Cement is a binding chemical substance used in the construction of houses and buildings. It sticks material together after hardening. Sand and concrete are usually mixed with cement, and water starts the chemical reaction of the cement. Today, we’ll discuss the PESTLE analysis of Cement Industry; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Cement Industry
Some of the main political factors in the Cement Industry PESTLE analysis are as follows;
I-Trade Policies
The trade policies and regulations of different countries are diverse for cement manufacturing companies. China, India, and the USA are the world’s top producers of cement and they serve a significant portion of the global construction industry market. The geographic and political trade alliance among countries would impact the operations of cement companies.
II-Government Regulations
Governments of different countries have diverse regulations for Cement Companies. Usually, they require a significant amount of energy and cause a lot of pollution to the environment. That’s why Cement Companies require government approval and licenses to perform their operations.
III-Political Stability
The stable political environment of the country plays a crucial role in cement companies perform their operations. Roadblocks, processions, riots, and inter-political conflicts would make it highly difficult for Cement Companies to deliver their product to the required destination in various countries worldwide.
Economic Factors Affecting Cement Industry
Some of the main economic factors in the Cement Industry PESTLE analysis are as follows;
I-Economic Down Turn
The global economy has been going through an economic recession for the past few years. It caused a massive unemployment rate, reduced the buying power of users, and negatively impacted the consumer spending pattern. When people have limited disposable income, they won’t spend it on constructing houses and buildings.
II-Currency Exchange Rate
The currency exchange rate market is highly unstable and volatile, and it keeps on changing daily and regularly depending on various factors. Cement Companies are operating their business in various countries worldwide. A small change in currency exchange rate would negatively impact the revenue, sales, cost, and expenses of companies.
III-Inflation and Interest
Inflation and Interest rate are the two main external economic indicators and they both directly impact the operations and sales of Cement Companies. For instance, higher interest rate encourages consumers towards saving, and it decreases the sale of products and goods in the country. In case of a higher inflation rate, products become unaffordable to many people.
Social Factors Impacting Cement Industry
Some of the main social factors in the Cement Industry PESTEL analysis are as follows;
I-Consumer Needs and Preferences
The consumer market needs and preferences keep on changing due to various factors over time. For instance, the consumer market has become highly cautious about environmental sustainability, they prefer products and goods that are eco-friendly. They don’t buy and support products and goods that are not sustainable and pollute the natural environment.
II-Generation Gap
The generation gap plays a key role in the growth and success of Cement Companies. For instance, old-generation people prefer building houses by using cement without thinking twice. On the other hand, the new generation of people want a sustainable material for constructing houses, and they are finding alternative methods of construction and building.
III-Employment Opportunities
Cement Companies require a lot of labor to perform their various operations and functions. It is creating job opportunities for many people in various countries across the world. In fact, the entire construction industry relies on cement to perform and work; it has employed millions of people worldwide.
Technological Factors Affecting Cement Industry
Some of the main technological factors in the Cement Industry PESTEL analysis are as follows;
I-Tech Advancement
Technological advancement is highly beneficial to the growth and success of Cement Companies. ML (machine learning), automation tools, and AI (artificial intelligence) help cement brands to efficiently perform their various production and manufacturing operations and reduce the wastage of resources.
II-Robotics Technology
The production and sourcing of raw materials are highly labor-intensive work. The robotics arms and the robotics technology have the capability to automate various production and shoveling processes. It would help the cement companies to perform various labor-intensive operations with machines without any errors and losses.
III-Data Analytics
Cement Companies consider employing data analytical technology. It allows them to efficiently forecast the demand for cement in the upcoming season based on the sales and they also have the capability to analyze it against various external factors. However, it helps them to produce the right quantity of products to customer market demands without any delays.
Legal Factors Impacting the Cement Industry
Some of the main legal factors in the Cement Industry PESTEL analysis are as follows;
Regulatory Compliance
Cement Companies should comply with the regulatory requirements of different countries. They comprise of cement production and manufacturing licenses, government approval, trade policies, import-export regulations, and other legal requirements. Regulatory compliance would help the cement brands to smoothly perform their production, manufacturing, logistics, and distribution operations without any delays.
Environmental Factors Affecting Cement Industry
Some of the main environmental factors in the Cement Industry PESTEL analysis are as follows;
Environmental Sustainability
Cement Companies contribute significantly to the emission of carbon and other poisonous gases into the environment. They need to comply with the environmental sustainability regulations by filtering out all the chemical residue and limiting the carbon emission rate. However, environmental sustainability initiatives to keep up with the growing sustainability trend and earn the trust and confidence of the customer market.
Conclusion: Cement Industry PESTLE Analysis |PESTEL Analysis of Cement Industry |External Environmental Analysis of Cement Industry | Strategic Analysis of Cement Industry
After an in-depth study of the pestle analysis of Cement Industry; we have realized that Cement Companies play a key role in building the modern world. If you are learning about the Cement Industry 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.
