PESTEL Analysis of International Paper The Aussedat-Rey Acquisition
Posted by Freddie Murphy on Jul-15-2022
What is PESTEL Analysis?
The PESTEL model is a told for strategic business management. Companies like the International Paper The Aussedat-Rey Acquisition frequently make use of the PESTEL model and analysis for purposes of facilitating strategic decision-making. The model primarily focuses on, and helps business identify and understand different macro-economic factors and challenges, and prepare accordingly. Moreover, the model also elaborates and helps a company understand the impact of these macro-environmental factors on the company’s management and operational processes (Anthony, 2021; Buchanan & Huczynski, 2019).
The external factors included in the PESTEL analysis include:
- Legal and
These factors allow the International Paper The Aussedat-Rey Acquisition to comprehensively understand the external environment, and the various influences present in it. Further, the model also allows an understanding and identification of how multiple factors and influences interact with each other to affect the business operations and standing of the company (Chernev, 2018).
The model is used by companies and professionals to aid in different situations and business scenarios to assist in strategic planning processes as well as schedules. In doing so, companies like the International Paper The Aussedat-Rey Acquisition also make use of the PESTEL model and analysis for effective risk management and risk planning purposes. In addition, the model is also useful in allowing businesses and companies to identify new opportunities in the environment and the market, as well as identify potential challenges and prepare for overcoming them (Buchanan & Huczynski, 2019). The new opportunities can allow companies like the International Paper The Aussedat-Rey Acquisition to develop their innovative capabilities and engage in new product development and develop new initiatives for competitiveness. In addition, through this, the PESTEL model also allows companies to strengthen their financial viability. The PESTEL analysis is also used by the International Paper The Aussedat-Rey Acquisition for aiding in the development and building of other strategic tools and models including the Handoff Matrix, the Porter’s five force analysis, and the SWOT analysis. These models also assist in fine decision-making and strategic goal setting for businesses and companies (DuBrin, 2013; Griffin, 2021).
The political factors are influences in the external environment that are informed and driven by government actions and regulations. The political factors help companies understand and estimate the impact and influence that a government has on the overall industry as well as its own business operations (Joyce, 2022). For the International Paper The Aussedat-Rey Acquisition, some of the political factors that influence its operations and viability include:
1. Government stability
The government stability is an important factor that influences the amount of foreign direct investment that an industry and a country receives. Moreover, the government stability allows a company to successfully partner and expand operations in other countries more easily through smooth business operations (Joyce, 2022).
2. Government policy
The government policy directly impacts how a country and its various industries interact and collaborate with the international community, and foreign industries. The government policy also directly impacts the business operations and the cost of doing business for industries and its various players through impacting the cost of raw materials and the foreign policy (Lasserre, 2017).
3. Foreign trade policy
The foreign trade policy directly impacts the level of technological and knowledge progress within the industry in which the company International Paper The Aussedat-Rey Acquisition operates. This foreign trade policy also impacts the competitiveness of the industry by restricting imports, and thereby helps in promoting the domestic businesses.
Corruption at the government level, and within bureaucratic positions in the country leads t restricted global business for the various industries and businesses, including International Paper The Aussedat-Rey Acquisition. Companies like International Paper The Aussedat-Rey Acquisition also face restricted access to global expansion and growth, as well as experience a higher cost of doing business along with hurdles for business sustainability owing to high levels of corruption (Lasserre, 2017).
5. Tax policy
Tax policy is another important external factor that is driven by the political and governmental actions. The tax policy again, directly impacts the cost of doing business as well as the cost of using different raw materials. Relaxed tax policies from the government have supported companies like International Paper The Aussedat-Rey Acquisition in facilitating business operations, and reducing the cost of doing business through lowering the cost of raw materials (Hitt, Miller, Colella, & Triana, 2017).
6. Trade restrictions
Trade restrictions are also a political factor that directly influences the industry and its various players. With increased trade restrictions, domestic players like International Paper The Aussedat-Rey Acquisition flourish as there is a limited inflow of imports –leading to domestic progress (Lasserre, 2017; Chernev, 2018).
The economic factors largely relate to the economic performance of a country, and how it influences the industry performance directly as well as indirectly (Schermerhorn Jr, Bachrach, & Wright, 2020). The economic factors are largely financial in nature, and impact the financial decision-making of the companies as well.
Higher and improved GDP of the country has significantly helped the industry, and International Paper The Aussedat-Rey Acquisition in expanding their business as well as in strengthening sales. The higher GDP also signifies improved economic and employment conditions, leading the International Paper The Aussedat-Rey Acquisition to improve its cost of doing business (Perera, 2017).
2. Economic growth
The higher economic growth has allowed the government to improve public infrastructure and services – leading to the improvement of industrial infrastructure as well owing to higher tax collection. This in turn allows the industries and businesses to improve their performances and operations, and maintain lower costs of doing business (Tonelli & Cristoni, 2018).
The International Paper The Aussedat-Rey Acquisition and the overall industry has seen a medium inflation rate. This mediocre increase in the inflation rate signifies an increased demand for the industrial goods and services, as well as higher wages for the labor (Joyce, 2022).
4. Employment rate
The higher employment rate and increased job creation has been a positive sign for International Paper The Aussedat-Rey Acquisition. The company, along with other industrial players have experienced improved and increased demand for their products and services, and at the same time, have been able to attract a more educated and talented workforce. This has allowed the company to improve its operations and at the same time, increase its revenue (Schermerhorn Jr, Bachrach, & Wright, 2020; Wunder, 2019).
5. Purchasing power
The improved economic conditions and growth of the country are also reflected in the increased purchasing power of the people. The higher purchasing power signifies improved employment conditions as well as an improved demand for local and international products. The company significantly benefits from this as higher purchasing power increases the affordability for its products and services (Tonelli & Cristoni, 2018; Hitt, Miller, Colella, & Triana, 2017).
6. Interest rate
The lower interest rates allows individuals and companies to increase their borrowing. With increased borrowing businesses and companies like the International Paper The Aussedat-Rey Acquisition are able to sustain their business operations, and maintain a lower cost of doing business. At the same time, consumers are able to continue to maintain demand for products and services to sustain their current lifestyles. Higher borrowing because of lower interest rates also leads to industrial development and infrastructural buildup (Valeri, 2021; Rastogi & Trivedi, 2016).
Social factors include those factors and influences which impact the lifestyle, and leisure activities of individuals within a region or a country. These shifts can then directly as well as indirectly impact the commercial activities and operations within the region – having a direct influence in the operations and business of companies like International Paper The Aussedat-Rey Acquisition (Stead & Stead, 2014; Rastogi & Trivedi, 2016). Social factors within the PESTEL analysis include, for example, the following different facets.
1. Population growth rate
International Paper The Aussedat-Rey Acquisition’s home country has a high population growth – with a large number of youth. The higher proportion of younger individuals in the economy signifies higher demand for tech-based products as well as increased awareness about local and global trends. International Paper The Aussedat-Rey Acquisition caters to the needs and demands of this population group through ensuring high quality product offering that matches global standards and benchmarks (Stead & Stead, 2014).
2. Education levels
The country of origin has a high emphasis on education. Almost 85% of the young population – both males and females are educated, and hold at least a bachelor’s degree. The higher education signifies a more talented and skillful labor fool for industries and businesses like International Paper The Aussedat-Rey Acquisition. At the same time, the higher education also hints towards improved job probability, and higher wages – leading to increased demand for International Paper The Aussedat-Rey Acquisition products and services (Wilson, 2018; Lasserre, 2017).
3. Career attitudes
The country and its youth, as well as other population groups, exhibit high career orientation. The individuals are career-driven, and seek to continually improve their job positions and quality of life. The higher drive towards an improved career signifies higher confidence and risk-taking capabilities in the individuals. International Paper The Aussedat-Rey Acquisition and other industry players can benefit from this through engaging in new product developments to meet the changing needs and demands of the population (Buchanan & Huczynski, 2019; Hitt, Miller, Colella, & Triana, 2017).
The country is made up of different Diasporas, with a large number of immigrants. As a result, the country represents different cultural colors, as well as high cultural tolerance. This is an important factor in allowing for higher tolerance and inclusion of diversity (Wilson, 2018).
5. Heath consciousness
With improved medical facilities, and a focus on maintaining physical as well as mental health, the country has seen a lower infant mortality rate, as well as higher living spans. This has enabled the older population group of the country to expand, as well as improve the living standards and quality of life for the middle class and younger population groups. The improved health conditions and medical facilities allow longer consumer cycles for companies like International Paper The Aussedat-Rey Acquisition for their products and services – and allow these companies to also introduce new product lines for the different population groups (Hitt, Miller, Colella, & Triana, 2017; Chernev, 2018).
6. Disposable income
As more families engage with the workforce, and more females participate in the labor force, households have access to higher disposable income. With dual-income streams, and improved quality of life, this signals a higher consumer purchasing power, and an increased demand for products and services that improve living standards – including products by International Paper The Aussedat-Rey Acquisition (DuBrin, 2013; Wunder, 2019).
In simplest terms, the technological factors within the PESTEL model refer to, and identify the influence of progressive technology on industries and businesses within a specific region, and country. This progressive technology, and technological advancements directly as well as indirectly influence the operations, and ways of doing business for International Paper The Aussedat-Rey Acquisition (Perera, 2017). Different aspects of the technological macro-environmental factor include the following:
The higher overall investment in innovation, and new business ideas by the government and policymakers have allowed the industry to progress. As a result, players like International Paper The Aussedat-Rey Acquisition have flourished, and benefitted from the higher technological development, and improved infrastructure – which have allowed rapid expansion and growth for the business, an s well as maintained sustainable costs for doing business (Wilson, 2018).
2. Research and development investment
The higher technological development and progress has also been made possible by the increased investment in research and development. The region as a whole, as well as different industries, invest in research and development for understanding the impact of new technologies, and how they can be incorporated into the business for improving operations. In addition, companies like the International Paper The Aussedat-Rey Acquisition also collaborate with other global firms, and tech leaders to benefit from technological knowledge and advancements (Lasserre, 2017; Anthony, 2021).
3. Internet penetration
International Paper The Aussedat-Rey Acquisition has also benefitted from the increased internet penetration in the region, as well as in global markets. The higher internet penetration has allowed the company to increase its reach and penetration – thereby expanding its consumer base. Moreover, the higher internet penetration has also allowed the company to capitalize on the trend of e-commerce, and expand business through Omni-channel retailing platforms as well (Sahaf, 2019; Roque, Alves, & Raposo, 2019).
4. Smartphone usage
The higher smartphone usage has complemented the trend of the increased and higher internet penetration – allowing International Paper The Aussedat-Rey Acquisition to develop engaging and interactive apps, as well as content to grab the attention of the consumers’ and differentiate its offerings. The use of interactive media through smart phone applications, as well as the use of influencers over social media platforms have allowed International Paper The Aussedat-Rey Acquisition to positively influence its consumer groups and markets – reaching them via smartphones amongst other channels as well (Kotler & Keller, 2021).
As a result of increased technological advancement and progress, as well as collaboration with global and local partners, the industry as well as International Paper The Aussedat-Rey Acquisition has seen increased amounts of automation. The automation has allowed International Paper The Aussedat-Rey Acquisition to reduce costs of operations, as well as reduce human error. With the incorporation of machine learning and AI, the company has been able to positively influence consumer behavior and purchasing habits as well. The automation has also improved the efficiency and performance of the company – leading to increased speed and higher accuracy levels in operational performance and optimality (McShane & Glinow, 2017; Phillips & Moutinho, 2018).
6. Technological awareness
The higher technological awareness has also facilitated International Paper The Aussedat-Rey Acquisition in engaging more easily, and rapidly with new product ideas and innovative technology. This engagement has allowed the company to develop more interactive products and use more engaging means and platforms for reaching consumers, as well as increasing the accessibility of products and services (Rastogi & Trivedi, 2016).
With an increased focus on environmental sustainability and protection, this aspect of the PESTEL model and framework focuses on the potential risks and challenges that businesses may pose on the environment in their operations, and how they can be contained (Tonelli & Cristoni, 2018). The factor largely spans the environmental concerns that can present businesses and companies like International Paper The Aussedat-Rey Acquisition with potential opportunities as well challenges. Some environmental concerns included under the PESTEL model include the following:
1. Environmental Policies and regulations
The International Paper The Aussedat-Rey Acquisition ensures to abide by, and strictly follow global as well as local standards and policies for environmental protection. Since the company has global operations, it ensures that all its business operations and concerns adhere to regulatory standards. This is done to protect the company from any possible back lash and negative PR, as well as ensure that the company contributes positively towards environmental sustainability (Perera, 2017).
2. Consumer awareness about environmental issues
There has been an increased focus on green consumption by consumers based on the increased knowledge and awareness regarding various environmental pitfalls and issues. As a result of this increased awareness, players like International Paper The Aussedat-Rey Acquisition have taken into consideration the changing consumer trends and demands, and developed green offerings. These green product offerings satisfy consumers’ need for environmental protection, while at the same time, and also fulfil the need for functionality and quality (Chernev, 2018; Perera, 2017).
International Paper The Aussedat-Rey Acquisition also regularly partners with different NGOs to support their causes. These causes are generally aligned with the values of the company itself. As a result of these collaborations, International Paper The Aussedat-Rey Acquisition is able to contribute positively to the community, strengthen its CSR profile, as well as help improve the life style and standards of the communities where it operates (Tonelli & Cristoni, 2018; Wunder, 2019).
4. Carbon footprint
The company actively abides by regulations to control and contain its carbon footprint. The automation as well as the increased incorporation of clean technology, and adoption of green cycles, and the increased focus on recycling has allowed the company to effectively control its carbon levels, and develop a cleaner, and a greener supply chain, and operation management (Wunder, 2019).
The legal factors within the PESTEL analysis and model largely include those influences and impacts on a region, industry, or business that arise from a change in the regulatory environment – local as well as global (Perera, 2017). Adhering to legal regulations and complying with different policies and laws regarding employment contracts allows companies like International Paper The Aussedat-Rey Acquisition to avoid scandals and bad PR, as well as maintain transparency with stakeholders. For the International Paper The Aussedat-Rey Acquisition, regulatory and legal aspects of the PESTEL may include the following:
1. Discrimination laws
The International Paper The Aussedat-Rey Acquisition ensures that it follows the regulations regarding discriminatory practices. The HR policies and standards within the company ensure that there is no discrimination within any of the processes of the company- from hiring to training opportunities. In addition, the company also invests in providing regular diversity and inclusion trainings and workshops to its employees to build a more inclusive and tolerant environment (Chernev, 2018).
2. Equal opportunity laws
The International Paper The Aussedat-Rey Acquisition also ensures that it follows the regulations and policies regarding equal opportunities, and is an equal opportunity employer. The company does not discriminate against incumbents and applicants on any basis, and hires through merit alone (Kotler & Keller, 2021).
3. Health and safety laws
The region has a strong focus on health and safety laws, in addition to the global compliance needed regarding the same. With global and international operations, and a presence in multiple locations, the International Paper The Aussedat-Rey Acquisition ensures to follow and adhere to safety and health laws for the ensuring the wellbeing of its employees. This includes providing adequate room and time for maintaining work life balance, restricted work hours, and limited over time with adequate overtime pay (Lasserre, 2017).
4. Intellectual property laws
International Paper The Aussedat-Rey Acquisition also benefits from the intellectual property laws that are followed rigorously by the industry, as well as implemented in the region where the company operates. The intellectual property laws help safeguard new business ideas and innovations of the International Paper The Aussedat-Rey Acquisition, and allow it to develop differentiation in its product offerings. This in turn leads to long-term competitive advantage (Wilson, 2018; Valeri, 2021).
As has been identified, the PESTEL analysis is an important source of identifying potential market opportunities and challenges –s developed and posed by different external factors. The macro environment of a business plays a significant part in the development and progress so a company – such as company International Paper The Aussedat-Rey Acquisition. With acute assessment and development of proactive responses to different macro environmental influences, the International Paper The Aussedat-Rey Acquisition has been able to accurately and efficiently improve its internal operations as well as business standing and competitiveness. The assessment of the macro environment is critical for organizations and businesses for ensuring long-term sustainability as well as for purposes of developing differential competitive advantages.
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