Business and Macro Environment Analysis: PESTLE, SWOT, and TWOS

This report offers a comprehensive analysis of the macro environment in business, focusing on the application of PESTLE (Political, Economic, Sociological, Technological, Legal, and Environmental) and SWOT (Strengths, Weaknesses, Opportunities, and Threats) analyses. The report begins with an introduction to the macro environment, emphasizing its impact on organizational decision-making and performance. It delves into the PESTLE framework, providing detailed explanations of each factor and their influence on businesses. The report also covers SWOT analysis, including its application in the context of the Chaudhary Group. Furthermore, the report explores the TWOS analysis, which is used to analyze the organization. The report aims to help business students understand the external factors that influence businesses and to develop strategic decision-making skills in response to a dynamic business environment.

ASSIGNMENT COVER SHEET
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Student ID AAYUSH KANDEL Reg No.
Family Name KANDEL Given Name AAYUSH
Enrolment Year 2021 Section A
Semester 1ST Email Aayushkandel0@gmail.c
om
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Unit Title BUSINESS AND
BUSINESS
ENVIRONMENT
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Table of Contents
1. INTODUCTION TO MACROENVIRONMENT IN BUSINESS
2. PESTLE ANALYSIS
3. SWOT ANALYSIS
4. APPLICATION OF SWOT ANALYSIS IN CHAUDHARY GROUP
5. TWOS ANALYSIS
6. CONCLUSION

1. INTORODUCTION TO MARCRO ENVIRONMENT IN BUSINESS
Macro environment is also known as the external factors or forces which affect different
situations inside the organizations like decision making and also have impact on the
performance of the organization. it is an uncontrollable force or also known as external forces.
Examples of such forces which influence the business are natural , economic, demographic,
social and cultural as well as legal and political factors. It is not controllable by the organization.
they can positively or negatively influence the organization. the success of company is
determined by these factors. If they can quickly adapt to the changes of macro environment,
any situation can be a big possibility for the organization to reach the success. A company
always should watch and be attentive about these elements so that they can understand the
nature of the environment and can change the situation into possibility for them.
IMPACTS OF MACRO ENVIRONMENT IN BUSINESS
USING PESTLE ANALYSIS
2. PESTLE ANALYSIS:
PESTLE ANALYSIS is a structure or framework which is implemented in order to analyze the key
factor of macro environment like(economic, political, socio cultural, technological, legal and
environmental) which influence from the outside. This analysis is very flexible and it helps the
professionals to have information about the external environment. The head or main people of
the organization use PESTLE analysis to make important decisions and help to make great result
for the organization.
PESTLE analysis is composed of six factors i.e. POLITICAL, ECONOMICAL, SOCIOLOGICAL,
TECHNOLOGICAL, LEGAL AND ENVIRONMENTAL.
These factors are used for the analysis of outside situation. They influence the business in a big
way. The experts study these factors or elements and determine their decision for the compny.
The more these factors are studied and made decision according to these situation the more
successful planning will take place.
Here are some details about the elements of PESTLE and their influence in the organization.
1. Political
Politics is the most driving force that have great influence on any organization. the political
situation of the country determines the condition of industry or organization. political factors
include rules and regulations, tax policies, trade tariff, fiscal policy etc. these factors influence
the industry or organization to different aspect . for example; if government impose new tax

rules , which can change the whole structure of the organization in income generation.
Company will have to adopt new policy in taxation so that they also can make profit. Similarly
political conditions or stability of the country also determines the nature and environment of
the business . if the political condition of the country is strong , then the positive environment
will be prevail in the business as well as the industry can flourish rapidly. The change in rules
and regulation and policy can have both positive and negative influence upon the business.
Government can increase the tax to some kind of business while decrease the tax for some
others. This can impact the both business. So leaders should watch about the tax change and
make strategic decision to deal with such situations. political stability can affect a business in
many ways. If the political condition is stable, then the. Business can flourish in many ways. It
can go up to global scale. Lack of political stability can drastically diminish the business culture
forcing them to go into vain. For example during the 10 years revolution and civil war in nepal,
a whole lot of business affected , they got extinct due to the civil war. The whole economy of
the country got downside.
Different business of jute ,tobacco, carpet and garments and so on got extinct in the last 15
years due to lack of political stability and high corruption prevailing in the country.
Foreign trade regulations implemented by the government can affect the business in its
expansion. A whole lot of business wants to expand the business in the overseas. But due to the
tax policies, some business can expand whereas other business can get affected due to
different tax policies. Also the government planning and strategy to support local business int
heir growth can be against other international market which can hinder the expansion of the
business in the foreign market.
Employment law is also made by the government . these laws are responsible for maintaining
the good and suitable relationship between employee and employers. Employee are the
backbone of the company. Without them no goals can be achieved. So the leaders must be
attentive to the employment laws generated by the government and accomplish or implement
in the organization as soon as possible.
2. Economic
It is another important external elements which determines the nature of business. They have
both positive and negative influence in the business. There are different factors of economy
which affect the business like; economical growth/ decline, interest rate, exchange, inflation,
wage etc. the business must be aware of these factors so that they can make strategic decisions
and implement very well dealing with different situations.

For example: the rise in inflation rate in the national level affect the pricing of goods. The
organization look after the inflation rate and make their pricing of the goods according to that.
this is a situation of the possibility if organization makes wise decisions without affecting the
relation with the customer. the organization changes the suitable price of their products
according to this inflation rate. Thus change in pricing determines the purchasing power of the
customer. after this, it changes the demand and supply models for the economy. So dealing
with these situation of changes in the economy, the company can maintain sustainable growth
in the long term.
Interest rates also influence the business. Different business rely on loans from the bank.
Banking institutions have different strategy on their interest rates. It differ from places to
people. when the banking institution have high interest rate, it might affect the business who
depend upon large loans, when then interest rate is low, big business have loads of benefits.
Another factor is exchange rates. Exchange rates deals in business with international
transaction. Changes in exchange rates affect international transaction. It may affect the cost to
pay to the international supplier for their satisfaction and to stay competitive in the
international market.
3. Sociological
Social and cultural elements are the main factor for the business too. Designing the product and
launching them in the suitable market respecting the social norms and culture of the respective
place is a main responsible of any organization. the research in social and cultural values of the
nation or a place can help the company to determine what type of product can be sold in the
region. Sociological factors includes different elements like health consciousness, population,
cultures, age distribution, health and safety etc. a business or organization should become
adaptive to their social environment and create strategy according to that. they should become
aware of the culture and the needs and wants of the customer.
For example; in arabian countries, fashionable clothes don’t have much value in comparison to
Europe and America. So different fashion brands like Gucci respect the cultures of the arabian
and they make the products according to their culture and demands. In arabian countries
women wear hijab (whole body covering dress). So instead of ignoring the market, GUCCI came
up with an idea of making their own brand of hijab, scarf, kurtha for these cultural countries.
And thus they have great demand and value in arab countries too. So we can see adapting to
cultural and social situation can be great opportunity for the brand and companies.
Here the population also have different effect on the business. Changes in population as well as
caste religions can affect the way of business and thus have to adapt new strategy for
sustaining their business.

4. Technological
Technology is changing day by day. It is getting better and better. New innovation happens
everyday. Technology has overwhelmed the world. Technological factor produce great impact
in the business the technological factors affect the business directly. Some of the technological
factors are:
A. Artificial intelligence
Artificial intelligence (AI) technology has changed the face of the world. AI technology helps the
work done easier and faster. This technology will replace human resource and will perform the
work with 100% correctly as there are chances of making mistakes by humans. This technology
change the way of working and production of the company. This technology will reduce the
cost of production which is very huge.
While on the other hand, AI will replace the jobs and thus increase the unemployment rate.
B. Internet
Internet is the driving force of todays world. It is the most important and widely used elements
of technology in the world. They are used in education, transportation, businesses, hotels, etc.
to sum up it is now being used everywhere . so, it is also important factor for the business. It
influence the business directly. In business , internet is used as communication, research,
marketing and selling. Large scale business use internet to communicate with their employees.
For example ; apple communicate with their employees through the internet and their own
server.as well as communicate with their customers too.
Internet is also used for research purpose. The organization use internet to research about the
market as well as the demands of the market. In this way they can make use of internet to
prepare strategic planning for the future.
The most important thing in business is marketing. Many business use internet for online
advertisement .for ex: APPLE,MICROSOFT SAMSUNG etc. they spend a lot of money in online
marketing as it reaches to the whole world. The product of the organization will get displayed in
international market.
Many business use internet as selling technology. Different online business like DAARAZ, EBAY
sell their products online. An online shopping in kathmandu is INFINIX STORE. They sell their
products online. 100% of their selling happens through online. So internet is used by many
business for selling purposes also.
This technology has really been boon for the business who want to flourish in todays world.

In the flip side, telephone companies will have no market like in the previous times due to
internet. As now people can communicate through internet to any part of the world.
5. Legal
Legal is another element or factor which is directly related with business. The legal factors are
the laws that affect the business. Examples of legal factors that affect business are: consumer
law, discrimination law, copyright law , employment law, import/export law etc.
Consumer law also known as consumer protection law that protect their rights in the
marketplace. Proper implementation of consumer law helps the company to gain some
reputation and also loyal investors and employees.
Whereas Employment law sometimes known as labor law, employment law defines how
employees should be handled by businesses. Minimum wage rules can limit the kind of jobs a
company can offer, child labor laws can affect how close-knit home enterprises in developing
nations work, and dismissal laws can make discharging employees more difficult (for whatever
reason, perhaps unproductivity).
3. USING SWOT ANALYSIS
A SWOT Analysis is a technique for evaluating the four areas of your business. The full form for
SWOT is Strengths, Weaknesses, Opportunities, and Threats.
1. Strength
Strengths are things that the company performs very well or in a way that stand out apart from
its competition. Considering the benefits the firm has over competitors. The strength includes
motivation to employees , access to certain resources, or a robust set of manufacturing
methods.
every part of our company is only a strength if it provides the company with a distinct edge. If
all of the competitors offer high-quality items, for example, a high-quality manufacturing
method isn't a competitive advantage: it's a must.

2. weakness
Weaknesses, like strengths, are ingrained in the company, so the firm or the company should
concentrate on your people, resources, processes, and procedures. The company should
Consider what they could do better and what practices they should avoid.
It's is the process to think about the flaws in company. Only if the company collect all of the
necessary data will a SWOT Analysis be useful. As a result, this is the time to be practical and
face any painful truths as quickly as possible.
3. Opportunities
External elements that can provide a competitive edge to a company are referred to as
opportunities. A vehicle manufacturer, for example, can export its cars into a new market if a
government lowers tariffs, increasing sales and market share.
Opportunities externally appealing qualities that indicate why the firm is likely to succeed.
• * Opportunities to generate more money in the environment - Externally appealing variables
that reflect the cause for an organization's existence and growth.
• * Occur when a firm can take advantage of conditions in its environment to create and
execute profitable strategies.
• * Organizations should be cautious, recognizing and seizing opportunities when they occur.
• Examples: Rapid market growth, complacent competitors, changing customer needs/tastes,
new product applications discovered, economic boom, government deregulation, and sales
drop for a substitute product.
4. Threats
Threats are circumstances that have the potential to cause damage to a company or the firm. A
drought, for example, poses a risk to a maize company since it might destroy or reduce crop
yield. Other prevalent threats include growing material costs, growing competition, and a
limited labor supply, among others.
Threats Arises when external conditions affect the organization's business's long - term
profitability.
• Examples include foreign competitors entering the market, the introduction of new
alternative items, the fall of product life cycles, changing customer needs/tastes, rival

enterprises adopting new tactics, increased government regulation, and the economic
depression.
4.APPLICATION OF SWOT ANALYSIS IN CHAUDHARY GROUP (CG)
Chaudhary Nepal's strengths are its capabilities and resources, which it may use to gain a long-
term competitive edge in the industry. Positive characteristics of five important resources and
skills - activities and processes, physical capital such as land and buildings, people resources,
financial resources, and past experiences and triumphs - all contribute to strengths.
1. Strength of Chaudhary group
Chaudhary Nepal's Strong Domestic Market - Chaudhary Nepal's domestic market is both a
strength and a hurdle to the company's growth and innovation. According to the Chaudhary
Group's information: Chaudhary Nepal can easily grow in its internal market without much
innovation, but entering the international market will necessitate more investment in research
and development. So far, the temptation for Chaudhary Nepal's executives has been to
concentrate solely on the domestic market.
Chaudhary discusses how to manage regulations and the business environment. Nepal is
governed by a plethora of rules and regulations imposed by the government. The firm must
navigate the environment by developing strong relationships with lobby groups and political
networks in the areas of competitive strategy, crisis management, decision making, economy,
emerging markets, government, innovation, leadership, leading teams, networking,
organizational culture, public relations, social enterprise, social responsibility, and venture
capital.
- Proven Go-To-Market Track Record — Chaudhary Nepal has a proven track record of not only
launching new products in the home market, but also designed to cater to a variety of markets
based on customer insights. Chaudhary Nepal has explored many approaches in several
markets and come up with successful Finance & Accounting solutions, according to Christopher
J. Malloy, Lauren H. Cohen, and Inakshi Sobti.
2. weakness of Chaudhary group
Chaudhary Nepal's weaknesses are the sectors, competencies, or skills that it lacks. It restricts
the firm's capacity to develop a long-term market edge. Financial resources, activities and
processes, historical experiences and triumphs, people resources, and physical resources such
as land and buildings are all examples of weaknesses.

Inventory Management — Based on the information presented in the Chaudhary Group:
Rebuilding Nepal case study, we can deduce that Chaudhary Nepal's inventory and cash cycle
are not well managed. Inventory management has a lot of room for improvement, according to
Christopher J. Malloy, Lauren H. Cohen, and Inakshi Sobti.
- A scarcity of vital talent – I feel Chaudhary Nepal is lacking in critical talent, particularly in the
areas of technology and digital transformation. In light of advances in the fields of artificial
intelligence (AI) and machine learning, Chaudhary Nepal is attempting to reconstruct
operations.
Lack of diversity in the workforce - I feel Chaudhary Nepal's workforce is too homogeneous,
considering that the majority of its progress has occurred in the domestic market. According to
Christopher J. Malloy, Lauren H. Cohen, and Inakshi Sobti, this could limit Chaudhary Nepal's
global market success.
3.opportunities
Opportunities are macroeconomic trends and changes that Chaudhary Nepal can employ to
either strengthen its current market position or expand further. Various causes, such as
technology advancements, economic growth, shifts in consumer, political situation and policy
changes, and an increase in consumer disposable income, can all create opportunities.
- Increasing Standardization – Chaudhary Nepal can capitalize on this trend by limiting the
quantity of products on the market and focusing marketing efforts on the most successful.
- Artificial Intelligence Advancements – Chaudhary Nepal can leverage artificial intelligence
advancements to better estimate consumer demand, cater to specific segments, and improve
advanced analytics.
- Neighboring Market Opportunities – Chaudhary Nepal can look into adjacent industries.
Marketing advantage, disaster response, decision-making, financial system, emerging markets,
government, innovation, leadership, leading teams, networking, organizational culture, public
relations, social enterprise, civic responsibility, and venture capital to further industry growth,
particularly by extending the features of current products and services.
Growing Market Size and Evolving Preferences of Consumers – Over the last
decade and half the market size has grown at brisk pace. The influx of new
customers has also led to evolution of consumer preferences and tastes. This
presents Chaudhary Nepal two big challenges – how to maintain loyal
customers and how to cater to the new customers. Chaudhary Nepal has

tried to diversify first using different brands and then by adding various
features based on customer preferences.
Consumer Preferences and Market Size are Changing – The market has risen at a rapid pace
during the previous decade and a half. Consumer expectations and tastes have evolved as a
result of the entry of new clients. This poses two major issues for Chaudhary Nepal: how to
retain loyal clients and how to attract new ones. Chaudhary Nepal has attempted to diversify by
employing several brands first, and subsequently by adding various features based on customer
preferences.
4.Threats
Macroenvironmental causes and trends pose a threat to Chaudhary Nepal's business strategy.
Political developments and legislative changes, increases in consumer disposable income,
economic growth, technical advancements, and changes in consumer preferences are all
potential threats.
- Middle-Class Squeeze in Developed and Developing Countries – One of the most serious
threats to not only globalization but also capitalism is growing inequality. Chaudhary Nepal has
personally seen the consequences, with decreasing demand for its products from middle-class
clientele in the US and EU markets.
threats of New Entrants as a result of Cost Cutting and Efficiencies - Competitors, both local and
foreign, can benefit from Chaudhary Nepal's low cost of reaching customers through social
media and e-commerce.
5. T.W.O.S analysis
A Threats, Opportunities, Weaknesses, and Strengths (TOWS) analysis is a variation of a SWOT
study.
A TOWS analysis, like a SWOT, will involve identifying an organization's strengths, weaknesses,
opportunities, and threats; however, one of the most common criticisms of a SWOT analysis is
that it fails to highlight the links between the various aspects and categories. A specific threat,
for example, could amplify the impact of a flaw. A TOWS study, on the other hand, will try to
match internal and external characteristics in order to uncover relevant strategic choices for an
organization to explore.
A TOWS analysis follows the same fundamental steps as a SWOT analysis in terms of listing
strengths, weaknesses, opportunities, and threats, but it prioritizes threats and opportunities
over weaknesses and strengths. Executives assess how the organization can capitalize and

reduce dangers by utilizing strengths and combating weaknesses after generating a list of
threats, opportunistic, weaknesses, and strengths. It's a wonderful next step following SWOT
since it allows people to take action based on their findings.
6. CONCLUSION
TO conclude, PESTLE AND SWOT analysis are the two fundamental technologies used for
measuring the altitude of success or to plan the way of success for the company.
From the research we also found out the positive and negative aspects of environment
affecting the business.
REFERENCES
1. https://embapro.com/frontpage/swotcase/21004-chaudhary-nepal
2. https://getlucidity.com/strategy-resources/an-introduction-to-tows-analysis/
3. https://www.investopedia.com/terms/s/swot.asp
4. https://www.mindtools.com/pages/article/newTMC_05.htm
5. https://www.studymode.com/subjects/negative-and-positive-factor-of-the-macro-
environment-and-micro-environment-that-may-have-impact-on-it-page1.html
6. https://www.toppr.com/guides/business-environment/introduction-to-business-
environment/macro-environment/