Pestel Analysis

PESTEL ANALYSIS - UNILEVER GLOBAL PESTEL PES TEL anal a nalysis ysis - UNILEVER  A scan of the external external macro macro environment environment in which which the firm firm operates operates can be expressed expressed in terms of following factors: 

Political

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Economical

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Social

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Technological PESTEL analysis is a useful strategic tool for understanding market growth or decline business position potential and direction for operations! The headings of PESTEL are a framework for reviewing a situation and can in addition to S"#T and Porter$s %ive %orces models be applied by companies to review a strategic directions including marketing proposition! The use of PESTEL analysis can be seen effective for business and strategi strategic c planning planning marketin marketing g planning planning busines business s and product product develop development ment and resea researc rch h report reports! s! PEST PESTEL EL also also ensu ensures res that that compa company ny$s $s perfor performan mance ce is align aligned ed positively with the powerful forces of change that are affecting business environment &Port &Porter er '()* '()*+! +! PEST PESTEL EL is usefu usefull when when a compa company ny decid decides es to enter enter its busin busines ess s operations into new markets and new countries! The use of PESTEL in this case helps to break free of unconscious assumptions and help to effectively adapt to the realities of the new environment!

Limitations of PEST analysis Political factors include government regulations regulations and legal issues and define both formal and informal rules under which the firm must operate! Economic factors affect the purchasing power of potential customers and the firm$s cost of capital! Social factors include the demographic and cultural aspects of the external macro environment! These factors affect customer$s needs and si,e of potential markets! Technological factors can

lower barriers to entry reduce minimum efficient production levels and influencing outsourcing decisions! -t may be difficult to forecast future trends with an acceptable level of accuracy! -n this regard the firm may turn to scenario planning techni.ues to deal with high levels of  uncertainty in important macro/environmental variables

 Political and legal analysis 0nilever is sub1ect to local regional and global rules laws and regulations! These rules and regulations cover diverse areas such as product safety product claims trademarks copyright patents employee health and safety the environment corporate governance listing and disclosure employment and taxes! -mportant regulatory bodies in respect of  business include the European 2ommission and the 0S %ood and 3rug Administration! %ailure to comply with laws and regulations could leave 0nilever open to civil and criminal legal challenge and may result in fines or imprisonment of personnel! %urther reputation could be significantly damaged by adverse publicity relating to such a breach of laws or regulations! 3uring 455(/45'5 almost 6(7 of 0nilever revenue came from 38E markets including 9ra,il -ndia -ndonesia Turkey South Africa 2hina exico and ;ussia! These markets typically proved more volatile than developed markets! Any government response to reduce the impact such as fiscal stimulus changes to taxation and measures to minimise unemployment have also affected 0nilever$s economic performance! -n some regions
Economic analysis 0nilever market environment is becoming highly competitive especially in the "estern Europe! acro economic environment is highly uncertain whcih has affected micro economic environment as well by creating a fear among ordinary consumers! 2onsumers

would not want to buy expensive product or brands due to current

economic tide! 2ompetition in E0 has grown so strong that 0nilever is facing difficulties in places like %rance >etherlands! Economic 3ecline in business during an economic downturn has resulted in customer  and supplier default! 0nilever$s business is dependent on continuing consumer demand for its brands! ;educed consumer wealth driven by adverse economic conditions has resulted in consumers becoming unwilling or unable to purchase 0nilever products which has adversely affected cash flow turnover profits and profit margins! Adverse economic conditions have resulted in the impairment of some of intangible assets which are in the form of brand names! Adverse economic conditions have affected in two ways i!e! one or more countries within a region or extended globally! =owever recession has increased the demand for some of the home care products! 0nilever is operating in different market which have reacted to recession in different ways! -n 38E markets volume led growth has been improved upto ?7 in the first .uarter of 45'5!

Societal and Ecological Analysis 0nilever has developed a strong corporate reputation over many years for its focus on social and environmental issues including promoting sustainable development and utilisation of renewable resources! -t is very conscious about safety and health of its employees and accident rate decreased by (7 during 455(! 0nilever$s vision is to help people feel good look good and get more out of life with brands and services that are good for them and good for others! -t has successfully maintained high social and environmental standards by designing and producing products that are safe for consumers! 0nilever is working on so many social welfare pro1ects like "orld food programme and safe drinking water! 0nilever is using environment friendly materials and packing stuff!The 0nilever brand logo now displayed on all products and advertising increases its external exposure! 0nilever has built its image as an environment friendly and socially responsible company

Technological Analysis

0nilever has been spending on -T to improve its business especially in the area of e/ business so as to improve brands image and .uality of its products! 0nilever know that failure to provide sufficient funding to develop new products lack of  technical capability in the ;83 function and .uickly roll out the products may adversely impact its cash flow turnover profit and profit margins and affect reputation! =igh level of automation is one of the critical success factors of 0nilever that differentiates then from their competitors and serves as a source of competitive advantage! Today 0nilever is trying to minimi,e cost through -T efficiencies at global level! -n addition 0nilever Technology @enture works in collaboration with 0nilever ;83 group to help 0nilever meet consumers$ needs! Area of concern is genomics advanced bioscience advanced materials science and nano technology!