Colgate-Palmolive is a consumer products manufacturing American multinational company. William Colgate founded the consumer product, dental hygiene product in 1806. Today, we’ll discuss the PESTLE analysis of Colgate; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Colgate
Some of the main political factors in the Colgate PESTLE analysis are as follows;
I-Government Departmental Scrutiny
FDA (Federal Drug Authority) in the USA and EMA (European Medicine Agency) in Europe set guidelines and product safety standards for products and goods. Colgate-Palmolive should avoid making any misleading claims about its products in the product description and the marketing and advertisement campaigns. They carefully scrutinize the product description and its marketing and advertisement campaigns; any type of non-compliance would have serious consequences on the consumer goods brand.
II-International Trade Agreement
Along with departmental scrutiny, Colgate-Palmolive should also keep in mind the international trade agreements of various regions and countries. For instance, NAFTA, USMCA, Europe and Asia, Middle-East and Africa, and South East Asian countries alliance. Since the hygienic brand is operating its business in various countries across the globe; the regional trade alliance helps the company to smoothly perform its various operations without any delays and disruption.
III-Political Stability
The stable political environment is highly significant for the business operation of Colgate-Palmolive. This is because the consumer goods manufacturing brand sources raw materials and supplies from various regions and countries across the globe. However, political instability would result in the form of delays and disruption of products and goods.
Economical Factors Affecting Colgate
Some of the main economic factors in the Colgate PESTLE analysis are as follows;
I-Currency Exchange Rate
According to an estimate, approximately 70% of Colgate-Palmolive’s revenue comes from outside the US. The currency exchange rate of different countries relevant to the USD is different and it keeps on fluctuating daily. A small increase in exchange would increase the raw material cost and a decrease its exchange would negatively impact the sales and profitability of the company.
II-Consumer Spending
Consumer spending on personal hygienic products like Colgate-Palmolive has increased significantly for the past few years. The consumer products manufacturing brand should keep in mind various consumer spending trends. It allows the company to amplify the growth and sales of the brand in various regional markets.
Social Factors Impacting Colgate
Some of the main social factors in the Colgate PESTEL analysis are as follows;
I-Hygienic Trends
The consumer market has become highly cautious and sensitive about their personal care and hygiene. According to an estimate, approximately 77% of customers have become more cautious about their personal hygiene than ever before. It presents a significant growth opportunity for the personal care brand Colgate-Palmolive to keep developing hygienic products relevant to the growing consumer market trends.
II-Aging Population
The population over the age of 65 years old has been increasing significantly. They require soft oral hygienic products relevant to their specific needs and requirements. Gum care products and sensitive toothpaste would help the company to serve and cater to the needs of particular types of older customers.
Technological Factors Affecting Colgate
Some of the main technological factors in the Colgate PESTEL analysis are as follows;
I-Product Innovation
According to an estimate, Colgate-Palmolive invests approximately 1.7% of its annual sales in research and development. It shows the company’s strong commitment to product innovation and developing unique products for customers. They could be electric toothbrushes, organic toothpaste, soft brushes, and online platforms. The product innovation would help the company to keep up with the growing customer market trends.
II-Digital Marketing & E-commerce Platform
Colgate-Palmolive has developed an e-commerce platform to provide online shopping options to customers and keep up with the growing market trends. The personal hygienic brand invests a significant amount of capital resources on digital marketing campaigns to connect and engage with customers.
Legal Factors Impacting Colgate
Some of the main legal factors in the Colgate PESTEL analysis are as follows;
I-Product Safety Standards
The government regulations and standards are very strict and tough for product safety. Colgate-Palmolive should comply with the product safety regulations of its consumer goods, personal, and oral care products. Any type of non-compliance would attract heavy lawsuits, fines, and penalties along with a negative brand reputation. For instance, the regulatory department requires the company to give the property details of all the ingredients used in the product.
II-IPR
Along with regulatory compliance, Colgate-Palmolive should protect the intellectual property rights of its products. For instance, the company has formulation patents for detergents, soap, and toothpaste; which helps the company to maintain exclusive products in the market without risk.
Environmental Factors Affecting Colgate
Some of the main environmental factors in the Colgate PESTEL analysis are as follows;
I-Sustainable Packaging
Colgate-Palmolive is highly careful about environmental sustainability and the protection of nature. The consumer product brand has taken various steps towards environmental sustainability comprising of saving water, reusable, recycling, organic packaging, and others. It shows the company’s strong commitment to the nature and the environment.
Conclusion: Colgate PESTLE Analysis |PESTEL Analysis of Colgate |External Environmental Analysis of Colgate | Strategic Analysis of Colgate
After an in-depth study of the pestle analysis of Colgate-Palmolive; we have realized that Colgate-Palmolive is the world’s leading personal hygienic and consumer goods manufacturing brand. If you are learning about the Colgate PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
