Peslte Analysis of Gujarat Essay

PESTLE analysis is the analysis of macro external environment in which business is operates. These factors which are beyond the control of business however are the important to be aware of when doing product development, business or strategy planning. PESTLE means: P- Political E- Economical S- Social T- Technological L- Legal E-Environmental The PESTLE subject should be a clear definition of the market being addressed, these are the followings:- * A company looking at its market * A product looking at its market * A brand relation to its market * A local business unit or function in business * A strategic option , such as entering a new market * Political acquisition * Investment opportunity (1)POLITICAL: – It refers to government policy such as degree of intervention in the economy what goods & services do a government provide? What are the priorities in terms of business support? Political decision can impact on many vital areas for business such as education of workforce, health and quality of infrastructure. In Gujarat BJP rules since 18 years, and communist party is INC. the major factors effect of political environment. (1) Taxation policy (2) Privatization (3) De-regulation (4) Government policy (5) International policy (2)ECONOMICAL: – It includes rates, taxation changes, economic growth & exchange rates. Economic change can have major effect on firm’s behavior. For example: * Higher interest rate may deter the investment * A strong currency may make exporting more difference because it may raise the price in terms of foreign currency. * Inflation may make higher wage demands from employees and raise cost. * Higher nation income growth may boost demand for firm’s product. For its improvement the government has made some improvements: * The government investment reduced the number of industries under compulsory licensing system * Disinvestment was carried out in case of many public sector and industrial enterprises * Policy towards foreign capital was liberalized * Automatic permission is now granted for technological agreements with foreign companies. * Foreign investment promotion board (FIPB) was set up to promote and for boosting up foreign investment in Gujarat. (3)SOCIAL:-Changes in social trends are input on demand for firm’s product & the availability & willingness if individual to work. 0-14 years 32%, 15-64 years 63%, 65 years and above 5%. There has * Mobility * Income distribution * Population demographics * Attitude to work * Standard of education and skills * Working atmosphere (4)TECHNOLOGICAL:- technology can reduce the cost, improve the quality & lead to innovation. This development can affect consumers as well as state’s growth. We can see these growth in Gujarat because recently there is good IT atmosphere is develop in the Gujarat, big automobiles company like TATA, FORD and MARUTI. In the electrical sector Gujarat is also ahead than others,because giants like ABB, SIEMENS and BOMBARDIER are already grown their work in Gujarat. (5)LEGAL:- It is realted to legal environment in which firms are operated. Legal changes can affect a firm’s cost & demand, so there will be an increase in the minimum wages & greater requirement for firms to recycle are the examples of relatively recent law that effect an organization actions. It consist of legislation that is passed by the government &state legislatures, so in Gujarat the industries should have take many types of permission from state and central government also. Some examples are * Employment law * Trade &product restriction * Health & safety regulation (6)ENVIROMENTAL: – Environmental factors include weather &climate change, it can be impact on many industries like farming, tourism & insurance. Industrialization &urbanization have resulted in pro-fund deterioration of world’s air qualities gives many pre-matured deaths in the world, so there will be needed permission to be granted from government of Gujarat. Each industry has to take permission for * Approximate Pollution * Planning of industry * Noise * Wastage It includes rates, taxation changes, economic growth & exchange rates. Economic change can have major effect on firm’s behavior. For example: * Higher interest rate may deter the investment * A strong currency may make exporting more difference because it may raise the price in terms of foreign currency. * Inflation may make higher wage demands from employees and raise cost. * Higher nation income growth may boost demand for firm’s product. For its improvement the government has made some improvements: * The government investment reduced the number of industries under compulsory licensing system * Disinvestment was carried out in case of many public sector and industrial enterprises * Policy towards foreign capital was liberalized * Automatic permission is now granted for technological agreements with foreign companies. * Foreign investment promotion board (FIPB) was set up to promote and for boosting up foreign investment in Gujarat.