PESTEL Analysis of AmerisourceBergen Corporation
PESTEL is a great strategic planning tool that mainly targets the external business factors of a company. It stands for political, economic, social, technological, environmental, and legal factors. These factors can influence the business and performance of AmerisourceBergen in both positive and negative ways. The impact of these factors is huge on AmerisourceBergen. Moreover, they can also effect the working of other companies in the drug wholesale industry. Let’s ready the PESTEL analysis of AmerisourceBergen Corporation.
Organizations like AmerisourceBergen can use this tool to shape their business strategy to take market competitiveness. This tool also helps to identify the operating challenges present in the market. For example, if a company is operating in an unstable economic environment, then it can’t take the required boost. But, if it is working in a regular economic cycle, it can achieve both short and long-term objectives.
Let’s start with the PESTEL analysis of AmerisourceBergen Corporation.
Political Factors | PESTEL Analysis of AmerisourceBergen Corporation
The impact of the political factor on the profitability and long-term goal of AmerisourceBergen is huge. It is a defining factor for the company’s overall image and its working. However, political stability is necessary for achieving long-term objectives without any tension in any market. Being a drug wholesaler, it is crucial for AmerisourceBergen to follow all the governmental rules and regulations being neutral. Involvement with any political party or pressure group can down the image of AmerisourceBergen in the eyes of people. Moreover, there are hundreds of political factors that can highly disrupt the performance of AmerisourceBergen. Before venturing into a new market, the organization should analyze its political system and political stability.
Here, we have listed down some important political factors that AmerisourceBergen should carefully analyze,
- Value of drugs whole companies in the country and government and political stability.
- Influence of army and risk of invasion.
- Corruption level in both government and private sectors.
- Role of bureaucracy and its efficiency.
- Legal infrastructure for agreements and smooth working.
- Tariffs, trade regulations, and other related factors.
- IPR (Intellectual Property Rights).
- Suitable business or trading partners.
- Antitrust laws about drugs wholesale.
- Pricing strategy, is there any pricing mechanism in the country?
- Incentives, tax rates, and taxation.
- Wage levels and legislation, overtime, and minimum wage.
- Working hours.
- Employee benefits.
- Rules regarding industrial safety.
- Labeling of products and other similar requirements.
Economic Factors | PESTEL Analysis of AmerisourceBergen Corporation
The impact of economic factors is also very grave on the overall working of AmerisourceBergen. There are numerous economic factors such as foreign exchange rate, inflation, savings rate, etc. They determine the actual growth and expansion of AmerisourceBergen. If anything happens with the economy of the country, then it will create a negative impact on the company. It is imperative for AmerisourceBergen to analyze different economic aspects like the growth rate and GDP of the country before entering. Below, we have mentioned some vital economic factors that the firm should take into consideration,
- What kind of economic system the country follows in which you are operating?
- Check the stability of the economic system in the country.
- Check the level of government intervention.
- The efficiency of the economy, especially in the drug wholesale sector.
- Quality infrastructure in the drug’s whole market.
- Comparative Benefits of the country.
- The competence level of workers, particularly in drug wholesale.
- Literacy level in the country.
- Productivity and labor costs.
- Business cycle.
- Interest rates.
- Economic growth rate.
- Unemployment level.
- Flexible income.
Social Factors | PESTEL Analysis of AmerisourceBergen Corporation
People’s behavior towards a brand or product is another important thing that can change the way of doing business for AmerisourceBergen in the country. Still, in some regions, people prefer services or products on the basis of their attitudes and beliefs. AmerisourceBergen should analyze people’s behavior and norms before starting its business in any country. The following are some most important social factors that AmerisourceBergen must consider,
- Skill level of people and demographics.
- The power structure, class structure, and hierarchy in the country.
- Standard of education and level of education.
- Culture such as social conventions and gender roles.
- Entrepreneurial skills and overall business nature of the society.
- Attitudes towards environment and health.
- Leisure preferences.
Technological Factors | PESTEL Analysis of AmerisourceBergen Corporation
It is hard to stay up-to-date all the time because technology is an ever-evolving thing. Indeed, for some companies, technology can create all the differences in different sectors. It is a digital era and AmerisourceBergen should exploit the latest technology to take a competitive edge over competitors. There are so many established players in the market that have taken advantage of technology to enhance their profitability and revenue stream. Every company is moving toward automation. So, AmerisourceBergen should conduct its technical analysis to identify where it needs improvement. By taking benefit of the latest technologies, the company can give tough competition to others. AmerisourceBergen should involve the following technological factors in its analysis.
- Recent technological advancement,especially by the competitors.
- Impact of technology on product offerings.
- The Impact of technology on cost system, especially in drug wholesale.
- Impact on value chain system.
- The diffusion rate of technology.
Environmental Factors | PESTEL Analysis of AmerisourceBergen Corporation
Environmental factors change in different countries or markets. Some countries have different environmental norms according to their weather pattern. Nowadays, environmental factors can hurt the business case of not following climate change agreement. Moreover, there are several liability laws and environmental laws that can create serious trouble for AmerisourceBergen. Before venturing into a new market, the firm should evaluate its environmental standards in order to avoid any legal action or hatred from people.
- Climate change.
- Weather patterns.
- Laws regarding pollution.
- Water and air pollution, particularly in the drug wholesale sector.
- Renewable energy sources.
- Endangered species.
- Waste management.
- Attitude towards eco-friendly and greener products.
Legal Factors | PESTEL Analysis of AmerisourceBergen Corporation
In some regions, legal frameworks and organizations are not so powerful to protect the IPR of the company. However, it would be a challenge for AmerisourceBergen to enter such markets and work in. In case of violation, the company can face lawsuits and legal actions that are not good for the reputation of AmerisourceBergen. Consider the following factors before entering new markets,
- Antitrust laws.
- Data protection laws.
- Safety and health laws.
- Ecommerce and customer protection.
- Employment level and laws.
- Discrimination laws.
- Intellectual property law, copyrights, patents.
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