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PESTLE Analysis of

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by

Seng Chee

on 7 January 2014

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Transcript of PESTLE Analysis of

PESTLE Analysis of Mass Media
Strategy Financial Management

Political Factor:

The Effect:
Show to the public lack of government support.
Means:
That Euro Disney will need to find a way to gain government support.
Recommend:
Working with government
FR
AN
CE

Government

French President , Fancois Mitterrand, did not show up for the opening ceremony.
Hong Kong's Disneyland guests spent on average 1-2 nightly stays at hotel and
did not spend as much per capita
compared to the other Disneyland.
The Effect:
Lower than expected sales figures.
Means:
Disney must find a way to prompt customers to vacation longer.
Recommend:
1) package-deals (buy 2 nights/1 free) 2) Loyalty cards (eg: Spend X amount, gain Y)
Economic Factors:
Demand
Economic Factors:
Business cycles
Real estate value
declines
The Effect:
Land prices and rents drop
Means:
Real estate's profitability decrease
Recommend:

Hold on estate development until the normal rent and land prices are restored
PESTLE
This is a simple and effective tool used in situation analysis to identify the key external factors that might affect an organization.
Disney
did not serve alcohol
during opening years. Failed to recognize that alcohol is viewed as a regular beverage with meals and a part of daily life.
The Effect:
Customers felt neglected to a country wide tradition that is very important to the French.
Means:
Irritated and unhappy guests. Bad reviews and lower return guest rates.
Recommend:
Controlled servings of alcohol in designated dining areas.
Socio-cultural:
Lifestyles
Economic Factors:

Employment levels / Disposable incomes
European economies went into
decline
Legal Factor:

Some European labour unions such as France, and Spain mounted protests against the appearance code, which they saw as
“an attack on individual liberty.”
The Effect:
Can be viewed by the public as an oppressive corporation denying free personal liberties.
Means:
The individualistic French people will choose not to support Euro Disney and loss of employees.
Recommend:
Adapting and dealing with courts and employees on how to come to a happy medium.
Environmental Factor:

Consumerism
Intellectuals denounced what they considered to be the
cultural imperialism of Disney
and felt it would encourage in the country an
unhealthy American type of consumerism.
The Effect:
This stayed with Disney even in the media for many years.
Recommend:
Employing a marketing technique and creating external mantra or slogan.
Means:
The population can gain a feeling of being deceived. Causes loses with in customer market %.
Opportunities

or
Threats
?
There are many factors changing in the external environment but not all of them are affecting or might affect an organization.
1st step: Gathering information
2nd Step:
Evaluate and identify
which PESTLE factors the opportunities or threats for the company
3rd Step:
Exploit the opportunities
or
defend the threats
better than competitors
The Effect:
Loss of jobs and less consumer spending.
Means:
Less visitors.
Recommend:
Getting involved with local programs and schools. Sell at cheaper price even close to breakeven point.
Political
factors
Government policies
Government term and change
Trading policies
Wars, terrorism and conflicts
Inter-country relationship
Current and future legislation
Election and political trends
Economic
factors
Economy trends
Seasonality / weather issues
Industry growth
International exchange rate
Taxation / Interest / Inflation
Import / export ratio
Social
factors
Demographics
Lifestyle trend
Consumer attitude and opinion
Consumer buying pattern
Advertising and publicity
Work ethic
Media view on industry
Technological
factors
Maturity of technology
Technology legislation
Information and communications
Competitor technology development
Consumer buying mechanism / tech
Research and innovation
Intellectual property
Legal
factors
Current / future legislation
International legislation
Employment law
Consumer protection
Industry-specific legislation
Health and safety regulation
Tax regulation
Environmental
factors
Ecological regulations
Environmental regulations
Impact of adverse weather
Air and water pollution
Recycling
Waste management
Political factors relates to the pressures and opportunities brought by political institutions and to what degree the government policies impact the business.
Economic factors relates to economic policies, economic structures and to what degree the economy impacts the business.
Social factors relates to the cultural aspects, attitudes, beliefs, that will affect the demand for a company's products and how the business operates.
Technological factors relates to the technological aspects, innovations, barriers and incentives, and to what degree these impact the business.
Legal factors relates to the laws, regulation and legislation that will affect the way the business operates.
Environmental factors relates to the ecological and environmental aspects that will affect the demand for a company's products and how that business operates.
It is useful in business and strategic planning, marketing planning, organizational change, business and product development and research reports.

Socio-cultural:
Language

The Effect:

Number of guests is bound to dwindle as Japan's population declines
Means:
Disney will suffer of revenue decrease due to lesser visitors.
Recommend:

Persuade regulars to visit more often or win over a new customer base
Socio-cultural:

Demographic
Tokyo Disneyland, which generated $3.2 billion last year, have about 25.8 million annual visitors.
More than
96%
of them
from Japan
, about
84%
of visitor are
39 years old

and younger
.
Japan has the world 's fastest-aging population.By
2055
,
40%
of the population will be
older than 65
.
With Disney characters offering greetings in Japanese and employees speaking only Japanese, many of the attractions at the Tokyo Disney Resort are lost, without translation, to non-Japanese speakers.
Means:
The problem is the language, many foreign tourist had been frustrated by the language barrier at the resort.
The Effect:

Tokyo Disney Resort faces declining visitor base
Recommend:
Provide language training to employees


At that rate,
one million Hongkongers are classed as poor
, even after factoring in welfare payments.
In household income per capita terms, that's roughly
HK$3,600
a month.
In a sense, 1/4 of Hong Kong people are earned less and received a had
less disposable income
to spend.
In the mass media industry,
economic, and social factors
play a
key role
in shaping its business activities and priorities.
Economic factors influence its
spending decisions
, social factors shape the
image and media view
for the company.
However, PESTLE may be
more useful
when used alongside a SWOT, Porter's five forces and competitor analysis.
The resulting
higher unemployment
means people have less money to spend, thus contributing to the
downturn in the economy
.
During economic recession,
demand is low
and markets shrink.
Business tend to
reduce costs
, which can lead to unemployment increased.
The Effect:

Loss of jobs and less consumer spending.
Means:

Less visitors.
Recommend:

Getting involved with local programs and schools. Sell at cheaper price even close to breakeven point.
The effect:
Falling birth rates can be considered a challenge to future economic growth
Means:
Threat to businesses, Disney potential clients is children, younger customers base.
Recommend:
Expand market by targeting on teens and adults. (Acquisition of Marvel is a good move)
Social-cultural:
Fertility rate

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