Panasonic PESTLE Analysis
Detailed PESTLE analysis of Panasonic examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Panasonic is present in many countries so they have to manage diverse regulations of every country. Over the last few years, developing countries such as India have changed their policies regarding entry into their economies. Panasonic is present in more than 50 countries and so it is important for them to study the political stability in every country because a volatile government generally leads to changes in policies and this type of environment is not good for the long-term growth of the company. Panasonic should focus on countries that have good trade agreements with other countries. India and Japan have good ties so doing business between these two countries is easy which will be very beneficial for the brand. Enforcement of law and level of corruption is a very good indicator to be studied by Panasonic in order to identify markets where they can expect to grow their investors as well as consumer base. Law corruption and good enforcement of the law will attract investors.
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This concludes the political factors in the Panasonic PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Panasonic:
Services are contributing more to the GDPs of developing countries as compared to manufacturing, goods, and agriculture sectors, Panasonic needs to study the demand shift of the economy before entering into a market. The company should study workforce productivity, labor cost, and unemployment of different markets.
They can target countries such as Bangladesh and India where labor cost is low, productivity is high and labor is easily available. By setting up business in these markets, Panasonic can increase their profit margins due to a cut down in cost and extra profits can be invested into research & development.
The study of other economic factors such as the pattern of change in average income, pattern of expenditure, fiscal policies, spending on infrastructure, etc. is very important before entering into a new market because these factors will determine the sustainability and growth of Panasonic in the long run.
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Social Factors:
Following are the social factors impacting Panasonic PESTLE Analysis:
Recently Japan has been seeing a decline in its population, and therefore seeing a decline in business. Japan is a very technologically advanced country so major population lack human contact in the society where technology is dominating. This has significantly impacted the birth rate in Japan and there is a huge decline in the population of Japan. Because of this declining rate, Panasonic has stagnated significantly in their home turf which contributes a significant portion to their revenue. In other countries. The company focuses on demographics and makes sure its positioning is done as per the social status, culture and beliefs of the people of that country or region.
Technological Factors:
The technological factors in the PESTLE Analysis of Panasonic are mentioned below:
Panasonic needs to study the recent technological developments and breakthroughs made by competitors in various countries they are present in or intend to enter. It is important to monitor the level of popularity and how quickly the technology is growing and disrupting its competitors’ revenues. This would help Panasonic in either matching up with the technology or bringing in new and better technology in a given country. The company should also focus on countries that are technologically growing and they could leverage their position in these countries by introducing revolutionary technologies that they have never seen before.
It will give an edge to Panasonic over its competitors in that market.
Legal Factors:
Following are the legal factors in the Panasonic PESTLE Analysis:
Panasonic needs to do due diligence in order to find out the influence of government on the judiciary of a given country because an independent judiciary reflects good signs for long-term prosperity and profitability for a global business. They also need to research the time taken by courts in proceedings in every country because if the judiciary’s response time is not good then it will pose numerous problems for a business. With technological advancement in the world, data generation has also increased many folds and most of the governments are conscious when it comes to data protection so Panasonic needs to be in compliance with the data protection acts of every country. Nowadays, most governments emphasize labor laws and safety & health laws to protect the interest of their workforce so it’s important for Panasonic to study these laws before entering into a new market.
Environmental Factors:
In the Panasonic PESTLE Analysis, the environmental elements affecting its business are as below:
Environmental factors are now playing a more central role in the context of business because every country is becoming more cautious about their environmental impact, they are also focusing on sustainable development. Panasonic has increased its focus on sustainable innovation and framed strict rules and regulations for its suppliers too regarding their environmental impact.
Moreover, based on sustainability trends, it is investing in sustainable products and services like sustainable housing. Panasonic should carefully analyze the role of environmental agencies which is critical in safeguarding norms and powers and the roles of agencies vary from country to country so they need to study these patterns and make sure they duly comply with these rules and regulations to maintain a good image in the eye of its consumers. Panasonic can also evaluate their options of investing in renewable sources of energy in multiple countries because most of the countries are offering good opportunities for investment in these resources.
To conclude, the above Panasonic PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
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