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Dive into competitiveness data and take into account the dynamics of your venture's financial, technological and market performance with our PEST Analysis framework deck. Examine political, economic, social, technological, environmental and legal factors that might influence your business and never be caught off guard.

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PEST analysis is a strategic tool used to evaluate the external macro-environmental factors that affect an organization. It stands for Political, Economic, Social, and Technological factors.

Political factors include government regulations, legal issues, and 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 cultural aspects, health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions.

By understanding these four aspects, businesses can gain insight into the forces of change in their business environment and adjust their strategies accordingly.

PESTLE analysis is a tool used to understand the macro environmental factors that affect an organization. Here's a brief PESTLE analysis for Xylem Australia:

Political: Australia has a stable political environment which is conducive for businesses. However, changes in regulations related to water management and environmental protection could impact Xylem.

Economic: Australia's economy is resilient and diverse. However, economic downturns can reduce demand for Xylem's products and services.

Social: Increasing awareness about water conservation in Australia could increase demand for Xylem's water management solutions.

Technological: Technological advancements in water management and treatment technologies can provide growth opportunities for Xylem.

Environmental: Australia's focus on sustainable development and water conservation presents opportunities for Xylem. However, environmental disasters like droughts or floods could disrupt operations.

Legal: Compliance with Australian and international laws related to water management, environmental protection, and labor rights is crucial for Xylem.

Remember, this is a brief analysis and each factor should be explored in depth for a comprehensive understanding.

Xylem Inc. is a leading water technology company committed to "solving water" by creating innovative and smart technology solutions to meet the world's water, wastewater, and energy needs. In a world with ever-increasing water scarcity challenges, Xylem's products and services are addressing critical water issues such as the efficient transport, treatment, test, and efficient use of water.

In Australia, Xylem's presence is significant. They offer a comprehensive range of products and services that cater to various sectors including public utilities, residential, commercial, agricultural and industrial sectors. They have been instrumental in providing solutions for water and wastewater treatment, water supply and distribution, and flood control.

The Australian water industry is highly regulated and is subject to stringent environmental and quality standards. This presents both challenges and opportunities for Xylem. On one hand, it necessitates continuous research and development to comply with the regulations. On the other hand, it provides opportunities for Xylem to showcase its expertise in providing high-quality, efficient, and sustainable solutions.

The future of Xylem in Australia looks promising, with increasing investments in water infrastructure and growing awareness about water conservation. However, they must continue to innovate and adapt to the changing market dynamics and regulatory environment.

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Slide highlights

Use this slide to stress the importance of PEST Analysis. Many outside factors can affect operations and marketing of a company, so knowing in advance what kind of a change is coming, will help to make better decisions.

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With this slide, communicate any statistics and quantitative data associated with your findings in relation to each of the factors: political, economic, social, technological, environmental and legal that might bring opportunities or pose threats.

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"Mind mapping" is a useful tool for conducting the PEST Analysis. This technique allows you to capture large amounts of data without drowning in it. Use this slide to demonstrate your "Mind Map" and provide a complete picture view.

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Overview

PEST analysis, sometimes also referred to as PESTLE or PESTEL Analysis, is a tool used by businesses to monitor the environment they're operating in or to track processes before launching a new project, product or service. Each letter in the original framework name, "PESTLE," stands for a factor that might influence the organization's operation. Thus, "P" stands for "political," "E" stands for "economic," "S" stands for "social," "T" stands for "technology," "L" stands for "legal" and another "E" stands for "environmental" factors.

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Application

Pestanalysis.com lists the following very basic steps for conducting PEST analysis:

  1. Start with the history – familiarize yourself with your topic: read about its history, find out how it was established, how long it's been around and who was it founded by. Also, pay attention to major achievements associated with the topic that happened over the past few years
  2. Find political information – common political regulations to search for are tariffs, employment laws, health and safety, tax policies and trade control.
  3. Find economic information – some economic issues to pay attention to are taxes, Interest rates, demand and supply and recessions.
  4. Find social information – here, you'd examine how consumers are affected by political and economic factors. It is acceptable to draw conclusions based on the information you've already gathered from your political and economic factors research.
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Case study

Apple

Pestanalysis.com has conducted an extensive study of how political, economic, technical, environmental and social factors affect one of the world's most renowned consumer electronics brands – Apple.

Here is what to take away from their research:

Possible Impact of Political Factors

  • Apple is a leading American technology company that has collected a large amount of cash. As of June 30, 2015, the company had $34.7 billion in the bank. This means higher corporate taxation in the United States, where income inequality has become a major political issue.
  • Apple is heavily dependent on low-cost manufacturing in China. The risk here is that social and political unrest in China may negatively affect manufacturing or increase manufacturing costs for Apple. There has also been a discussion about limiting Chinese imports in the U.S. in an effort to support native manufacturing.
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Possible Impact of Economic Factors

  • Changes in labor costs in China could have an effect on the cost advantage of some Apple products.
  • Decreased middle-class incomes in some developed countries, including the United States, could lessen the potential market for luxury consumer goods.

Possible Impact of Social Factors

  • The largest growth in consumer spending power in the near future will be occurring in developing countries, such as Africa, where the population is not very familiar with Apple goods.
  • Many ethical concerns about Apple's manufacturing in China were raised in the last few years, which could limit the company's products' appeal among sustainability-oriented consumers (such as Millenials and Gen Z).
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Possible Impact of Tech Factors

  • Apple's biggest rivals, Google and Samsung, have shown a strong capability to copy Apple's products and services.

Possible Impact of Environmental Factors

  • The biggest environmental issue Apple may face is the recycling of used or broken devices.
  • Pollution and other environmental issues from manufacturing facilities in China are another growing concern, which has the potential to lead to increased regulation and higher manufacturing costs for Apple.

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