PESTLE Analysis of Tenaga Nasional | The Largest Power Company in Malaysia

Tenaga Nasional PESTLE Analysis

by Shamsul
Tenaga Nasional PESTLE Analysis
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PESTLE Analysis of Tenaga Nasional


The PESTLE analysis of Tenaga Nasional contains all the macro-environmental factors, such as political, economic, social, technological, legal, and environmental. These factors impact the business of Tenaga Nasional on a large scale. No doubt, Tenaga Nasional is the largest electric and power company in Malaysia.

It is necessary to conduct a PESTLE analysis for companies like Tenaga Nasional. It helps to identify the macro business environment of the company in which it operates. The company operates in such a competitive environment. Any factor, such as consumer spending behavior, exchange rate, or regulation, can put the company’s performance in danger. Here is the complete PESTLE analysis of Tenaga Nasional:

Political Factors | PESTLE Analysis of Tenaga Nasional

Political factors mostly involve the government and other institutions such as political parties. They hugely impact the business performance of companies like Tenaga Nasional. The intervention of these institutions can stop the growth of the company. So, the role of these institutions plays an important role in the business of the company. Here are some important political factors that influence Tenaga Nasional:

There is no armed conflict in Malaysia. It is a safe country for doing business. The government has strong relations with the military. Moreover, there is no tension between Malaysia and its neighboring countries. But, any change in the political system of Malaysia can cause difficulties for Tenaga Nasional.

Whether government or non-government organizations, the stakeholders in Malaysia are very happy with the government. Their activists and policymakers are contributing well. It is a great opportunity for Tenaga Nasional to collaborate with other companies to enhance its business operations. They have a chance to contribute to the economy of Malaysia by strengthening their operations.

The current government of Malaysia is trying to make effective policies for the companies, especially for the energy and power sector. They are providing them with all the resources that can contribute to their success. In short, the Malaysian government is doing its best to boost its economy and electricity sector.

The current government is very supportive, but it is hard to predict the upcoming government. So, it is a major political factor that can make or break the company’s business performance in the long run. All in all, the company is susceptible to change of government.

Currently, the Malaysian government is under the immense presence of the world, such as the WTO. They are creating strict rules for electric and power companies on electric utilities.

Over the years, the company has exploited a lower taxation policy which results in an increase in its revenue. They have invested so much in research and development. It shows that Tenaga Nasional is a profitable company. However, the government is imposing heavy taxes on electric utilities. This is because to promote greener energy.


Economic Factors | PESTLE Analysis of Tenaga Nasional

Factors like inflation, labor condition, interest rate, taxation rate, consumer disposable income, and exchange rate are some of the most important economic factors when conducting a PESTLE analysis. Below, we have curated a list of economic factors that impact Tenaga Nasional’s business most:

1. Malaysia’s economic condition is directly related to the economic performance of Tenaga Nasional. In recent years, the company has improved its economic performance through globalization. They have used all of the resources to fulfill the requirements of the consumers.

2. The liberalization policy of the country can allow the company to invest in other areas of energy and power.

3. Over the years, the Malaysian government has invested so much in its business infrastructure to facilitate companies. So, the success credit of Tenaga Nasional goes to the national government of Malaysia. The company can exploit this infrastructure to enhance its business further.

4. The changing exchange rates can destroy the company’s present and future investment plans.

5. Generally speaking, the overall economic performance of Malaysia is not that bad. They have a stable economic position even after the covid-19. It is a great chance for Tenaga Nasional to invest in new companies or sectors.

6. In Malaysia, the disposable income of consumers is stable. However, any change in this factor can negatively impact the company’s business plans. It is essential for Tenaga Nasional to keep a close eye on the spending behavior of consumers.


Social Factors | PESTLE Analysis of Tenaga Nasional

Every culture or society has its own method of running a business. However, social factors can play a major role in the company’s business performance. It is necessary for Tenaga Nasional to understand its consumers and their values. They should identify their preferences. Attitudes towards a certain service or product, societal roles, culture, traditions, demographics, norms, and gender roles are some of the most important social factors.

1. The role of media and social sites is huge in the business performance of companies like Tenaga Nasional. They can make them popular and advertise their services. In Malaysia, both modern and traditional media are so popular. The company can use this to promote its brand, products, and services.

2. In Malaysian society, gender roles are getting traction. It is important for Tenaga Nasional to support gender roles because it can promote business and performance.

3. The Malaysian people are very conscious of health and safety. This is because of the increasing trend of liberalization. Tenaga Nasional should focus on health and safety factors because it is important to maintain the customer base.

4. Regarding demographics, most people are on the side of Tenaga Nasional. Without any doubt, Malaysia is a growing country with hardworking people. The company should focus on other services to fulfill the needs of consumers.

5. In Malaysia, people love to accept new things in utility services. The Malaysian government has been investing in public services as well.

6. Over the last few years, it has been noticed that income inequality has been increasing day by day. This is good for the country because it breaks Malaysia’s power structure.


Technological Factors | PESTLE Analysis of Tenaga Nasional

Nowadays, almost every company or business utilizes new technologies to streamline its business performance and operation. Technological advancement can improve the business of Tenaga Nasional in many ways. The company can improve its supply chain by using advanced technology. They can offer innovative services to consumers using technology. The following are some important technological factors that can impact the performance of Tenaga Nasional:

1. If we talk about the impact of technology on the utility sector, you will be surprised to know that it has changed the way of doing business in Malaysia. The development in mobile technology has allowed customers to know more about the companies like Tenaga Nasional. The company is trying to meet consumers’ expectations by exploiting the latest technologies. This will help Tenaga Nasional to stay ahead of the competition.

2. It is imperative for the company to focus on the enhancement and development of 5G and its potential. It can help the company improve users’ customer experience in the energy and power sector.

3. It is really necessary for Tenaga Nasional to focus on its competitors in order to know which technology they are using to take their business or performance one step ahead. This will help the company to use that technology to streamline its business operations globally.

4. With the help of technology, Tenaga Nasional can find new ways to lower their electricity production cost. They can also restructure their supply chain in order to meet the needs of consumers.

5. The latest technology can help the company to get the right information. They can easily identify how to improve the business. It will bring a major growth opportunity for Tenaga Nasional in the electricity sector.

6. Right now, the Malaysian government is highly protective regarding protecting intellectual property rights. This will encourage other electric companies to invest in new ventures and research & development.


Legal Factors | PESTLE Analysis of Tenaga Nasional

Legal factors play an essential role in the growth or expansion of a company like Tenaga Nasional. The company should focus on all legal affairs to prevent the risk of lawsuits and backlash. The company should analyze data protection, copyright, intellectual property, labor, and discrimination laws and justice. Here are some important legal factors:

1. As a national company, it is necessary for Tenaga Nasional to analyze all the important laws regarding IPR, copyrights, and patents. If the company doesn’t follow these rules, these factors can impact its business.

2. The company should identify the health and safety norms in Malaysia. The company should try to meet these norms at any cost.

3. What are the employment laws in Malaysia? How can they impact the business? The company should identify these factors as well.

4. First of all, it is important to avoid the risk of any controversy and lawsuit. The court proceedings can kill the company’s time, which can impact its revenue or profit.

5. What are the environmental laws in Malaysia? As a company, it is your responsibility to follow these laws to avoid the danger of any problem.

6. It is very satisfactory for companies like Tenaga Nasional that the Malaysian government protects data and IPR.


Environmental Factors | PESTLE Analysis of Tenaga Nasional

For businesses, environmental laws and factors have become more critical. Government and environmental activists are putting immense pressure on these companies so that they can reduce their greenhouse gas emissions. There are so many factors in this regard to consider:

1. By investing in renewable energy sources, Tenaga Nasional can easily handle pressure from environmental activists. The government is subsidizing companies in this matter so that they can produce renewable energy.

2. The company should make its supply chain system more flexible. This allows the company to reduce its cost.

3. Tenaga Nasional should follow the Paris Climate Agreement.

4. Environmental standards are also increasing the company’s operation cost.

5. These days, customers are very well-informed. They know their rights. It is necessary to satisfy the customers by producing greener energy.


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