since its offering. The study of the general environment involves an understanding of key factors and trends in society at large. PESTEL analysis is a popular framework for organizing and isolating these factors and trends as they affect the industries and businesses they contain.
Below we describe each of the six dimensions associated with the PESTEL analysis: political, economic, social, technological, environmental and legal. While the impact of the tech segment on tech companies such as Panasonic and Apple is obvious, tech trends and events also help shape low-tech companies. In 2009, Subway launched a service called Subway Now. This service allows customers to place their orders in advance via SMS and avoid queues in store. With this service, Subway also addresses a trend in the social segment of the general environment: the need to save time in today`s fast-paced society. Intellectual property rights are a particularly daunting aspect of the legal segment for many organizations. When a studio like Pixar produces a movie, a software company like Adobe reworks a program, or a video game company like Activision develops a new game, those companies create intellectual property. These companies try to make a profit by selling copies of their movies, programs and games to individuals. Intellectual property piracy – a process by which illegal copies are made and sold by others – poses a serious threat to these profits. Law enforcement agencies and courts in many countries, including the United States, provide organizations with the necessary legal mechanisms to protect their intellectual property from piracy. Proposals to support businesses are often presented in political campaigns.
Meanwhile, farmers argue that tightening immigration policies would be harmful, as farmers rely heavily on cheap labor provided by illegal immigrants. In particular, if farmers were forced to employ only legal labour, this would significantly increase the cost of vegetables. Restaurant chains like Subway would then pay higher prices for lettuce, tomatoes and other perishables. Subway would then have to decide whether to cover these costs or pass them on to customers by charging submarines more. Overall, any change in immigration policy will impact hospitals, farmers, restaurants, and many other organizations. The study of political, economic, social, technological, environmental and legal factors and their impact on an organization. In other countries, such as China, IP piracy is widespread. Three other general environmental segments contribute to making piracy a major problem.
First, China is the most populous country in the world in terms of social segment. Second, in terms of economic segment, China`s prosperity is growing rapidly. Third, in the technology segment, rapid advances in computers and communications have facilitated hacking over time. Taken together, these various general environmental trends make piracy a major source of fear for companies that rely on intellectual property to make profits. An organization`s environment includes factors that it can easily influence, as well as factors that are largely beyond its control. The latter group of factors would exist in the general environment. Because the general environment often has a significant impact on a company`s success, leaders need to track trends and events as they evolve and try to anticipate the impact of those trends and events. Like many companies, bottled water producers have benefited from the general environment, but are also threatened by it. According to some estimates, 80% of plastic bottles end up in landfills. This has led some socially conscious consumers to be hostile to bottled water. Meanwhile, water filtration systems offered by Brita and other companies are a cheaper way to get clean, tasty water. Such systems are also very attractive to people who, due to economic conditions, feel the need to reduce their personal expenses.
In summary, bottled water producers have been offered opportunities by the environmental segment of the general environment (in particular, the spreading of water in bad taste to combat pollution), but they are threatened by the social segment (the social conscience of some consumers) and the economic segment (the financial concerns of other consumers). The part of the general environment in which governments are involved. A generation ago, ketchup was an essential part of every American pantry and salsa was a relatively unknown product.
