PESTEL Analysis of UnitedHealth Group

UnitedHealth Group PESTLE

by Shamsul
UnitedHealth Group PESTLE
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PESTEL Analysis of UnitedHealth Group

This PESTEL analysis of UnitedHealth Group will largely highlight the macro business environment of the company. PESTEL is the short form of political, economic, social, technological, environmental, and legal factors. They have a huge impact on the business performance of UnitedHealth Group. A slight change in these factors can directly impact the company’s business operations and processes. They can also hurt the entire healthcare and insurance sector in the world.

PESTEL is a great tool for analyzing all the aspects of a business. All these factors are external factors and help to find the external business environment of the company. Let’s have a deep look at it!


Political Factors

Without any doubt, political factors greatly impact how any organization does business. The overall profitability of UnitedHealth Group is dependent on this one factor. Being an international company, they face different challenges in different countries. In other words, the company depends on the political system and environment of the country in which it operates. A company like UnitedHealth Group can’t operate smoothly in a saturated political environment. It is necessary for UnitedHealth Group to closely analyze the following political factors before venturing into a specific market.

  • Don’t forget to analyze the political system and its stability in the country, plus, the importance of insurance and healthcare plans in the region.
  • Level of exploitation in the country, especially in the healthcare industry.
  • The intervention of healthcare institutions and bureaucracy.
  • Legal structure or procedure for contract implementation.
  • IPP (Intellectual Property Protection).
  • Tariffs and trade regulations in the healthcare sector.
  • Preferred trading associates.
  • Anti-trust laws.
  • Pricing strategies and regulations.
  • Incentives and tax rates.
  • Overtime and minimum wage policies.
  • Work week limitations.
  • Employee benefits.
  • Safety regulations in the health and insurance sector.
  • Labeling and other related complexities.

Economic Factors

So many economic factors directly impact the business of companies like UnitedHealth Group. They are exchange rate, saving rate, foreign exchange rate, and inflation rate. They are responsible for the smooth working of the company. Competition standards are the micro business factors that influence the competitive advantage in the market. In order to predict economic trends, UnitedHealth Group should understand several factors such as growth rate, customer spending power, and inflation rate. We have summed up some economic points below:

  • What kind of economic system the country follows? Don’t forget to analyze its stability as well.
  • Intervention from the government institutions in the healthcare and insurance sector.
  • How effective are financial markets in the country? Should they raise capital in the market or not?
  • What is the quality of infrastructure in the healthcare and insurance sector?
  • What are the opportunities for host companies in the country’s economy?
  • How skilled is the workforce in the industry?
  • What is the literacy rate in the country?
  • What are the labor costs and overall productivity level?
  • Recession
  • Recovery rate
  • Prosperity rate
  • Interest rates
  • Economic growth rate
  • Inflation
  • Unemployment trends
  • Flexible income

Social Factors

Population and culture are two crucial aspects of social factors. Society plays a huge role in making or breaking a company’s success. Customer preferences and shared beliefs are also very important for the company’s overall functioning in the competitive market. UnitedHealth Group should conduct surveys to understand the customers’ needs and pain points. As a result, they can make an effective marketing strategy to engage with the audience. The organization should incorporate the following social factors into this PESTEL analysis:

  • Skill level of the people and demographics.
  • Power and class structure in society.
  • Education standard in the country and education level.
  • Gender roles.
  • Social conventions.
  • Spirit for startups and individual businesses.
  • Attitude towards health and environment.
  • Leisure preferences.

Technological Factors

Today, the thing that is disrupting businesses is technology. We want to give an example from the transportation industry. Lyft and Uber have completely transformed the concept of taxi service. Now, people prefer these innovative services over traditional taxis. Moreover, automotive companies are manufacturing electric vehicles and Tesla is one of the biggest examples. Being a healthcare company, it is imperative to constantly innovate by investing in the latest technologies and infrastructures. This is the only way to make your business relevant and profitable. Don’t forget to take the following technological factors into your consideration:

  • Technological advancements have been made in the health and insurance sector in recent years.
  • Rate of technological advancement in the country, more specifically in the industry.
  • Cost structure in the industry related to technology.
  • Impact of technology on the supply chain and production units.
  • Diffusion of technological advancements.

Environmental Factors

Every market has its own standards and trading norms. The case goes the same for the environmental standards. It is an important factor that can impact a company’s business operations. Before penetrating any country, UnitedHealth Group should understand its liability and environmental laws. The environmental laws in North America are quite different than European countries. We have summarized some key environmental factors that you should evaluate before entering new regions or countries:

  • Climate change.
  • Changing weather.
  • Recycling and waste management.
  • Environment pollution.
  • Approach towards green products and services.
  • Efforts for manufacturing renewable energy sources.
  • Air pollution.
  • Water pollution.
  • Rare species.

Legal Factors

In several countries, the legal system or framework is not so strong. Due to this reason, they fail to protect the IPRs (Intellectual Property Rights) of the companies. A company like UnitedHealth Group should carefully investigate these factors before making a big move. The company’s overall competitive advantage and profitability depend on this factor. The following are some important legal factors to consider before starting your business in a new market:

  • Anti-trust laws in the health and insurance sector.
  • Discrimination laws (from the beginning of the career, promotion, and retirement).
  • Intellectual property laws.
  • Copyright.
  • Patents.
  • Employment laws.
  • E-commerce and consumer protection.
  • Customer service.
  • Safety laws.
  • Health laws.
  • Data breaches.
  • Data protection laws.

We hope this PESTEL Analysis of UnitedHealth will serve you for the study purpose. Keep reading this post to better understand the UnitedHealth Group business.

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