This document analyzes the external environment factors that impact an organization through a PESTLE analysis framework. It identifies several macroeconomic, social, policy, technological, industrial, and business environment factors that present opportunities or threats. These include factors like rising per capita income, increasing urbanization, changes in import/excise duties, emission standards, raw material prices, and expansion plans of other players in the industry. Conducting an external analysis helps an organization understand the external environment, identify opportunities and threats, and formulate effective business strategies.

1. *

2. *
*Helps organization to identify Opportunities
and Threats
*To consolidate and strengthen organization’s
position
*Provides the strategists of which sectors have a
favourable impact on the organization
*Organization knows where its stands with
respect to its environment
*Helps in formulating appropriate strategy
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3. *
*“Surroundings, external objects, influences or
circumstances under which someone or
something exits”
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4. *
*Socio-cultural factors
*Demographic characteristics
*Social attitudes
*Educational level, awareness and consciousness
of rights
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5. *
*Environmental Factors
*Weather change
*Climatic change
*Demand related factors
*Supplier related factors
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6. *
*Political factors
*Political system
*Political structure, its stability
*Government policy and its intervention
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7. *
*Legal Factors
*Policies related to licensing , monopolies
*Policies related to export and import
*Policies related to distribution and pricing
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8. *
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9. *
*Dividing the environment into different
sectors.
*Analysing the impact of each sector on the
organization.
*Subdividing each environmental sector into sub
factor.
*Impact of each sub sector on organization in
form of a statement.
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10. *
+Help to determine the key threats and
opportunities.
+Good tool to qualify the factors related to
company’s strategy.
+Can consider many factors for each special
case.
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11. *
-It doesn’t show the interaction between the
factors.
-It can’t reflect the dynamic environment.
-It’s a subjective analysis tool.
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12. Micro
Environment
Marketing
Intermediaries
Suppliers
Market
Types
Market
Demand
Competition
Financial
Institutions
Regulatory
Provisions
Industrial
relation
climate
Availability of
skilled
workers
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13. *
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14. *
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15. *
Trends
Probability
of
Occurrences
Impact on strategies
S1 S2 S3
T1
T2
.
.
+2 Extremely favorable impact
+1 Moderately favorable impact
0 No impact
-1 Moderately unfavorable impact
-2 Extremely unfavorable impact
Degree of quality
of impact on each
trend on different
strategies
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16. *
Firm
Internal Environment
Relevant Environment
Micro Environment
Macro Environment
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17. *
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18. *
•Sales of Passenger Cars in India is likely to grow at an
average of 14.9% each year to touch the 2.1 million mark
by 2011 (Source: Frost n Sullivan)
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19. *
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20. S.
No.
Environmental Factors Opportunity
/Threat
Reasons/Remarks
1. Macro-Economic Factors
-Per capita Income
-Loans Availability
- Interest Rates
↑
↓
↑
Rising PCI means more
affordability. (Sixth Pay
Commission)
Banks are not sceptical in giving
loans.
People can’t pay easy
instalments
2. Social/ Demographics
Factors
-Urbanization
( 28% to 40% by 2020 )
Middle Class Increasing
-Penetration Levels
-Labor (JV’s)
-Growing Working Class
(Ex. BPO)
-Improving Public Transport
↑
↑
↑
↑
↓
Demand for Passenger cars
Sales are increasing at a YOY of
over 60 % in the long run.
LOW (10 per 1000)
India has one of the cheapest
labour available hence many
foreign companies are eyeing to
merge with Indian players.
Resulted in more no of cabs.
With an advent of projects like
Delhi Metro .
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S.
No
.
Environmental Factors Opportunity
/Threat
Reasons/Remarks
3. Policy
-Import Duty
-Excise Duties
-FDI
-Regulatory Issues like
Acts, Safety Standards etc.
↑
↑
↑
↓
Currently import duty is
100%.
Excise duty has been
reduced from 16 %to 14%.
100 % FDI is allowed .
MVA 1988 and MVR 1989
which promotes use capital
intensive technology
4. Technology
-Emission Standards
-Hybrid Cars
-Fuels
-IT (CAD/CAM, Design and
Automation)
↓
↑
↑
↑
Bharat III resulting in
dependence on other
countries for technology
Excise duty has been
reduced from 24 % to 12 %.
With upcoming Bio- fuels
,LPG & CNG.
India has one of the
cheapest IT Resources.

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S.
No.
Environmental Factors Opportunity
/Threat
Reasons/Remarks
5. Industrial Factors
-Raw material price
↓ Steel Prices have touched
Rs 5000 since May 2010
6. Business Environment
-ROCE
-Expansion Plans of Incumbent
players
↓
↓
With players like Hyundai and
TATA having ROCE of 9% and
32%.
In future has huge capacity
plans which will give the
incumbent companies a cost
advantage.

23. *
*Presented By,
>Deval Naik
>Ashley T
>Tushar Sharma
>Rohit Kulkarni
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