EXTERNAL FACTORS BUSINESS
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ME I AMEXTERNAL FACTORS BUSINESS
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ME I AMEXTERNAL FACTORS INFLUENCING BUSINESSES
What are external factors that influence a business?
There are some factors that a business cannot control. These factors can unknowingly impact a business
positively or negatively. These factors are known as external factors.
What is PESTLE?
A PESTLE analysis evaluates and analyses different external factors impacting and affecting a business,
either positively or negatively.
P- POLITICAL
E – ECONOMIC
S – SOCIAL
T – TECHNOLOGICAL
L – LEGAL
E – ENVIRONMENTAL
PESTLE analysis for Coca Cola
P – Coca Cola operates almost everywhere. If a country’s political relation with another country where
Coke operates well, and understands its consumer value, it will not operate in the country with terrible
relations. This is because this could cause issues between countries. Another political issue would be a
country not having good relations with the headquarter country of Coca Cola.
E – If the market value of a country goes down, and businesses are facing immense loss, Coca Cola
would have to cut down on its operation there so as to save, maintain and regenerate their abilities to
produce more assets.
Social – If the consumer taste goes down, and they start choosing substitutes, Coca Cola would have to
change its production techniques and hire more employees so as to improve specialization.
Technological – If Coca Cola wants to improve service and speed, it may have to invest in more AI so that
certain processes such as service is sped up.
Legal – If certain laws in a country stops Coca Cola from operating, such as Mexico, where people drink a
lot of Coca Cola, the assets, revenue and the profit generated will enter into a loss situation.
EXTERNAL FACTORS INFLUENCING BUSINESSES
Environmental – If the age of sustainability starts, Coca Cola may have to use a sustainable alternative to
its cans, which can again fuel interest in its consumers and customers.
