PESTLE Analysis of ONGC | Committed to India’s Energy Security


by Shamsul
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PESTLE Analysis of ONGC

Oil and Natural Gas Corporation is one of the well-renowned Indian energy and power companies. It is crucial for the managers of ONGC to occasionally analyze the company’s business performance to predict the market condition. They can take appropriate decisions to boost the profitability of the company. In this matter, PESTLE is the ideal business analyzing tool which helps to uncover its political, economic, social, technological, legal, and environmental factors. Here is the detailed PESTLE analysis of ONGC.

ONGC is a full-fledged petroleum company with plenty of offerings. It is one of the most profitable corporates of India. In ONGC, the government of India holds 75 percent of the equity stake. Change in government policies creates a huge impact on the company’s business operations. It is one of the reasons that political factors have a great impact on the company.

Moreover, for profitable growth, political stability is crucial. Pricing strategies also create a huge mark on the productivity of ONGC. The portion of government budgets also holds a severe impact on the company.

Economic Factors | PESTLE Analysis of ONGC

Since its beginning, the company has produced billions of cubic meters of gas and millions of metric tons of crude oil. But, the need for oil and gas is growing day by day, which is a good sign for the company’s earnings. There is no doubt about it that ONGC is one of the most valuable players in the Indian market. It produces 80 percent of natural gas and 75 percent crude oil. A higher employment rate will also increase the demand for these products. But, they need to invest in the workforce in order to bring efficiency in its performance. Factors like monetary policy and fiscal changes can cause some trouble for the organization. Currency rates and oil prices in the international market could also affect the company in many ways. These economic factors can lead to big trouble, and the company should analyze them carefully.

Social Factors | PESTLE Analysis of ONGC

Societal factors like gender, income distribution, and ages play a big role in the working of ONGC. If the company make policies according to these factors, then it could be helpful for ONGC. They can readjust their marketing strategy to provide the best. The overall education level of people is also important for the operation of ONGC. People’s attitude towards safety and health shows the customers’ spending power. The rising sustainability campaigns can also change the perception of people. The company must adopt green initiatives to satisfy environmentalists. The company should revisit its pricing strategy in order to retain customers because it plays a huge role in this perspective.

Technological Factors | PESTLE Analysis of ONGC

Technology is ever-evolving, and companies like ONGC should exploit the latest technologies for producing products. Technology helps you to set the competitiveness in the market. Any company can take the lead in the competitive market by utilizing innovative technologies. However, the company is investing heavily in research and development programs. Technological advancement is necessary to satisfy the demands of modern customers. They can introduce mobile payment systems and other related technologies to make customer’s life easier.

Legal Factors | PESTLE Analysis of ONGC

The company is highly susceptible to lawsuits. Several regulations and laws surround the company, such as anti-trust laws, trade practices, government regulations, security laws, etc. Health and safety laws are also important that companies should keep in mind. The main thing is that these laws and regulations differ from one country to another. So, it is very tough to operate in such conditions. ONGC should follow all the rules and regulations to avoid lawsuits because they are not suitable for its image. Also, the oil and gas sector encompasses strict laws and the company should be careful about them.

Environmental Factors | PESTLE Analysis of ONGC

The impact of oil and gas is enormous on our world and the environment. So, environmental laws pose a big challenge for the company. Such rising concerns could slow down the business and revenue of the company. As a result, they can’t achieve their long-term goals. The company can take eco-friendly initiatives to reduce its carbon footprint as well as waste. They should follow environmental laws to avoid pressure from pressure groups. ONGC management should think about renewable energy sources to make customers happy. They have a lot of scope in this segment and they can enhance their expansion and profitability.

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