One of the very useful strategies for the environmental analysis is PESTEL Framework approach. PESTEL is the abbreviated form of Political, Economic, Social, Technological and Legal factors which shape an organization’s external or macro-environment and contribute towards its goals and objectives.
Like all other successfully big organizations, Unilever also analyses its business environment using PESTEL analysis:-
- Political/Legal Factors
The political environment of a country is one of the major factors which is responsible for the success or failure of the business organizations. It includes the stability of capital markets, labor markets, trade and other relevant issues. Unilever has managed to survive even in politically instable environment. The English government had supported Unilever through various administrative and legislative tools. They had lowered the taxes, signed trade agreements with foreign countries, lowered taxes, tariffs and custom charges. In South Asian countries, where political chaos is a normal option, the strength of Unilever is still maintained. Regional conflicts, however, do create problems, but import-based economies keep good trade terms even in the situation of political turmoil.
In South African states, there had been the problem of racialism in the past. Moreover, the government also intervened in the foreign investment and expansion. In these circumstances too, Unilever continued to operate as it had already gained huge stake in the African and Australian economies (David Kenneth Fieldhouse, P. 139).