P&G (Procter & Gamble) Company is a consumer goods manufacturing American multinational company. James Gable and William Procter founded the consumer goods company in 1837. Today, we’ll discuss the PESTLE analysis of P&G; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting P&G
Some of the main political factors in the P&G PESTLE analysis are as follows;
I-Government Trade Policies
P&G (Procter & Gamble) is operating its business in approximately 188 countries across the globe. The trade policies of different countries are different due to various regional alliances like NAFTA, EU, ASIAN, and others. The consumer goods manufacturing brand should comply with the trade policies of different countries to avoid any type of restrictions.
II-Political Stability
A stable political environment is the basic foundation for companies to smoothly perform their business operations without any delays and disruptions. For instance, political instability like riots, political processions, roadblocks, and other types of conflicts would cause supply chain and distribution disruption.
III-Import and Export Tax
The goal of nationalistic governments is to promote local brands and businesses. In order to discourage international brands and businesses, they introduce various types of import and export policies, documentary requirements, and taxation. P&G (Procter & Gamble) should be aware of changes in power in various countries so that they can adjust their business operations accordingly.
Economical Factors Affecting P&G
Some of the main economic factors in the P&G PESTLE analysis are as follows;
I-Economic Recession
The global economy has been going through an economic recession for the past few years. The worldwide lockdown and shutdown of businesses have caused mass unemployment across the globe. It has decreased the consumer spending and the sale of businesses and companies. People don’t want to spend their limited income lavishly.
II-Currency Exchange Rate
The currency exchange rate market is highly volatile and it keeps on fluctuating daily and regularly. P&G (Procter & Gamble) is operating its business worldwide; a small in-currency exchange rate would impact the retail price of consumer goods and the company’s sales and profitability when it’s converted back into the USD.
III-High Inflation
Various international political and economic issues have significantly increased the inflation rate across the world. As a result, the price of consumer goods for daily routine life has increased and it made them unaffordable to a great number of ordinary working people. They don’t take such things lightly, and they shift their attention to alternative low-cost products.
Social Factors Impacting P&G
Some of the main social factors in the P&G PESTEL analysis are as follows;
I-Aging Population
The elderly people and the aging population have been increasing significantly for the past few years. It is due to the advanced medical and healthcare system. It presents a great opportunity for the consumer goods brand P&G (Procter & Gamble) to develop products for elderly people. They could be in the form of dietary supplements, and other casual assisting products to make their lives simpler and easier.
II-Health and Hygiene Trends
The health, fitness, and hygiene trends have been increasing greatly. It is due to the fact that people want to live a healthy lifestyle, and they prefer buying hygienic and healthy products that would make them healthier. However, P&G (Procter & Gamble) offers a wide variety of products in the health and hygiene category; the company needs to retarget the customer market.
III-Consumer Preferences
The consumer market trends and preferences keep on changing due to various socio-cultural factors. For instance, the consumer market has become highly cautious about environmental sustainability. They prefer to buy from such brands and companies that are environmentally sustainable and not damaging the environment.
Technological Factors Affecting P&G
Some of the main technological factors in the P&G PESTEL analysis are as follows;
I-E-commerce and Digital Marketing
P&G (Procter & Gamble) invested a significant amount of capital resources in the development of its e-commerce platform to target online shoppers. According to an estimate, approximately 35% of the company’s revenue came from the online store and e-commerce platform. The consumer goods brand is also employing AI, ML, and data analytics to offer personalized product recommendations and suggestions to the end consumers.
II-Innovative Products
P&G (Procter & Gamble) has invested a great amount of capital resources in the development of eco-friendly and sustainable products relevant to the needs and requirements of the customer market. They focus on decreasing the usage of virgin petroleum plastic in the packaging of products by approximately 50%. The company is also introducing refillable bottles for water to decrease environmental waste.
III-AI, Automation, and ML
P&G (Procter & Gamble) is employing the latest and advanced technology like AI, ML, automation, and data analytics. It allows the company to achieve production efficiency decrease the operational cost and develop new products for customers. However, the predictive analysis helps the company to ensure the right quantity of stock at the right time to avoid stock out during the season.
Legal Factors Impacting P&G
Some of the main legal factors in the P&G PESTEL analysis are as follows;
Regulatory Compliance
P&G (Procter & Gamble) should comply with the regulatory requirements of different countries. They comprise protecting the product formulation with IPR and patent, import and export laws of different countries, trade policies, and other regulatory requirements. Compliance with legal and regulatory requirements would help the company to smoothly perform its various operations and timely deliver the finished goods to the end consumers.
Environmental Factors Affecting P&G
Some of the main environmental factors in the P&G PESTEL analysis are as follows;
Sustainability Initiative
P&G (Procter & Gamble) has made a strong commitment to environmental sustainability. Consumer goods manufacturing has taken various initiatives towards environmental sustainability. They’re like renewable sources of energy, biodegradable packaging, and local material sourcing to reduce the emission of carbon.
Conclusion: P&G PESTLE Analysis |PESTEL Analysis of P&G |External Environmental Analysis of P&G | Strategic Analysis of P&G
After an in-depth study of the pestle analysis of P&G (Procter & Gamble); we have realized that P&G (Procter & Gamble) is the world’s leading consumer goods brand. If you are learning about the P&G 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.
