PESTEL Analysis of McKesson Corporation
To analyze the external business environment of McKesson, PESTEL is one of the most valuable and proven tools that help to recognize political, economic, social, technological, environmental, and legal factors. These are crucial business factors that can impact the working system as well as the revenue flow of a company like McKesson. So, managers at McKesson should exploit this tool to identify potential opportunities and threats. Let’s workout on the PESTEL Analysis of McKesson Corporation.
McKesson Corporation is one of the leading American distributors of pharmaceuticals and health information technology. Certainly, it provides care management tools and medical supplies. The impact of PESTEL factors is not only on McKesson but also on the other market companies. Conducting a PESTEL analysis will give you an idea of how to boost profitability by reducing hurdles. PESTEL also provides clear information about current market challenges that McKesson is going to face in the future.
A highly stable political and economic environment is ideal for the ultimate growth of companies like McKesson. There are so many other advantages of performing a PESTLE analysis of your company that you can read below.
Political Factors | PESTEL Analysis of McKesson Corporation
Different countries have different political systems. Some countries have stable political systems and few have unstable governments. An unstable political system brings so many dangers and risks for foreign companies like McKesson. They can hurt the company’s long-term profitability in a matter of seconds. Being an international firm, McKesson is highly vulnerable to political risks. To gain a competitive advantage in any country, McKesson should assess the given political factors,
- Product labeling.
- Risk of invasion from other political parties or military.
- Political system in the country.
- Preferred trading partners.
- Incentives and taxation.
- Safety regulations.
- Legal infrastructure.
- Antitrust laws.
- Intellectual property protection.
- Overall corruption level in the country, especially in drug wholesale.
- Tariffs and trade limitations.
- Pricing limitations.
- Necessary employee benefits.
Economic Factors | PESTEL Analysis of McKesson Corporation
PESTEL efficiently identifies the economic factors of an organization. Some important economic factors like inflation and foreign exchange rates can instantly destroy the business and its profitability. They help to decide companies like McKesson whether this country is ideal for investment or not. It also helps to uncover important economic factors like growth rate and interest rates necessary for a company’s smooth working. Keep reading to check some vital economic factors that McKesson must identify,
- Interest rates.
- Economic growth.
- Discretionary income.
- Quality infrastructure.
- Efficiency and labor costs.
- Recession.
- Recovery rate.
- Type of economic infrastructure in the country.
- Intervention from the government in the drug whole sector.
- Comparative benefits.
- Stability of economic or financial system in the country.
- Skill level of employees.
Social Factors | PESTEL Analysis of McKesson Corporation
Social norms and the overall culture of the society plays a major role in defining the success of any company. In 21st century, people still buy those products based on their beliefs and attitudes. McKesson needs to design a specific business strategy that works in different societies and cultures without creating further challenges. In PESTEL, managers must uncover the following social factors before entering a new market,
- Leisure interests.
- Gender roles.
- Social convention.
- Culture.
- Attitude toward health.
- Attitude toward the environment.
- Overall education level in the country.
- Entrepreneurial spirit.
- Skill level of people.
- Demographics.
Technological Factors | PESTEL Analysis of McKesson Corporation
Indeed, for better working and running a business in a smooth way, it is necessary for McKesson to adopt the latest technologies. So, the organization can increase its revenue flow and business by working with advanced technology. Every company is updating its technological infrastructure in order to take competitiveness in the industry. McKesson must analyze the following technological factors,
- Latest technological advancements made by companies.
- Impact of technology on product development and current offerings.
- Diffusion of technology.
- Technology’s impact on cost structure.
- Impact on value chain system.
Environmental Factors | PESTEL Analysis of McKesson Corporation
These days, everyone is highly concerned about the environment. The government is imposing strict environmental laws on companies in order to reduce carbon footprint and emission rate. Companies like McKesson must evaluate the country’s environmental regulations before operating in it. McKesson is highly exposed to environmental and liability laws. Before conducting the PESTEL analysis of McKesson, you should evaluate the following environmental factors,
- Environmental change.
- Overall weather.
- Laws regarding pollution.
- Air, water, and environmental pollution.
- Recycling.
- People’s attitude toward eco-friendly and green products.
- Efforts in making renewable energy sources.
- Waste management especially in drug wholesale.
- Endangered species.
Legal Factors | PESTEL Analysis of McKesson Corporation
There are so many countries in the world that have different legal infrastructures. The legal institutions are not so influential in these countries. This thing makes these countries highly unfavorable for doing business. A company like McKesson Corporation should wisely analyze important legal factors before starting working in these countries. Here are some vital legal factors that McKesson must take into account,
- Health laws.
- Safety laws.
- Data protection.
- Copyright and intellectual property law.
- Employment laws.
- Anti-trust laws, especially in the healthcare industry.
- Discrimination laws.
- Online platforms and consumer rights.
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