Question

Thinking about the PESTLE factors how do firms know which factors will impact their markets home and abroad?

Answer 1

Firms have to identify the nature of products that are being served to the people in domestic and overseas market. If the product is localized in nature for each market, then it is a social and cultural factor that affects the market, because each market has its own social and cultural preferences. For example, McDonald sell burgers that are localized to the market of gulf nations or India. But, Coca cola with global appeal remains the same. Further, it is the price responsiveness or elasticity of demand that makes the market get affected. If the demand is elastic in nature, then economic factor and or purchasing power of the consumers is to be considered most. Hence, firm has to consider it while selling the product in different markets. The third way is the nature of technology used with the product. If it is a high end technology driven product, then it is important to consider the technological environment of the market. It will help firm know the market better. Besides, the product with scope of affecting the regulations such as copyrights, patents and IPR rights, has to consider the related laws in each market. Hence, legal environment will have to be considered for each market.