PESTLE Analysis

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Background

Netflix is one of the world’s leading subscription‑based streaming services, operating in over 190 countries. Its business model relies on digital content distribution, original productions, and subscription revenue.

PESTLE Analysis

Political

Government regulations on media content vary across countries.

Data protection laws such as GDPR affect user data handling.

Trade restrictions can impact international content distribution.

Economic

Subscription revenue depends on consumer spending.

Currency fluctuations affect global earnings.

Rising production costs for original content.

Social

Growing preference for on‑demand entertainment.

Cultural differences require localised content.

Screen‑time concerns may influence user behaviour.

Technological

High‑speed internet availability drives streaming adoption.

AI‑driven recommendations enhance user experience.

Cybersecurity threats require constant innovation.

Legal

Copyright and licensing laws affect content availability.

Consumer protection regulations govern subscription terms.

Antitrust scrutiny in competitive markets.

Environmental

Energy consumption of data centres raises sustainability concerns.

Pressure to adopt greener operations.

E‑waste concerns linked to device usage.

Discussion Questions

Which PESTLE factor currently poses the biggest challenge for Netflix?

How can Netflix use technological advancements to strengthen its competitive edge?

What political or legal risks could affect Netflix’s expansion strategy?

Background

IKEA is a multinational furniture retailer known for affordable, flat‑pack furniture and a strong focus on sustainability. It operates in more than 60 countries with a mix of physical stores and online sales.

PESTLE Analysis

Political

Import/export regulations affect raw material sourcing.

Labour laws influence global operations.

Government sustainability policies shape product design.

Economic

Inflation and rising material costs impact pricing.

Economic downturns reduce consumer spending on furniture.

Global supply chain disruptions affect inventory levels.

Social

Growing demand for sustainable products.

Urbanisation trends increase demand for compact furniture.

Changing lifestyle patterns influence product design.

Technological

Automation in manufacturing improves efficiency.

E‑commerce growth expands customer reach.

Digital design tools enhance customer experience.

Legal

Product safety regulations require strict compliance.

Environmental laws affect materials and packaging.

Consumer rights legislation impacts return policies.

Environmental

Sustainable sourcing requirements.

Carbon footprint reduction targets.

Waste management regulations for packaging and materials.

Discussion Questions

Which environmental pressures are most likely to reshape IKEA’s strategy?

How can IKEA use technology to improve customer experience and efficiency?

What economic risks should IKEA prepare for in the next decade?

1. Assignment Overview

In this assignment, you will conduct a comprehensive PESTLE Analysis on a real organisation. This task helps you understand how external macro‑environmental factors influence business decisions, risks, and long‑term strategy.

2. Learning Objectives

By completing this assignment, you will be able to:

Identify and evaluate political, economic, social, technological, legal, and environmental factors.

Analyse how external forces shape business opportunities and threats.

Apply PESTLE insights to strategic recommendations.

Present findings in a structured, professional format.

3. Assignment Tasks

A. Company Selection & Background

Choose one organisation (local, national, or global). Provide a concise background including:

Industry and market position.

Products or services offered.

Target customers.

Recent developments or challenges.

B. Full PESTLE Analysis

Create a detailed PESTLE analysis with at least three factors in each category.

Political - Government policies, regulations, trade rules affecting the business.

Economic - Inflation, interest rates, consumer spending, economic cycles.

Social - Demographics, cultural trends, lifestyle changes.

Technological - Innovation, automation, digital trends.

Legal - Compliance, labour laws, consumer protection.

Environmental - Sustainability, climate impact, resource use.

C. Deep‑Dive Analysis

Select one key factor from each PESTLE category and explain:

Why it is strategically important?

How it influences the organisation’s performance or decisions?

Evidence, examples, or data supporting your analysis.

D. Strategic Recommendations

Based on your PESTLE findings, propose three strategic actions the company should take. Each recommendation should clearly link to one or more macro‑environmental factors.

Examples include:

Entering new markets.

Adjusting pricing strategies.

Investing in technology.

Improving sustainability practices.

E. Reflection

Write a short reflection (150–200 words) discussing:

What you learned about external environment analysis?

How PESTLE supports strategic planning?

Limitations of PESTLE as a standalone tool.