Question

Steinoff Pestle Analysis for political economical/ social/ technological/ legal and environment

Answer 1

PESTLE Analysis of Steinhoff International:

• Political Factors:
  • There is high uncertainty in the political climate of South Africa. This can affect the business model of the company. The company needs to abide by the local government trade rules and compliances and make adjustments to the business strategy of the company.
• Economic Factors:
  • The uncertainty in political climate may lead to economic instability of the company. Conditions like recession and inflation can impact the cash flow of the company.
  • Lack of substantial investment may impact the expansion decisions of the company. If the economy is unstable, the investors will be hesitant to pour their money in business.
• Social Factors:
  • The purchasing power of citizens in South Africa is rising. The stability in the economy may increase the purchasing power of citizens. This will facilitate the business conditions as sales of the company will witness a splurge.
  • There is high rate of unemployment in the region. If a country has high unemployment, then labor cost in that country will be fairly cheap. Hence the expenses of the company will reduce substantially.
• Technological Factors:
  • Technical advancement in the region is enhancing. The integration of technology like data analytics and AI would facilitate demand forecasting for company’s offerings and make production more accurate.
• Legal Factors:
  • South African law is quite stringent for businesses. The business needs to take special care to abide by the laws and regulations specified by the government.
• Environmental Factors:
  • Rate at which climate is changing may impact the value chain of businesses. The company may have to invest in sustainable activities so as to facilitate the ecological balance and save the environment.