Global Business Environment: PESTLE Analysis of Royal Dutch Shell

This report presents a PESTLE (Political, Economic, Social, Technological, Legal, Environmental) analysis of Royal Dutch Shell, a leading international firm in the oil, gas, and chemicals industry. The analysis examines various external factors impacting the company's operations and strategic decisions. The political factors include climate change policies and instability in regions like the Middle East, posing threats to the firm. Economic factors, with their global variations, also negatively affect the company. Social perceptions regarding the oil and gas industry, especially concerns about safety and quality, present another challenge. Technological advancements, such as battery technology and blockchain, offer opportunities for growth. Legal aspects, including competition laws and data protection, provide opportunities as well. Environmental factors, including sustainability concerns and geographical issues, pose further threats. The report concludes that while technological and legal factors offer opportunities, the political, economic, social, and environmental factors present significant threats to Royal Dutch Shell. The report suggests the firm should focus on capitalizing on opportunities to improve its brand image and customer loyalty.

Global Business
Environment

INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
PESTLE Analysis is defined as the structure of scanning the external environment of the firm in
order to manage the strategy in a firm. It stands for political, economical, social, technological,
legal and environmental factors (What is a PESTEL Analysis?, 2020). Royal Dutch Shell is a
leading international firm founded in UK. It mainly deals with natural gas, oils and chemicals
productions, manufacturing and marketing. The following discussion is based on the PESTLE
analysis of Royal Dutch Shell.
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MAIN BODY
Political Factors
This factor aims at the politics and it’s stability that affects the firm in various ways. In
context of Royal Dutch Shell, there are policies regarding climate change which are blocked
through political lobbying by various oil corporations. Moreover, there is instability in the
Middle East and Persian Gulf. So this can be the threat for the firm to grow in this industry
(Christodoulou and Cullinane, 2019).
Economical Factors
This factor aims at the economic conditions all over the world. In context of Royal Dutch
Shell, there are various economic conditions which are differed across the world in both the ways
either positive or negative, but it is affecting the company in a negative manner because of a lot
of variations involvement in a country itself. So this can be the threat for the firm to develop in a
country.
Social Factors
This factor aims at the people who have the variety of perceptions about oil and gas
industry and most of the negative perception in terms of safety and quality. In context of Royal
Dutch Shell, it is difficult for the firm to change the thinking and the mind-set of the people
about this industry. So this can be the threat for the firm to grow in such a social factors of a
country (Düerkop and Huth, 2017).
Technological Factors
This factor aims at the advanced technology and artificial intelligence. In context of
Royal Dutch Shell, technology in terms of battery in this industry is gaining artificial intelligence
with a pace. Moreover, supply chain management is developing through the application of block
chain technology. So this can be an opportunity for the firm to develop in this industry.
Legal Factors
This factor aims at the laws, regulations and data protections in order to keep the security
throughout. In context of Royal Dutch Shell, there are various competition and antitrust laws,
trade compliance regulations and laws and effective laws to protect the data across the world
mainly when the company is operating through it’s various branches in different part of the
world. So this can be the opportunity for the firm to grow in this industry.
Environmental Factors
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This factors aims at the sustainable environment about the climate change and geography
in a country. In context of Royal Dutch Shell, there is rise in sustainability and issues related to
climate change. Moreover, geographical issues which are mainly resulted by the operations. So
this can be the threat for the firm to develop in a country (Widya Yudha and Tjahjono, 2019).
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CONCLUSION
It is concluded that the PESTLE factors which are affecting the firm Royal Dutch Shell are
more on the threat side rather than the opportunity side. Political, economical, social and
environmental factors are giving threats to the firm. Technological and legal factors are giving
opportunity to the firm. If firm focuses more on opportunity part then it can surely overcome it’
threats also. As a result it can improve it’s brand image and loyalty by customers.
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REFERENCES
Books and journal
Christodoulou, A. and Cullinane, K., 2019. Identifying the Main Opportunities and Challenges
from the Implementation of a Port Energy Management System: A SWOT/PESTLE
Analysis. Sustainability. 11(21). p.6046.
Düerkop, S. and Huth, M., 2017. Transportation under Threat–A PESTLE Analysis for Critical
Logistical Infrastructures. ICTA2017, p.14.
Widya Yudha, S. and Tjahjono, B., 2019. Stakeholder mapping and analysis of the renewable
energy industry in Indonesia. Energies. 12(4). p.602.
Online:
What is a PESTEL Analysis?. 2020. Available Through:<
https://corporatefinanceinstitute.com/resources/knowledge/strategy/pestel-analysis/
>./
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