Question

The company is WM Waste Management. I have a hard time determining PESTEL. I would also like to hear ideas about Part B, but part A is the part I really need help on.

A. General Environmental (PESTEL) Analysis (2-4 pages): This section needs to include a complete analysis of the general external environment. Please refer to Table 3.1 and figure 3.1 on page 39 of your textbook (4 Ed.). You should explicitly analyze how any trend you identify in each of the segments in the external environment may affect the industry. You need to explicitly state the implications. For example, if the industry you are analyzing is personal computers and you see an expanding economy in some emerging economies, but a recession and declining disposable incomes in other economies, your analysis should include how these trends are likely to influence the personal computer industry. Do not discuss specific companies in this section. At the end of this section, you need to identify the industry top two driving forces (DFs). A driving force is an external environment change (e.g. change in a governmental policy or emergence of a new breakthrough technology) which may significantly change the rule of the game in the industry competition. Please refer to Table 3.3 and pages 55-57 of your textbook (4th Ed.). B. Industry Dominant Economic Features (2-3 pages): This section needs to include a complete analysis of Market Size, Market Growth Rate, etc. Please refer to Table 3.2 and pages 41-42 of your textbook (4th Ed.).

Answer 1

Answer A:

PESTEL analysis is a strategic tool that is utilized in order to analyse the macro environment of the organization. PESTEL stands for - Political, Economic, Social, Technological, Environmental & Legal factors. These factors have a direct impact on the macro environment of not only Waste Management industry but all the other industries. However, the intensity of impact varies from industry to industry.

PESTEL analysis for a Waste Management industry is as follows:

Political factors: There are several political factors that have impact on survival and profitability of WM industry. Some of the political factors that have severe impact on this industry are highlighted as follows:

• Political stability
• With change in political party in rule the policies and laws enforced on waste management industries also changes. One such example is contract law.
• Trade barriers can either protect the waste management industries by banning foreign organizations to compete or can also harm the industry by imposing barriers on exporting.
• Profit maximization is also limited due to imposition of high tax rates on waste management industries.

Economic factors: The economy of the country where waste management industry functions influences demand, investment and profitability of the company. Some of the economic factors that have severe impact on this industry are highlighted as follows:

• Economic system of operational country.
• Rate of GDP growth.
• Interest rates on investment.
• Level of unemployment and
• Exchange rate.

Social factors: The social factors of the operational country have a direct impact on the success of waste management industry. Some of the social factors that have severe impact on this industry are highlighted as follows:

• Demographics of the population,
• Distribution of class,
• Education of population,
• Health standards,
• Culture, belief, attitudes and values of population.

Technological Factors: With technological advancement, prices and competition rapidly changes. Some of the technological factors that have severe impact on this industry are highlighted as follows:

• Recent technological breakthrough,
• How easily can the technology be copied by other companies of the industry,
• What can new technology offer to industry,
• Impact on cost of products and services of waste management industry.

Environmental Factors: These factors that significantly impact Waste Management industry include:

• Present weather conditions,
• Pollution fines and quotas on imposed on waste management industries.
• Resistance and conflicts from local public,

Legal Factors: Some of the social factors that have severe impact on waste management industry are highlighted as follows:

• Intellectual property laws,
• Health and safety laws,
• Other data protection laws
• Laws related to quality and price of products,
• Discrimination laws

From the several external forces discussed above two driving forces for waste management industry are legal factors and economic factors.