Economic Factors

Economic Factors significantly impact business decisions & performance

Decisions – Why ?
- Invest, Divest, Exit, Expand
Ex: Budget20 Speech by Finance Minister- Economy, Growth projections.

Performance- Why ?
- Growth, Trend, variations
Ex: Helps to understand why a company sales are falling vis-à-vis competitor ?
Entrepreneur thinks -Is it about the market or my company
 So what does it include ?
• Economic Growth
• Inflation Rate
• Interest Rates
• Exchange Rates
• Taxes
• Demand Supply

The above are the broad topics and have an overlapping effect.
 How exactly?
• Exchange Rates: Exchange rates directly impact the cost of imports, our net cash
flow of receivable & payables.
- Another impact is seen on Stock prices with fluctuating Exchange rates
-As an entrepreneur I would like to invest in a country having pegged/stable
exchange rate
- Example: UAE to USA- Pegged for years now.
- Zimbabwe: Hyperinflation @ 175%

• Inflation Rates: Inflation rates in the economy, determine the cost of factor
prices and trade cycles.
• As an entrepreneur I will think- Do they have disposable income ? Will customers
come and spend money on my products ?
 A little more..
• Interest Rates
As an entrepreneur I will be worried about cost of financing my business.
A country where interest rates are high with strict regulations on foreign
fundings, the entrepreneur may not invest in that country.
Can I sustain my margins at growing interest rates ?

Example: RBI has reduced repo rate, making available more credit to boost
economic growth. Bank FD rates have gone down, financial companies will lend
more to increase your purchasing power – A push to economy like a pedal on cycle
 Almost there
• Direct & Indirect Taxes : My inputs, outward, incentives & disposal income for
circulation and expansion.

• Example: Budget 20 has increased the rates of personal income tax

• Impact ? FII will run away ..
• When ? Already. Stock markets have seen the worst downward trend post
budget.
 WHAT ARE TECHNOLOGICAL FACTORS?

In PESTLE analysis, technological factors are variables which relate to the existence,
availability, and development of technology. This could include things from
computational power to engine efficiency.

Ecommerce

Automation

Sophisticated Products
 HOW DO TECHNOLOGICAL FACTORS AFFECT
BUSINESS?

It might be unclear how technological factors can directly affect business, unless you take a step
back and look at all of the technology that’s used in day-to-day life. Think about the machines
which are used to print on the t-shirts you buy, the computer servers which are used to keep up
the website(s) you own, or the fuel used to power the car(s) you drive. Technology hugely dictates
the way many things are done, in business or otherwise.

GENERAL EXAMPLES OF TECHNOLOGICAL FACTORS AFFECTING BUSINESS INCLUDE:

• The existence of 3D technology
• Computer calculation speed/power
• The ability of computers to create truly ‘random’ numbers
• Engine efficiency
• Internet connectivity
• Wireless charging
• Automation
• Security in cryptography
 IMPACTS OF TECHNOLOGICAL FACTORS ON STARBUCKS
Starbucks was in a good position and enjoyed benefits of the emerging mobile wave. Its
partnership with Apple to bring app based discount coupons helped it ride the mobile wave
easily.

The company has introduced Wi-Fi capabilities in its outlets already. Internet is important to the
consumers. They can now surf the web and do work while sipping Starbucks coffee. This is an
added value to the brand. It enhances the overall consumer experience.

Starbucks is also enabling mobile payments. They are testing this in pilot locations in the US.

Some other technological factors to keep in mind are:

• Emergence of innovative technology
• Biotechnological developments
• Developments in agriculture
CONCLUSION FOR TECHNOLOGICAL FACTORS

In conclusion, technological factors are one of many external factors

that can affect businesses, and are an integral part of PESTLE analysis.
They can be defined as factors which relate to the presence and
development of technology, on either a local or global scale. There are
many different examples of technological factors which affect business,
visible in companies from Apple to Starbucks.
 Environmental Factors
These factors include all those that influence or
are determined by the surrounding environment.
Factors of a business environmental analysis
include but are not limited to climate, weather,
geographical location, global changes in climate,
environmental offsets , ground conditions, ground
contamination, nearby water sources, etc.
Environmental Factors

• Environmental factors include those factors that influence or

determine surrounding environment.
• Environmental factors talk about how people’s perception
towards environment can affect business.
• These factors have become important because of increasing
scarcity of raw materials, increasing pollution, amount of
waste generation and it’s disposal.
Environmental factors
1. Geographical Location
2. Climate change
3. Disposal of waste material
4. Energy availability and consumption
5. Recycling procedures
6. Limited natural resources
7. Attitude towards environment
MADE BY:- 1. DAMINI CHHATWAL (ROLL NO. 2)

2. NAMAN GUPTA (ROLL NO.16)

3.HARSH MEHTA (ROLL NO.24)

4.DEEP THAKKAR (ROLL NO.37)

5. DEEPIKA UDAWAT (ROLL NO.38)

6. SHUBHAM YADAV (ROLL NO.42)