PESTLE Analysis of Johnnie Walker
PESTEL is a strategic planning and management tool that helps to understand the business dynamics of a company in which it operates. PESTLE is an abbreviation of political, economic, social, technological, environmental, and legal factors. Johnnie Walker is a big name in the industry. The business environment of Johnnie Walker is really complex because of the strict environmental initiatives, regulatory changes, legal issues, and cultural trends. Please read the PESTLE Analysis of Johnnie Walker.
By conducting the PESTLE analysis, Johnnie Walker can develop effective strategies to help the company achieve its long-term goals and objectives. The company can expand its business by understanding its core capabilities and competencies. Here is the detailed PESTEL analysis of Johnnie Walker:
Political Factors – PESTLE Analysis of Johnnie Walker
Stability of Political System: Businesses grow rapidly in those conditions where the political system is stable. This kind of stability provides predictable growth trends to companies. In political tensions or chaos, it creates trouble for investors and stakeholders to invest their money. Political instability can negatively impact the industry’s growth and restrict the door of opportunities for companies like Johnnie Walker. Right now, Johnnie Walker is operating in several countries of the world, so its working is highly dependent on the political stability of the country in which it is operating.
Varying Policies:
In this unpredictable business environment, frequent changes in the policies or regulations can harm the business performance of companies such as Johnnie Walker. The environmental change pressure and latest trends are creating difficulties for companies. So, any sudden change in the policies from the government can hurt the business and growth of Johnnie Walker.
Protests:
The social or environmental activists’ protests put different kinds of pressure on companies that are working globally. Before making any decision or policy, it is necessary to carefully check whether it is good for certain types of people or not. Johnnie Walker should collaborate with environmental activists and pressure groups in order to minimize the risk of protests. Collaborate with local political parties and governance system to make special harmony among people. This is the best way to attain long-term goals without any disturbance.
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Corruption and Bureaucracy:
There are two things that can impact the business environment badly i.e. corruption and bureaucracy. Corruption in attaining licenses, contracts, and deals can lead to lawsuits. Working in regions where the corruption level is high and weak law enforcement makes the business atmosphere highly unpredictable. It is very tough to operate in this kind of business environment, especially for Johnnie Walker. It is imperative to avoid operating in those countries where political and economic system is highly corrupt.
Taxation and Trade Limitations:
Companies like Johnnie Walker can’t operate in those systems where the taxation level is high. It impacts the profitability and revenue stream of Johnnie Walker directly. It reduces exports and hurts international trade. By targeting low taxation markets, Johnnie Walker can earn more profits. On the other hand, trade restrictions are also not favorable for Johnnie Walker and can harm the relations between the countries. It is crucial to understand the key policies of a country before entering. It is also important to protect intellectual property rights as it helps to welcome new investors and people in business. Johnnie Walker should make policies by keeping these factors in mind.
Economic Factors –PESTLE Analysis of Johnnie Walker
Economic Cycle:
The economic condition of a region or country directly impacts the performance of any organization. Economies with growing trends provide plenty of opportunities to companies like Johnnie Walker. For this purpose, Johnnie Walker should understand the economic cycle of a country. Choosing mature or stable countries for doing business is such a great business move and Johnnie Walker can take advantage of this thing. Entering a well-developed country offers a myriad of growth opportunities. Unstable or unfavorable economic conditions are not suitable for Johnnie Walker.
Inflation:
The gross domestic product (GDP) growth rate of a country will help identify whether it is suitable for the company. If the GDP growth rate is high or stable, then it is ideal for Johnnie Walker to achieve its long-term objectives. The high GDP rate also shows the strong buying power of customers. Unemployment and inflation factors highlight the lower labor wages of a country. Opening production plants in these countries will help lower the production costs. It will open growth opportunities for the company as well as for the people of that country. Last but not least, a fluctuating exchange rate also influences the company’s performance, profitability, and trade.
Labor Condition:
In some Asian countries, the wage rates are slightly low due to unemployment and inflation. This factor is directly dependent on supply and demand. A skilled workforce can easily decrease the manufacturing cost of a product and provide better quality results. Before entering any market, Johnnie Walker should study the labor conditions of that country in order to enhance the quality of products and profits. Johnnie Walker can take advantage of this thing to manufacture more products at minimum time. The role of labor unions is also very important in the adjustment of wage rates. In order to tackle production challenges and increase efficiency, Johnnie Walker must hire skilled labor.
Financial Stability:
When a company is financially stable, it gets plenty of expansion opportunities. This thing provides a chance of global expansion to companies like Johnnie Walker. Conclusion: it makes the overall position of the company really strong and as a result, the company can secure a huge market share. This thing will also give a wonderful chance to Johnnie Walker to increase the capital at standard costs.
Economic System:
The economic structure is another important thing that influences the business practices of Johnnie Walker. It offers a great chance to companies to make a stronghold in the competitive market. If the economic structure of a country is really robust, then the country is highly suitable for investors and stakeholders.
Read Also: Complete SWOT Analysis of Hyundai Motor Company – 2022
Social Factors – PESTLE Analysis of Johnnie Walker
Societal Trends:
Socio-economic variables like migration trends, aging population, and other similar changes have immense importance for businesses such as Johnnie Walker. Johnnie Walker is an international company so societal trends play a huge role in its business practices. By studying the demographic qualities and socio-economic variables, Johnnie Walker can easily choose the right market for running a business. The migration of people also impacts the growth of companies. So before expanding business, Johnnie Walker must understand the general attitude of people in order to make policies accordingly.
Equality and Inequality:
Both factors are really important as they show the acceptance level of people in income. The overall business structure of a country is highly dependent on the performance of the company. This thing has a huge impact on a company’s working and business practices such as Johnnie Walker.
Gender Roles:
These days, both men and women are equal when it comes to professional life. In developed countries, women are equal to men as they participate in every matter. Johnnie Walker must utilize this thing in specific areas by assigning gender roles to enhance its productivity. It will also break the stereotypes and give Johnnie Walker a great opportunity to lead the competitive industry.
Social Norms:
Culture is another crucial thing when it comes to operating in a specific country or market. It is imperative for Johnnie Walker to study a country’s cultural habits carefully to make effective marketing strategies. Social norms and customer behavior are two important factors that fall under this category. Johnnie Walker can collaborate with local dealers and teams to easily understand a country’s culture. For example, selling premium or luxury products in a small market is not a good idea. So, make policies accordingly to sell and market your product.
Online Platform:
The impact of online shopping and social media is really huge these days. Many companies are generating most of their major revenue from online platforms. The trend of online shopping has been increasing since the last two years, and Johnnie Walker should exploit this to increase its customer base. It will also give more exposure to the company and enhance brand awareness. Nowadays, tech-savvy people love to shop products online, but millennials still prefer in-store shopping. Moreover, the rising use of the screen and social sites should be considered when establishing advertising and marketing policies.
Buying Behavior:
The spending pattern of the customer is based on its buying power. It involves societal norms as well as monthly income. Johnnie Walker can analyze the buying pattern of customers by studying the economic indicators of that country. This also shows the interest of customers. In some regions, people love to buy some products as a status symbol that is why they prefer branded products. But, some people buy products for functional purposes. That’s why it is imperative to understand the customer and its requirement before entering a particular region of the world.
Technological Factors – PESTLE Analysis of Johnnie Walker
Social Media Advertising:
In order to sell products or highlight your brand, many companies are taking the help of social media because it is one of the largest platforms for advertising. The increasing use of mobile phones and accessibility gives a wonderful chance to companies for advertising. Social media marketing is really innovative and can target customers globally. The importance of social media marketing is very paramount in modern business structure. It can easily enhance the business performance with the help of attractive campaigns, video ads, and more.
Innovation:
In order to take the competitive lead, Johnnie Walker should exploit the latest technologies to improve its business. By adopting the latest technologies, Johnnie Walker can decrease a product’s production cost. This kind of innovation can bring a considerable transformation in the market and is also suitable for giving tough competition to other companies. So, Johnnie Walker must use mature and innovative technologies to take its business to new heights. These merging technological innovations can prove really beneficial for the companies.
R&D:
To enhance the quality of products and manufacture new products, Johnnie Walker must invest money in R&D. Research and development is one of the most important factors that can increase the company’s efficiency by highlighting the new technologies. They also help to face challenges effectively and make the business practices highly favorable for the company. The company should invest in this sector in order to maximize profits.
Product Diversity:
With the help of new technologies, Johnnie Walker can manufacture products quickly. The addition of innovative technologies has reduced products’ lifecycle, especially the latest products. This thing puts pressure on the company to produce new products more often. On the other hand, it also requires product diversity to stay competitive in the complex and dense market.
Environmental Factors – PESTLE Analysis of Johnnie Walker
Recycling and Proper Waste Management:
The environmental initiatives have put so much pressure on companies in the form of proper recycling and waste management. It is not only good for the company but our nature too. Johnnie Walker should invest in this sector to manage waste and enhance the recycling process. Governments are taking strict initiatives regarding this thing, and it is a chance for companies to reduce their carbon emissions.
Renewable Energy Technologies:
Currently, many countries are working on renewable energy resources in order to minimize the consumption of natural resources such as fuel, gas, and fossil fuels. Developing these technologies requires a hefty investment, but these initiatives are great for our nature and prevent the depletion of natural resources. It is also good for achieving long-term sustainability and encourages the investors and stakeholders to invest in these initiatives. It will also enhance the brand image ad customer base of Johnnie Walker.
Climate Change:
Climate change is one of the biggest concerns for everyone these days. Governments and individuals are taking initiatives to take green steps. The varying environmental changes can harm the business practices of Johnnie Walker. Johnnie Walker can win the trust of customers by taking green initiatives.
Eco-Friendly Products:
Nowadays, the number of eco-friendly consumers is increasing daily, and they love to use eco-friendly products. Companies like Johnnie Walker can utilize this thing as an opportunity to develop eco-friendly products by following environmental rules. Johnnie Walker can make recycled bottles and packaging. By focusing on this thing, Johnnie Walker can win the trust of investors and stakeholders.
Environmental Regulations:
Johnnie Walker can face negative feedback from governments, media, the general public, or individuals because of using natural resources excessively. The natural reservoirs of fossil fuels are decreasing day by day and harming the environment as well in the form of gas emissions. Johnnie Walker should consider these factors and practice green initiatives to protect the environment as well as natural resources. Excessive use of electricity and water is not favorable for the image and reputation of Johnnie Walker.
Legal Factors – PESTLE Analysis of Johnnie Walker
Employee Protection Laws:
As an international organization, Johnnie Walker must follow safety and labor laws. Some countries have strict labor laws. By giving a safe working environment to workers, Johnnie Walker can reduce the risk of any challenge. Moreover, it should also focus on labor wage rates and anti-discrimination laws. In short, Johnnie Walker must protect its workers in order to create harmony among workers.
Consumer Protection Laws:
Data protection is one of the most important things when it comes to consumer protection laws. It is a responsibility of a company to secure and protect the data of its customers. For this purpose, the company should read the consumer protection laws carefully. On the other hand, the company should follow quality laws, pricing laws, and fraudulent claims. In this way, Johnnie Walker can keep its customers intact.
Intellectual Property Rights (IPR):
In order to protect the companies’ innovative ideas and patents, intellectual property rights play a huge role. If a country is unable to protect the intellectual property rights of a company, then the company should avoid these countries from doing business. This thing can weaken the position of a company like Johnnie Walker in the competitive market. As a result, other companies can take the lead which is not good for the profitability and brand image of Johnnie Walker. Protecting intellectual property rights is a must for a country in which you are operating; otherwise, it is not suitable for international organizations and investors.
Conclusion – PESTEL Analysis of Johnnie Walker
To shape the business, Johnnie Walker should utilize PESTLE tool to get a detailed analysis of the business on both micro and macro levels. Each factor in this tool is a wonderful way to highlight the favorable and unfavorable conditions for the company. This thing will make the decision-making process easier for the company and it can gain a competitive edge in the market.
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