What is an External Environment?

An external environment is a group of factors or conditions that are outside the organization but affect it in some extent. This is
characterized by complexity, uncertainty and rapidly changing environment. This is composed of political, economic, social,
technological, environmental and legal system.

What is PESTEL analysis?

A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the
macro-environmental (external marketing environment) factors that have an impact on an
organisation.

POLITICAL- These are Government actions which affects the operations of a company or
business. These actions may be on local, regional, national or international level. In short, these
are all about how and to what degree a government intervenes in the economy.
Example: Donald Trumps impeachment effect to S&P 500 companies and democrats or
republican business, most controversial banning of chineses companies to do business with
ameicans (Huawei) through an executive order by Donald Trump, local policies like the Tax
Reform For Acceleration Law (TRAIN), sintax, cooption is another Political fator to consider

Read more: http://www.businessdictionary.com/definition/political-environmental.html

Economic factors- these have a significant impact on how an organizsation does business
and also how profitable they are. Examples include –growth, interest rates, exchange rates,
inflation, disposable income of consumers and businesses and so on.

Unemployment rate duing the time of Gloria Macapagal arroyo. She changed the definition
of Unemployment rate, according to prof Prime in Econ, that makes the unemployment rate
of the Philippines low. This results in sudden boom of the economy during her presidency.
Foreign Exchange rate. Business can take advantage of the volatility in the exchange rate
of Peso to dollar or vice versa. Exporters will earn if Dollar has high exchange rate but
importers will suffer.

Social Factors - are the areas that involve the shared belief and attitudes of the population.
These factors include – population growth, age distribution, health consciousness, career
attitudes and so on.

Population growth of japan as of 2017 is -0.2%, this means that

Japan's overall population is shrinking due to low fertility rates. Age distribution, per
statista.com, 0-14 years: 12.71% (male 8,251,336 /female 7,787,234)
15-24 years: 9.63% (male 6,397,995 /female 5,746,140)
25-54 years: 37.28% (male 23,246,562 /female 23,784,273)
55-64 years: 12.01% (male 7,588,597 /female 7,563,245)
65 years and over: 28.38% (male 15,655,860 /female 20,146,914) (2018 est.)

This means that Japanese are becoming older. This give rise to house delivering company
in japan named 7/11 and TA-Q-BIN  for food delivering . Given the aging population of
Japan, older Japanese still want to participate.

In the US, the aging population makes use of the Medicare/healthcare industry

Legal- this can overlap with political factors. Same examples with political/ can give
emphasis on the Corporate tax( from 30% will be minimize), labor laws Sick leaves and VL,
13th month pay, Republic Act No. 8293 [An Act Prescribing the Intellectual Property Code,
night differentials, worker’s compensation,

Environmental Factors
These factors have only really come to the forefront in the last fifteen years or
so. They have become important due to the increasing scarcity of raw
materials, polution targets, doing business as an ethical and sustainable
company, carbon footprint targets set by governments (this is a good example
were one factor could be classes as political and environmental at the same
time). Examples ae how foodchains are converting from plactic containers to
recyclable material, bamboo toothbrush, wooden utensils, bring-your-own
containers ( Humble Market and Ritual) , Zero waste program. SM and other
chains using reusable bags to reduce plastic usage.

People start investing to renewable energy sources like thermal, sola and wind, in Singapore they utilize
the use of waves to generate electricity.
Technological Factors
We all know how fast the technological landscape changes and how this
impacts the way we market our products. Technological factors affect
marketing and the management thereof in three distinct ways:
 New ways of producing goods and services
 New ways of distributing goods and services
 New ways of communicating with target markets

Classic example of technology

A concise timeline of Nokia’s important moments:

 In October 1998, Nokia became the best-selling mobile phone brand in the world;

 Nokia’s operating profit went from $1 billion in 1995 to almost $4 billion by 1999;

 The best-selling mobile phone of all time, the Nokia 1100, was created in 2003;

 In 2007, Apple introduced the iPhone

Also with the advent of IOT or internet of things were humans are not the only species on earth that can communicate, Rise of the AI which can
replace repetitive jobs, automatic shopping center, Precision agriculture (using of resouces where it is needed efficiently) and smart agriculture
(using drones, computers, AI oin determining and controlling harvest (google is not developing software to help mitigate climate change in
agiculture)

References:

https://www.arup.com/projects/del-monte-waste-to-energy-plant
https://www.freshfruitportal.com/news/2017/01/05/del-monte-philippines-creates-renewable-energy-
from-pineapple-waste/
https://iegvu.agribusinessintelligence.informa.com/CO216136/Pineapple-canner-Del-Monte-
Philippines-to-go-public
https://www.businesswire.com/news/home/20140218006965/en/Del-Monte-Pacific-Limited-
Completes-Purchase-Del
https://www.delmontepacific.com/sustainability/nurturing-nature
https://www.freshdelmonte.com/our-company/business-divisions/operations-and-sales/asia-pacific-
operations-and-sales/
https://businessmirror.com.ph/2019/10/29/new-cba-at-del-montes-cdo-plant-to-benefit-2500-workers/
https://www.foodnavigator-asia.com/Article/2018/02/12/Del-Monte-Philippines-embarks-on-South-
East-Asia-s-largest-food-and-beverage-IPO-in-six-years
https://www.pna.gov.ph/articles/1075910
https://www.just-food.com/news/del-monte-pacific-to-sell-stake-in-philippines-
subsidiary_id142995.aspx
https://business.mb.com.ph/2019/12/26/del-monte-pacific-incurs-net-loss-on-plant-closures/

https://quickbooks.intuit.com/r/marketing/market-research-tips-how-to-conduct-an-industry-analysis/