Htoo Wai Lin Aung

Diploma in Business & Management (DBM – 36)

Business Environment Analysis

Assignment 1 – PESTLE Analysis

Assessor

Dr Han Lynn Naing

 Table of Contents

Page
1. Introduction 1

2. PESTLE analysis of the business 1

2.1 Political Factors 2

2.2 Economic Factors 3

2.3 Social Factors 3

2.4 Technological Factors 4

2.5 Legal Factors 5

2.6 Environmental Factors 6

3. Conclusion 6

Reference
1. Introduction

PESTLE analysis is a strategic planning tool that is used to examine various factors
that affects the market environment for a business or organization. The goal of PESTLE
analysis is to develop a profound understanding of the external environment where the
organization operates [1].
The purposes of PESTLE analysis are critical factors for startup success. PESTLE is a
framework for an extensive analysis of the environment in which organization operates, and
for creating possible business strategies. PESTLE analysis is used for strategic planning,
marketing planning, new product/service development and research (Vasileva, 2018).
I would like to establish paper industry as a business. I intend to give the name of my
company is Shwe Recycle Pulp & Paper Co., Ltd. The paper factory will be built in Nay Pyi
Taw which is the capital of Myanmar and will distribute across the world. The paper factory
will require 700 employees and 100 staffs for marketing and office.
I will produce and sell the pulp, paper and plastic pellet from the plastic waste when
production. I expected to competitive with other paper production and distribution
companies. Therefore, I will use the PASTLE analysis to provide an overview of the
situation, identify areas of importance for improvement, and define guidelines for startup my
business, with the aim of increasing competitiveness.

2. PESTLE analysis of the business

A PESTLE Analysis is a framework for identifying the Political, Economic, Social,

Technological, Legal and Environmental factors that could impact your business. It’s
commonly presented as a six pillar structure and can be applied to any business in any
industry [2].

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 PESTLE analysis is assessed as a prerequisite/mandatory method that allows
identifying factors relevant to the business environment and provides data and information
that allow organizations within the analyzed environment to predict the situation in order to
adapt to new situation and develop competitiveness (Walsh 2005).
PESTLE analysis enables identifying business opportunities and threats and adapting
to market changes in a timely manner.

2.1 Political Factors

These factors are all about how and to what degree a government intervenes in the
economy or a certain industry. Basically all the influences that a government has on your
business could be classified here. This can include government policy, political stability or
instability, corruption, foreign trade policy, tax policy, labor law, environmental law and
trade restrictions [3].

Nowadays, the government has encouraged the promotion of domestic production in

Myanmar. Foreign money will be achieve by exporting pulp and paper to the international
markets and also can be pay taxes for the government. Labor law and minimum wages that
stipulated from the government will follow for the employees in my factory. I will export not
only the domestic but also the trading partners’ countries of Myanmar as well. I will try to
produce the product that trusting from people of my country and worthy item of the country.

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2.2 Economic Factors

From the economic point of view, the impact on business should be observed through
the way of financing offered by banks, interest rates in individual countries, exchange rate,
quality costs, inflation rate, price and quality of labor and energy [4]. For example, the
product's price will increase due to the inflation rate and also increasing unemployment when
the countries face with economic recession. The imports and exports will difficult due to
exchange rate at that time.
Exchange rate and Interest rates are focused on importing raw materials from the
foreign countries for producing the paper and pulp. Other expenses, such as transportation
charges, are also considered in exports of products and import of raw materials. It is also
important to relieve overhead costs when production of product. Therefore, I will focus on
the external impacts relate with the economic factors at normal time. I will postpone the
establish plan for new business when face with the economic recessions.

2.3 Social Factors

This set of factors has a very powerful impact on the overall assessment. This
includes population trends such as the population growth rate, age distribution, income
distribution, career attitudes, safety emphasis, health consciousness, lifestyle attitudes
and cultural barriers [5]. The population growth and the economic growth of the country are
directly proportional. As a result of the growing number of young people who can work,
economic opportunities will be promoted. People can be chosen the professional work for
their living.

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 In my business, the occupational health and safety for the worker in my factory will
be emphasized. Clinic, physician, health awareness sharing, pension insurance and life
insurance will be arranged for the occupational health. I will also provide aware of the
educational conventions to promote the lives of workers who work in the factory. Cultural
barriers are different for each country. Currently, social media such as Facebook, Instagram,
TikTok and YouTube etc. are influence on the people of my country. Therefore, I will use
social media to introduce my business to the customer.

2.4 Technological Factors

These factors pertain to innovations in technology that may affect the operations of
the industry and the market favorably or unfavorably. Technological factors cannot be
observed only at the level of availability of various technologies, but also in terms of the
existence of infrastructure for the necessary support of modern systems. This refers to
technology incentives, the level of innovation, automation, research and development (R&D)
activity, technological change and the amount of technological awareness that a market
possesses [6].

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 The world is developing day by day. The various invention around the world.
Therefore, the companies are strongly competitive regard with the technology each other. The
other foreign countries are also importing the good quality, packing books and paper to my
country. Therefore, my business also needs to be manufactured by mass production using
high-tech devices. Automatic technologies are also needed to reduce human errors. Research
and development teams will be establish to increase the product quality. Technical experts
from the foreign countries will be invited for conduct training to use advanced technologies
in my factory.

2.5 Legal Factors

Legal factors are external factors which refer to how the law affects the way
businesses operate and customers behave. Product transportation, profit margins, and
viability of certain markets are all examples of things which may be influenced by legal
factors [6]. Legal factors can decide whether or not there is a business behind selling a certain
product (perhaps drugs, or sharp objects), and can also affect the mechanisms through which
a company stocks their inventory or interacts with the customer.
In my business, I will follow the labour law that stipulated from my government for
issue of employees. The factory inspection department of the government had been also
stipulated the occupational health and safety regulations. I will try to train my staffs to know
and obey the law. My company will be register at concerning department. My product brand
name will be register according to the copyright law.

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2.6 Environmental Factors

Environmental factors which are also sometimes called ‘ecological factors’ refer to
variables regarding the physical environment.  They have become important due to the
increasing scarcity of raw materials, pollution targets and carbon footprint targets set by
governments. These factors include ecological and environmental aspects such as weather,
climate, environmental offsets and climate change which may especially affect industries.
Today, the businesses of the nations are considered to focus on environmental and
climate change. In Myanmar, there has been consideration for environmental issues in
business environment, since around 2010. In my business, premium quality raw materials
will also import for production of pulp. I will also try to reduce the impact of environment
when using the chemicals to purify the raw materials. The waste from the factory will also be
recycled for the production of electricity as sustainable energy development. The water
treatment system for waste water will be adapted to clean till can be use drinking water. I will
follow the standard of environmental organizations and try to get certificates from them.

3. Conclusion

We need to find out which factors including the PESTLE analyses are coincided with
realistic, when starting a new business. We have to consider the measures for solving issue
which are coinciding with the factor of PESTLE analysis. We can also understand not only
threat but also opportunities by using PESTLE analysis when considering to starting new
business. Thus, every new company should be considering to use PASTLE analysis for
making strategies before starting the business.

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References

[1]. https://www.batonglobal.com/post/introduction-to-pestle-analysis-and-why-a-
systemic-approach-is-best

[2]. https://getlucidity.com/strategy-resources/introduction-to-pestle-analysis/

[3]. https://www.business-to-you.com/scanning-the-environment-pestel-analysis/

[4]. PESTEL Analysis of External Environment as a Success Factor of Startup

Business,Ivana Marinovic Matovic,DOI: 10.5281/zenodo.4058794

[5]. https://www.business-to-you.com/scanning-the-environment-pestel-analysis/

[6]. https://pestleanalysis.com/legal-factors-affecting-