What is PESTLE analysis?

It is an analytical framework, which enable the exploration of the of the external

environmental of the business (Srdjevic et al., 2012). Notably, the investigations equip the

firm the ability to speculate the environmental implications (Dcosta, 2011). The process of

the validation encapsulates a variety of disciplines as to attain the entire picture of the

environmental factors. Srdjevic et al. (2012) stated that the whole procedure necessitates for

the company to conceptualise following;

Political factors

Economic factors.

Social aspects.

Technological aspects.

Legislation implications.

Environmental factors.

The significance of the PESTLE analytical tool

To fully utilise the technique, it should be applied in both regular and sequential manner, as

to even detect even a minimal variation in the environment (Dcosta, 2011). Moreover, some

of the effects are severe to the firm, if it fails in the anticipation and preparation (Team,

2013).

Agreeably, the tool outlines an applicable and easy framework for the analysis of Li-Ning

environmental factors (Housing Industry Association, 2011). Additionally, the tool

necessitates for the cross-discipline knowledge, hence higher accuracy results; helps in the

mitigation and counter of the potential threats of Li-Ning firm (Zhengfei and Kangtao, 2015).

Over the decades, the technique has been used in the by Li-Ning company in the planning

and maintenance of the strategic positioning; the firm utilises the tool in the identification and

the exploitation of the opportunities, for instance the tool was used in the entering of the
market of Netherlands (Zhengfei, 2016).

How does Li-Ning Company create its competitive advantage?

The Macro environmental analysis that the Li-Ning firm utilise in the decision making:

Politics: The Europe Union has emphasised more on the social value of the sports, hence has

publishes a Sport Code of Ethic (Team, 2013). The communal sports strategies are

incessantly being integrated to the activities affiliated to the department of health (Zhengfei

and Kangtao, 2015). As to maintain the competitive advantage, the company has shifted the

towards the preventive productivity. That said, this has mitigated all the hazardous effect. The

company took the advantage of this and made trade agreements that increased the purchase

rates (Zhengfei, L., 2016).

Economic: Decision making regarding the economic factors on sporting are often first

implemented at the local level as to impact the regional level (Srdjevic et al., 2012).

Therefore, Li-Ning company has integrated a system where in cases of new markets the

company first considers the local issues (Zhengfei, L., 2016; Zhengfei and Kangtao, 2015).

This economic strategy has enabled the company, first validate the economic pillars in a

particular market before making any decision. For instance, in the London Olympics brought

a high purchasing power and later on there was a decline, for the country was under

constrains, in the year 2012 (Zhengfei, L., 2016). The company acquires the ability to balance

the cost of production and the sales; the company sourced raw material from cheap sources

and limited the production (Li-Ning company,2015).

Social: These are all the activities about the way of life about the community the firm

operates within (Dcosta, 2011; Team, 2013). The company has the highly considers all the

activates of the society in the decision making. For instance, prior to the production the

company has kept into account the age distribution of the surrounding society. The company

has come up with communal based projects that give aid the society; water projects and
schools (Team, 2013; Li-Ning company, 2015). This has made the company known among

the communities, thus increasing the chances of sales (Li-Ning company, 2015).

Technological factors: These refers how rapid the technology evolves (Johnson et al., 2014).

The development and invention rate of the technology dictates how the firm will meander in

the market; more so states how significant the company will stand in the industry (Zhengfei,

2016). Li-Ning company, has a flexible system of governance that easily assimilates new

technology in the production. For instance, the company has a flexible of production line that

has accommodated various types of synthetic fibre, this helps the company the reduction of

production, whereas it sustains the position in the market (Johnson et al., 2014; Zhengfei,

2016).

Environmental implications: These are all the scarce and unlimited resources, the

disposition of the waste products and the recycling production (Srdjevic et al., 2012.). The Li-

Ning firm has established practices whereby the company collects all the waste materials and

ensures to recycle back in the production process. This has helped the firm in the

maintenance of the customers and environmental friendly company (Zhengfei, 2016).

Conclusion

As a result of maximising on the PESTLE analytical tool, Li-Ning company has created and

maintain the competitive advantage in the industry. More so, the company has been able to

maximise on the new markets and sustain the competition. The technique enables the firm to

make both long term and short term goals.

Reference

Dcosta, A., 2011. PESTLE analysis history and application. by Edwards G., http://www.
brighthubpm.com/project-planning/100279-pestle-analysis-history-andapplication/(visited on

9.6. 2014 at 10.57 pm).

Team, F.M.E., 2013. PESTLE Analysis. Strategy Skills. Free management ebooks, p.15.

Housing Industry Association, 2011. An Introduction to PESTLE Analysis. Housing Industry

Association Limited.

Johnson, G., Scholes, K and Whittington, R., 2014. Exploring Corporate Strategy. 10th

Edition. Pearson /FT Prentice Hall

Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2012. Identifying the criteria set for multicriteria

decision making based on SWOT/PESTLE analysis: a case study of reconstructing a water

intake structure. Water resources management, 26(12), pp.3379-3393.

Li-Ning company.,2015. Li-Ning Annual Report [J]. Economic Research Journal

Zhengfei, L., 2016. Li-Ning Annual Report [J]. Economic Research Journal,

Zhengfei, L. and Kangtao, Y., 2015. The Puzzle of Equity Financing Preference in China's

Listed Companies [J]. Economic Research Journal, 4, pp.50-59.