PESTLE Analysis of Paper Industry | Business Management & Marketing

Paper is a thin material sheet produced by the chemical processing of cellulose fibers derived from grasses, rags, dung, and other vegetable sources in water. The Paper Industry dates back to the 2nd century BCE in China. Some of the main paper-based products are egg boxes, cartons, ruled paper, toilet paper, and books. Today, we’ll discuss the PESTLE analysis of Paper Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.

Some of the paper producing countries are as follows;

Indonesia
Brazil
Sweden
Finland
South Korea
Canada
Germany
Japan
USA
China

Political Factors Impacting Paper Industry

Some of the main political factors in the Paper Industry PESTLE analysis are as follows;

I-Government Regulations

The government regulations are very strict and tight for the Paper Companies. They comprise of labor laws, deforestation risks, production and manufacturing standards, contribution to the reforestation, and others. However, the objective of strict government regulations is to safely produce the paper without damaging and jeopardizing the nature and the environment.

II-Trade Policies

Paper Companies source raw material, supplies, tools and equipment from various countries across the world. The trade policies of different countries are variable depending on their foreign policy and diplomatic relations. For instance, if the suppliers and the buyer countries don’t have good trade relations, they would impose strict government regulations to reduce the trade with one another.

III-International Pressure

Paper Companies are under a lot of international pressure due to environmental sustainability initiatives. They consider Paper Industry is causing deforestation, wastewater and the and environment, fuel and energy consumption in the production machinery, water and air pollution. However, they are introducing new regulations and policies for Paper Companies to reduce environmental waste.

Economic Factors Affecting Paper Industry

Some of the main economic factors in the Paper Industry PESTLE analysis are as follows;

I-High Demand

The demand for the Paper has been increasing significantly due to the economic growth of countries worldwide. It is due to the growth of school and education industry, businesses and companies, and various other offices. However, they all need and require paper for reading, writing, and packaging of products and goods in their daily routine operations.

II-Consumption Pattern

The consumption pattern of customers directly impacts the sales and growth of Paper Companies. Along with the increasing demand for paper, the demand for digital and tech devices has also been increasing a lot and it negatively impacts the consumption of paper. People would save their documents digitally and they don’t have to buy paper anymore.

III-Expensive Material

The cost of paper material, supplies, and equipment has increased a lot in recent years. It is due to multiple factors like high labor cost, increasing fuel price, sourcing expenses, equipment repairing and maintenance cost, and others. Collectively, they all have caused the material cost and operational expense to increase.

Social Factors Impacting Paper Industry

Some of the main social factors in the Paper Industry PESTEL analysis are as follows;

I-Eco-Friendly Awareness

The consumer market has become highly aware of the environmental sustainability and eco-friendly products and goods. They are aware of the fact that Paper Industry is causing deforestation, environmental waste, and carbon emission to the environment. That’s why they prefer product and goods that are eco-friendly and environmental sustainable, which means they’re reducing the consumption of paper.

II-Urbanization Trend

There are multiple trends and factors prevailing in the modern consumer market relevant to urbanization. They are like remote working, social media, online shopping, tech and digital devices, and others; they’re decreasing the usage and consumption of paper.

III-Changing trends

The customer market trends are highly unstable and they keep changing due to multiple factors. Paper Companies should be familiar with various trends by regularly conducting market research. It allows them to keep up with the growing demands of the customer market.

Technological Factors Affecting Paper Industry

Some of the main technological factors in the Paper Industry PESTEL analysis are as follows;

I-Tech Manufacturing and Processing

Paper Companies are implementing the advanced technological tools and equipment in their paper production and manufacturing processes. It allows them to smoothly and efficiently perform their production and manufacturing with limited wastage of resources. As a result, it amplifies the paper production yield, water recycling system, and low consumption of energy.

II-Digitalization and Automation

Paper Companies are investing a significant amount of capital resources on the advanced digital and automation technology in the paper production, packaging, and distribution processes. It helps them to reduce the labor cost, achieve flexibility, saving time and resources, and optimized production workflows.

Legal Factors Impacting Paper Industry

Some of the main legal factors in the Paper Industry PESTEL analysis are as follows;

Regulatory Compliance

Paper Companies need to comply with the government policies and regulations of various countries. They comprise labor laws, production and manufacturing methods, quality standards and protocols, and others. Regulatory compliance would help them to smoothly and efficiently perform their papermaking processes without any delays and disruption.

Environmental Factors Affecting Paper Industry

Some of the main environmental factors in the Paper Industry PESTEL analysis are as follows;

Sustainability Initiative

Paper Companies should make a strong commitment to the environmental sustainability initiative. It comprise of investing in the renewable sources of energy, reforestation initiative, biodegradable packaging, and lower waste to reduce the carbon emission rate. It helps them to keep up with the growing environmental sustainability customer market trends.

Conclusion: Paper Industry PESTLE Analysis |PESTEL Analysis of Paper Industry |External Environmental Analysis of Paper Industry | Strategic Analysis of Paper Industry

After an in-depth study of the pestle analysis of Paper Industry; we have realized that paper is the leading item in the consumer market industry. If you are learning about the Paper Industry PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economical, social, technological, legal, and environmental.