General Electric Company is an aerospace engine manufacturing American multinational company. The aerospace company started its business in 1917. Today, we’ll discuss the PESTLE analysis of General Electric; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting General Electric
Some of the main political factors in the General Electric PESTLE analysis are as follows;
I-Trade Policies
General Electric is operating its business in various countries across the globe. The trade policies of different countries are different and they keep changing their trade regulations, and import and export taxes for the aerospace brand. The company should pay close heed to the trade regulations and import-export policies to avoid any type of trade issues.
II-Regulatory Changes
Countries change their aerospace regulations continuously with the arrival of every new political government. The aerospace brand should be aware of political and governmental change of different changes. In order to make politician vote in the company’s favor, the company invests a significant amount of capital resources on political lobbying to influence their decisions.
III-Government Contracts
Government contracts are the main source of General Electric’s revenue and profitability. In order to win government contracts, the aerospace brand invests a significant amount of capital resources on political lobbying and donations to political campaigns.
Economic Factors Affecting General Electric
Some of the main economic factors in the General Electric PESTLE analysis are as follows;
I-Downturn Economy
The global economy has been going through a recession for the past few years. It has increased the unemployment rate to a great extent worldwide, and it impacted almost all businesses and companies including GE. When people, governments, and companies have limited resources, they won’t invest their valuable resources in aerospace projects. This is because the demand and sale of airline tickets is very low.
II-Currency Exchange Rate
General Electric earns a significant amount of revenue and profit from the international market. According to an estimate, GE has a market share of approximately 35% of the global aerospace industry. The value of USD is higher than various international currencies except a few; a small change in the currency exchange rate would negatively impact the company’s revenue, sales, profitability, cost, and expenses.
III-Vulnerable Supply Chain
General Electric sources raw supplies, materials, semiconductors, parts, tools, equipment, and components for the production of aircraft engines worldwide. The global logistics and supply chain network is highly vulnerable; various factors can cause disruptions, delays, and other issues. The supply chain issues would increase the sourcing cost and expenses of the brand.
Social Factors Impacting General Electric
Some of the main social factors in the General Electric PESTEL analysis are as follows;
I-Environmental Sustainability Trends
The consumer market has become highly cautious about nature and the protection of the environment. General Electric should keep in mind the environmental sustainability trends and develop aircraft engines that are eco-friendly and sustainable. It allows the aerospace brand to comply with environmental sustainability trends and attract the attention of customers market.
II-Labor Market Shift
In order to achieve cost efficiency, various businesses and companies are outsourcing their production and manufacturing work and operations from various countries across the globe. It allows them to achieve cost efficiency and focus on other tech development and innovation areas. Most importantly, it helps the company to create job opportunities for poor people in the 3rd world countries.
Technological Factors Affecting General Electric
Some of the main technological factors in the General Electric PESTEL analysis are as follows;
I-Advanced Technology
General Electric is a tech brand and the company invests a significant amount of capital resources in aviation systems, airspace tech research, and other programs. Tech research and development would help the company develop advanced, sophisticated, and efficient aircraft engines and aviation systems to gain a competitive edge in the aerospace industry.
II-Digital Transformation
The global market, businesses, and companies are shifting towards digital transformations. General Electric should employ AI, ML, data analytics, simulation technology, and other advanced tech tools in its production and manufacturing operations. However, it helps the company to make efficient decisions and reduce the failure rate.
III-Data Security
General Electric deals with a vast variety of customers and clients. It imposes a significant obligation on the aerospace brand to protect the private data of its customers and business clients from hacker attacks. The data breach would expose the company’s top-notch technological development to the hackers and they would sell it to potential competitors.
Legal Factors Impacting General Electric
Some of the main legal factors in the General Electric PESTEL analysis are as follows;
I-Regulatory Compliance
General Electric should beware and comply with the taxation policies, import exports policies, trade regulations, and other regulatory requirements of different countries. Most importantly, it helps the company avoid expensive lawsuits, bans, restrictions, and heavy fines and penalties.
II-IPR
Along with compliance with the laws and regulations, General Electric should protect its intellectual property resources like the latest and advanced technological development; and patents for the advanced technology.
Environmental Factors Affecting General Electric
Some of the main environmental factors in the General Electric PESTEL analysis are as follows;
I-Environmental Sustainability
The aircraft, engines, and the products of General Electric contribute significantly towards environmental pollution and high carbon emission rates. The aerospace brand should develop efficient technology, employ renewable sources of energy, and decrease the carbon emission rate.
Conclusion: General Electric PESTLE Analysis |PESTEL Analysis of General Electric |External Environmental Analysis of General Electric | Strategic Analysis of General Electric
After an in-depth study of the pestle analysis of General Electric; we have realized that General Electric is the world’s leading tech aerospace brand. If you are learning about the General Electric 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.
