How Political Factors Affect P & G’s Business
The political factors involve the governmental policies and institutions that affect the working environment and operations of the business. The impact of these policies or regulations on the remote working environment of the company. The subsequent political forces are influencing business performance and efficiency:
- The inception of e-commerce business by governments (opportunity & threat)
- Globalization and support by the governments (opportunity)
- Government effort for Higher energy competence
The increase in e-commerce is rising day by day. Governments around the globe are supporting these trends as they benefit in numerous ways. These novel trends have the capacity to bring more competition than ever in business. On the other hand, it creates many opportunities for the company to expand its business operations around the globe. In this way, the firm has an absolute opportunity to expand its business around the globe mainly in developing markets. Procter & Gamble has another opportunity when it comes to energy efficiency. All the governments and institutions support high energy efficient companies just like P & G. The company can further benefit itself from the policies related to energy-saving and can also benefit from the subsidies for this quest. Therefore, the company can greatly benefit from these opportunities given by governmental policies.
Economic Factors Affecting the Company
This segment of the analysis gives an overview of the economic conditions prevalent in the business of the company. These conditions while penetrating the remote working environment of the company exert their effect on the growth and development of the company. The ensuing factors are relevant to the external working environment of the company:
- Rapidly growing markets of developing nations (opportunity)
- Refining disposable income growth (opportunity)
- Stable markets in the developed countries (opportunity)
The first opportunity refers to those markets which are improving and growing day by day. These markets give a great opportunity to the company for growth and revenue as these markets are relatively less exploited. Examples include markets of Asia, the Middle East, Africa, and Latin America. The improved levels of disposable income can lead to an increase in the company’s revenue. The main reason for this is the increased capacity of the customers to spend and purchase. Furthermore, the stable market of developed countries intends to give a stable and prolonged revenue to the company. These are the growth opportunities available to P & G’s end.
Sociocultural Factors Impacting Business
The primary considerations in this analysis are the behavior of customers as well as workers related to the company’s products and services. The business opportunities besides prevalent threats are discussed in detail in this segment of Pestle Analysis. The succeeding factors are prevalent in the socio-cultural context and the external factors affecting the business:
- Customer’s preference for quality products (opportunity)
- Prioritize healthful products by consumers (opportunity)
- Decreased rate of Population Growth in developed States (threats)
The globalized world is becoming aware of the availability of enhanced quality products. This situation has created an opportunity for the company to increase its quality and revenues. Furthermore, customers have prioritized health-efficient products above everything. The company can increase its growth in revenue as well as its market reputation by enhancing the quality of its products and by optimizing the health benefits of its products. On the contrary, the shrinking population of many developed nations is a threat to the growth of the company. The company’s business penetration can be affected by the decreased population of developed nations. Thereby, the growth opportunities along with the threat are prevalent in social factors present in Pestle Analysis.
Technological Factors Prevalent in The Company’s Business
The industrial sector these days has greatly dependent on technology to enhance its services and products as well as to improve business operations. These tech-oriented products have the ability to catch customers’ attention. These impacts and factors are covered in this segment of the analysis. The ensuing factors are relevant to the business of P & G’s external environment.
- Rapidly developing E-markets (opportunity)
- Automated business (opportunity)
- Efficiency in fuel consumption of transportation (opportunity)
The company has a breakthrough chance to increase its sales and revenues by capturing the online markets. These markets offer a chance to expand the company’s operations even to the remote areas where the company does not have stores. Moreover, business automation is a tool available at the manager’s end to enhance productivity and efficiency and reduce product costs. Furthermore, the firm has another benefit due to the improvement in technology. Improved fuel efficiency has the potential to reduce the cost of the product by reducing the cost in the supply chain as well as in distributing the goods to buyers. Therefore, the firm can benefit from the above-discussed technological factors prevalent in the external environment of the company.
Legal Factors
The policies and regulations have a significant effect on the working of businesses. No business or corporation can afford to ignore the prevalent governmental rules and procedures in order to run business smoothly and effectively. The subsequent factors are widespread in the business environment of the company:
- Must ensure the safety of the products (opportunity)
- Environmental Protection Policies (threats, opportunities)
- Growing sustainability policies (threats, opportunities)
The company can grow by ensuring the safety regulations of its products. Consumers are very conscious of the safety mechanisms and overall safety of the goods. The firm can ensure safety as well as high quality to attract more customers. However, the prevalent restrictive environmental protection policies are risky to the company as they could undermine the availability of many raw materials needed to produce goods. However, the company can strengthen its brand image and thereby sustainability and can earn the goodwill of its customers. Furthermore, the threats and risks involved in the restriction of the company’s activities can be proved fatal to the company. Therefore, it must continue to adopt sustainability activities. A wise and shrewd strategy is needed to cope with the threats presented here.
Environmental Or Ecological Factors Prevalent to Procter & Gamble
The natural environment can greatly affect the business of the company. This aspect has a great impact on the sustainability and long-term development of the company. This section of the Analysis discusses the ecological impacts and factors which are shaping the external working of the environment. The following factors need to be addressed by the company in a suitable manner.
- Resistance to the conversion of forests into oil palm fields (threat)
- Farming and the variations in climate and weather (threat)
- Recyclable materials and their easy access (opportunity)
The company has products that use palm oil as a raw material. The resistance to the growth of more palm fields is an absolute danger to the company. Therefore, the company needs to address this ecological factor. Moreover, the disruptive weather and dynamic climates are another threat as they can potentially harm farming. As the company uses several vegetable oils as a raw material in the production of soaps, detergents, and other products, effective policies are needed to be executed to preserve farming. In this way, the company can avoid any unnecessary delays or inconveniences in the supply/demand chain. In contrast, the company can enhance its brand image among the customers and can earn more customers and loyalty if P & G starts using environmental conservatism methods and techniques in their business. The use of recyclable materials can particularly benefit the company economically and the overall ecology of the globe. These environmental elements analyzed in this section require delicate policy to avoid future risks.
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