MKTM028 Strategic Marketing: Aeryon Labs PESTEL Analysis KSA

This report presents a PESTEL analysis for Aeryon Labs' potential entry into the Saudi Arabian market with drone technology. It begins by outlining the PESTEL framework's significance, strengths, and weaknesses. The analysis focuses on the political, technological, and environmental factors crucial to Aeryon Labs' success in Saudi Arabia, considering the country's political stability, technological advancements, and environmental regulations. Challenges such as obtaining licenses and navigating security approvals in a volatile region are addressed, along with economic factors like dependence on oil revenues and recent economic reforms. The report concludes with recommendations for effectively promoting drones and establishing the business in the Saudi Arabian market, emphasizing the need for strategies that align with the country's regulations and cultural context. Desklib offers a platform to explore similar assignments and study resources.

Running Head: Strategic Marketing PESTEL Analysis
AERYON LABS
August
2018
Module
Code
Assignment
Type
Student
name
Student
number
Module
Tutor
Module
Leader
MKTM028-
SUMSD
Strategic
Marketing Pestel
Analysis
Ahmad
Fadlallah 18421095 Iain
Bromley
Dr.
Stephen
castle

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STRATEGIC MARKETING PESTEL ANALYSIS

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Executive Summary
This report will focus over setting up the business of Aeryon Labs in Saudi Arabia and there
organization will mainly introduce drone technology. Prior to the setting up business in Saudi
Arabia, external environmental conditions will be analysed in order to adopt appropriate
strategies for the successful implementation of drone technology in the target market. In relation
to this, first part of the report will analyse the significance, strengths and weaknesses of PESTEL
framework through which appropriate and relevant factors could be selected in relevance to the
market conditions through which decision for introduction of drone technology could be taken.
After examination of PESTLE factors, three crucial factors will be considered as per the
functionalities of organization in relevance with the business expansion in the target market. The
last part of the report will include recommendations in relevance with promoting drones in the
target market along with setting up the business in an effective and efficient manner.

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Table of Contents
Executive Summary ....................................................................................................................................2
Introducing PESTEL......................................................................................................................................4
What is Pestel ?...........................................................................................................................................4
Political ...................................................................................................................................................4
Economic.................................................................................................................................................5
Social ......................................................................................................................................................5
Technological ..........................................................................................................................................5
Environmental ........................................................................................................................................5
Legal .......................................................................................................................................................5
Strengths and Weaknesses of PESTEL ........................................................................................................6
PESTEL analysis of Saudi Arabia...................................................................................................................6
Political ...................................................................................................................................................7
Technological ..........................................................................................................................................9
Environmental.......................................................................................................................................10
Recommendations....................................................................................................................................11
References ................................................................................................................................................13

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Introducing PESTEL
Drone technology is one of the most emerging technologies across the globe. Drone is influenced
with aircraft and they are formally known as unmanned aerial vehicles (UAVs) or unmanned
aircraft systems (UASes). Apart from this, drone is also considered as a flying robot as these
could be controlled through a software-controlled plans which is fitted in their embedded
systems and these are operated in conjunction with sensors and GPS. Drones are considered as
the disruptive innovation and it is one of the biggest achievements of technology. Drone
technology could be used in various sectors through which positive outcomes could be
originated. In this report, drone technology will be launched in Saudi Arabia by Aeryon Labs
with the objective of business expansion. Aeryon Labs have chosen Saudi Arabia for
introduction of drone technology due to high scope of technology as well as due to favourable
and stable political conditions (The Economist Intelligence Unit Limited, 2018).
This report will aim over determining the scope of drones in Saudi Arabia with the help of
certain factors of PESTEL analysis. PESTEL analysis is a crucial framework for evaluating
external environmental conditions of a particular place. It consists of political, economic, social,
technological, environmental and legal factors. Science, technology and innovation are primary
pillars of Saudi Arabia’s growth and development (International Trade Administration, 2018).
Across the globe, intellectual property is being considered as stimulus for innovation and
creativity. These factors encourage fair competition as it positively influences global economy
and it also helps in developing new and innovative products and methods. Saudi Arabian
government always promotes and encourages technology with the objective of originating
opportunities in terms of moving towards advancement and it also help the organization to
enhance its performance (Alsodais, 2013). Although, modern technologies have pros as well as
cons and to avoid misuse of modern technology, government of Saudi Arabia have implemented
certain rules and regulations. Misuse of modern technology could create negative impact over
Saudi culture, thus, PESTEL analysis will be executed for the motive of evaluating the impact of
all factors which could affect business of Aeryon Labs in order to take appropriate market entry
and other relevant strategies for the successful establishing business in the Saudi Arabian market.

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What is Pestel ?
It is framework mainly used for evaluating impact of macro environmental factors. Primarily
used by business organizations for analysing the conditions of target market so that appropriate
strategies could be adopted for the attainment of desired goals and objectives (Rastogi & Trivedi,
2016).
Political
Political environment is being scanned to analyse policies, regulations and laws imposed by the
political parties which could affect business’ growth directly or indirectly.
Economic
This is the most crucial factor as it attracts FDIs, multinational corporations to invest or set up
their business respectively. Economic factors include interest rate, exchange rate, GDP, etc.
attributes (Gheibi, et. al., 2018).
Social
Social factors include consumer’s behaviour, their purchasing pattern, demand and preferences
of consumers, etc. These factors are changing rapidly, thus, it is required for the organization to
pace up their functionalities in order to match up with the dynamic social environment
conditions.
Technological
Due to revolutionary change introduced by internet in almost every sector, technological sector is
one of those revolutionary changes which have both positive as well as negative impact over the
organizational performance (Fozer, et. al., 2017).
Environmental
This is one of the trending issue and challenge for every sector, industry as well as for business
enterprises, thus, in order to attain desired goals and objectives, appropriate green strategies
needs to be adopted (Aithal, 2016).
Legal
This factor describes rules, regulations and restrictions for the particular market and the impact
of legal factor is much high in comparison to other factors over organization (Gray, et. al., 2016).

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Strengths and Weaknesses of PESTEL
Strengths Weaknesses
· User friendly and this model are easy to
understand.
· It helps in evaluation of macro
environmental factors which could
affect organizational performance.
· With the help of outcomes originated
from PESTEL analysis, companies
could adopt relevant strategies in order
to sustain in the business environment
for longer period of time.
· External environmental scanning is a bit
lengthy and costly process.
· Needs to be carried on a regular basis
through which policies of the
organization could be implemented for
the objective of attaining positive
outcomes on regular basis
(Gasiorowski, 2016).
PESTEL analysis of Saudi Arabia
With regards to the market conditions of Saudi Arabian market, this analysis will majorly focus
over political, technological and environmental factors as Aeryon Labs is planning to introduce
drones in Saudi Arabian market. Company’s business will mainly be influenced by these three
factors as per the basis of their nature of work; thus, following are the details of these factors
which would replicate the conditions of the target market so that desired goals and objectives
could be attained:

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Political
Saudi Arabia is a politically stable country which follows monarchy. Saudi Arabia is majorly
known for largest oil reserves and across the globe; it stands on the second position. Apart from
this, Saudi Arabia is the sixth largest natural gas reserves in the world. Saudi Arabia has positive
business environment along with excellent infrastructure which attracts multinational companies
to invest as well as to set up their businesses in the Saudi Arabian countries. Initially, Saudi
Arabian market was known for its oil related activities but later on, they have diversified their
economy towards non-oil sector which has generated opportunities for other sectors as well.
Amongst them, one of the sectors encouraged and promoted by the government of Saudi Arabia
is technology (Time Inc, 2018). Saudi Arabia is one of the giant players in the technological
sector across the globe through which innovations related to technology are much appreciated
and adopted by the government of Saudi Arabia.
Political conditions and regulations for local as well as for international business entities are
friendly in Saudi Arabian market which attracts multinational corporations to expand their
business. The government of the nation has a consistent and long commitment to liberal
economic and pro-business policies which also includes the protection of intellectual property
rights. Primary concern in Saudi Arabia for Aeryon Labs is obtaining license for introducing
drones in the target market. Setting up business in the selected marketplace is a big opportunity
for Aeryon Labs as recently an incident has taken place with an unmanned aerial vehicle which
was flying near to King Salman’s royal palace has left lawmakers to put the new legislation.
Now interior ministry has introduced certain regulations to warn drone enthusiasts for getting
permission before executing any activity through drone (Franke, et. al., 2015).
One of the problems facing this service is the company's permits and security approvals. It is
known that the Middle East is one of the most volatile places for the political situation, a region
that has been burning for many years. Saudi Arabia is one of the countries targeted for terrorist
operations. Saudi Arabia has faced these attacks with all its might and has managed in years to
eradicate this phenomenon, which lasted for several years. Saudi Arabia has been facing a war in
Yemen for three years and Riyadh has been targeted several times by rocket attacks from
Yemen.

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Which means that the Kingdom will think well before granting these approvals and permits, and
there will be strict regulations to ensure the safety of the Kingdom and society.
Saudi Arabia has a good economy, the problem lies in the fact that the main source of income
and GDP is oil, which makes the kingdom quickly affected in the event of a drop in oil prices
globally. As a result of the decline in oil prices since 2014,The Kingdom faces major economic
challenges and budget deficits. In recent years, Saudi Arabia has embarked on a new vision
called 2030 with a number of economic measures aimed at bridging the budget deficit and
reaching an economic level not dependent solely on oil. While the reforms were selective
taxation, the Red Sea project, and added tax as it sought to raise non-oil revenues and cut
spending to fund its $ 72 billion plan to diversify the economy. Simon Kiir in Dubai June 8, 2016
But diversity has begun in an easy way by imposing progressive taxes on foreigners working in
Saudi Arabia and their families. Saudi Arabia began to impose a monthly tax on families of
foreign nationals working in the private sector and its employees, valued at about $ 26.6 per
month for each family member. The tax increases annually to $ 106.6 per person in 2020,
New tax imposed on many consumer products. As of January 2018, companies in Saudi Arabia
will have to pay VAT on their sales by 5%. Increase prices on electricity and gasoline to double
the value and price of these products As 100%.
Which has recently led to a situation of reverse migration of many residents in Saudi Arabia,, Al-
Mursad newspaper - A bank report estimated the number of foreign workers leaving Saudi
Arabia about 670 thousand people until 2020. According to a report by Saudi France Bank, the
rate of leaving foreign workers will be about 165,000 workers per year, the Saudi newspaper
Makkah reported.The fee for the companions will save about 20 billion riyals over the next three
years, the report said.The number of foreigners in the Kingdom is about 11.7 million, of which
7.4 million are workers, while 4.3 million are 1.1 million families.
Technological
International business corporations have shown their interest in terms of investing in Saudi
Arabian market due to emergence of key opportunities for partnership in numerous sectors

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including healthcare, technology and manufacturing. Thus, Aeryon Labs which is one of the
giant players of manufacturers of Drone across the globe has decided to invest in Saudi Arabian
market as well as for establishing their business over there. Drone is useful in almost industries
including healthcare, manufacturing, e-commerce industry and it is also useful for government
(Mabon, 2015). There are various scenarios related to natural calamity or during any illegal
activity, government needs to hire aircrafts in order to distribute relief amongst the target
audience. The major challenge in these scenario faced by government is that they are only able to
serve in one particular area but if drones will be used in place of aircrafts, it will be bit easy as
well as cheap platform to provide relief packages such as food to the sufferers. Saudi Arabia
represents the largest IT market across the region with strong growth in enterprise and consumer
end markets. Huge public investments in health, infrastructure, and education has paved the way
for advanced technology and security systems in the country along with the government planning
to boost up the contribution to the GDP from the industry by 20% by 2020. IT market in the
country was valued at $3.6 billion in 2011 which crossed the set mark of $4.9 billion after 2014.
This mark will be increased in the future as expected and on the basis of growth rate in the IT
market. Thus, Aeryon Labs will easily be able to transact in Saudi Arabian market in order to set
up its business along with fulfilling their primary objective of introducing drones in the target
market (Nizami, et. al., 2015).
The Kingdom of Saudi Arabia is moving towards electronic governance and has come a long
way in this area. Today, Saudi citizens or even residents in Saudi Arabia are following all their
documents through the Internet. Electronic governance has provided a great deal of effort and
time.
This shows that the society and government are keeping pace with the rapid development at the
technological level.
With vision 2030, the Kingdom embarks on a technology-driven economic transformation.
Saudi Arabia has embarked on a major investment push into technology,In the Saudi’s Vision
2030, the aim of the government is to create a suitable environment for the growth of small and
medium enterprises. The hope is to use this as an avenue for increased job creation amongst the
country’s citizens. In this regard, IT is expected to play a critical role in ensuring that the
government’s objectives are achieved without a hitch.Technology will be a key enabler and
driver of the numerous changes envisaged by Vision 2030, with the goal of developing the

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nation’s digital infrastructure and stimulating the related economic sectors, industries, and
private sector entities.
Environmental
Saudi Arabia is the largest country in the Middle East. Country has always lacked with
appropriate environmental policies and as the country is mainly known for large oil reserves and
due to intense usage of fossil fuels, country has generated numerous environmental issues. These
issues have ultimately led the citizens of country towards hazardous diseases including asthma,
cancer, etc. With regards to this, government has taken some actions like construction of
renewable energy and new policy development to ensure environment suitability (Khan, et. al.,
2017).
Thus, government thinks twice before approving new project in the country but as drone
technology does not lead to any type of pollution or emission of disastrous gases, etc. Infect this
technology will help the government to reduce the pollution through which environment
sustainability will be promoted. Drones could be used in healthcare industry in providing
emergency services, by construction industry for transporting adequate material from one place
to another, in manufacturing firm for keeping the products in the warehouse as well as for
loading and unloading the trucks for distributing the products from one place to another. Further,
drones could be used in almost every sector and in the future, drones flying in the air will look as
normal as trucks and other vehicles look alike on roads (Alkhater, Wills & Walters, 2014).
Saudi Arabia is famous by hot temperature, sand storms, and harsh weather and this must be
taken into consideration for the company, by offering a product that is compatible with this harsh
and extreme environment at times.
We known that Saudi Arabia is characterized by vast areas, located in one of the largest deserts
in the world, which means that Drone technology is an important opportunity to solve this
problem, and benefit from the low cost of the value of shipping goods and save time and money.
Recommendations
It has been summarized that organization is planning to introduce drones in the Saudi Arabia
with the objective of expansion of their business but due to strict rules and regulations,

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organization would require implementing certain changes in its policies, rules and regulations so
that desired goals and objectives could be attained. In order to sustain for longer period of time in
the target market, following recommendations needs to be consider by organization:
· Positively accepting all the rules, regulations and policies issues by Saudi Arabian
government in order to set up an effective position in the target market (Alwagait,
Shahzad & Alim, 2015).
· Enhancing quality for the drones will be another requirement for attaining sustained
growth and overall development in the target market.
· IT industry of Saudi Arabia is increasing rapidly and with regards to this, it will be
necessary for the organization to pace up their functionalities as change occurred in the
target market. This will help the organization to gain positive outcomes as well as to
attain competitive advantage.
· Employee empowerment and employee engagement is another crucial factor which
needs to be required for the organization to attaining appropriate goals and objectives
(Alkhathlan & Javid, 2015).
· Saudi Arabia does not have appropriate environmental policies with regards to control
emission from their primary activity i.e. generating oil and other gases. Thus, if
organization will come up with a creative and unique campaign to promote drones in the
market, it may help the organization to set up its effective position in the target market
along with grabbing a large market share (Alrashed & Asif, 2015).
· Apart from this, it is required for every organization to follow rules and regulations with
regards to international expansion of business through which appropriate place could be
set up in the target market. It will help Aeryon Labs to establish its international presence
along with the objective of gaining competitive advantage in the selected marketplace.
· (R - STP - MM - I - C ). Research - Segmentation Targeting Positioning - Marketing mix
or 4P’S - Implementation - Control .Effective marketing begins with research R, but
research in marketing reveals many parts of the market S, that are made up of clients
who have different needs. The company is rational if you target T, only those parts that

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can be satisfied in a professional way. The company must offer P each segment or
segment of the market its products and products so that the target customers can estimate
the difference of their exhibits from the competitors' displays. STP represents market
segmentation, targeting and image stabilization of the company's strategic marketing
thinking. Now the company develops its own tactical marketing mix MM that consists of
a mix of decisions about products, price, location and promotion. The company then
executes I any marketing mix. Finally, the company sets the standards for monitoring C ,
evaluating results, developing the retail strategy, targeting, and stabilizing the product
image STP and its tactics on the marketing mix MM. (Kotler, P. (2012) Marketing
Management).

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References
Aithal, P.S., 2016. Study on ABCD analysis technique for business models, business strategies,
operating concepts & business systems.
Alkhater, N., Wills, G. and Walters, R., 2014. Factors influencing an organisation's intention to
adopt cloud computing in Saudi Arabia. In Cloud Computing Technology and Science
(CloudCom), 2014 IEEE 6th International Conference on (pp. 1040-1044). IEEE.
Alkhathlan, K. and Javid, M., 2015. Carbon emissions and oil consumption in Saudi
Arabia. Renewable and Sustainable Energy Reviews, 48, pp.105-111.
Alrashed, F. and Asif, M., 2015. Analysis of critical climate related factors for the application of
zero-energy homes in Saudi Arabia. Renewable and sustainable energy reviews, 41, pp.1395-
1403.
Alsodais, S. 2013. Science, Technology & Innovation in Saudi Arabia [online]. Available at:
http://www.wipo.int/wipo_magazine/en/2013/05/article_0006.html. [17/08/2018].
Alwagait, E., Shahzad, B. and Alim, S., 2015. Impact of social media usage on students
academic performance in Saudi Arabia. Computers in Human Behavior, 51, pp.1092-1097.
Fozer, D., Sziraky, F.Z., Racz, L., Nagy, T., Tarjani, A.J., Toth, A.J., Haaz, E., Benko, T. and
Mizsey, P., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS process
alternatives. Journal of Cleaner Production, 147, pp.75-85.
Franke, R., Kroenung, J., Born, F. and Eckhardt, A., 2015. Influential factors for e-government
success in the Middle East: Case study evidence from Saudi Arabia. International Journal of
Electronic Government Research (IJEGR), 11(1), pp.39-62.
Gasiorowski, M., 2016. The government and politics of the Middle East and North Africa.
Hachette UK.
Gheibi, M., Karrabi, M., Mohammadi, A. and Dadvar, A., 2018. Controlling air pollution in a
city: A perspective from SOAR‐PESTLE analysis. Integrated environmental assessment and
management.

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Gray, S., O’Mahony, C., Hills, J., O’Dwyer, B., Devoy, R. and Gault, J., 2016. Strengthening
coastal adaptation planning through scenario analysis: a beneficial but incomplete
solution. Marine Policy.
International Trade Administration. 2018. Saudi Arabia - Information and Communication
Technology [online]. Available at: https://www.export.gov/article?id=Saudi-Arabia-information-
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Khan, M.Z., Nizami, A.S., Rehan, M., Ouda, O.K.M., Sultana, S., Ismail, I.M. and Shahzad, K.,
2017. Microbial electrolysis cells for hydrogen production and urban wastewater treatment: A
case study of Saudi Arabia. Applied energy, 185, pp.410-420.
Mabon, S., 2015. Saudi Arabia and Iran: power and rivalry in the Middle East (Vol. 132). IB
Tauris.
Nizami, A.S., Rehan, M., Ouda, O.K., Shahzad, K., Sadef, Y., Iqbal, T. and Ismail, I.M., 2015.
An argument for developing waste-to-energy technologies in Saudi Arabia. Chem. Eng.
Trans, 45.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
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(IRJET), 3(1), pp.384-388.
The Economist Intelligence Unit Limited. 2018. Saudi Arabia [online]. Available at:
http://country.eiu.com/Saudi%20Arabia. [17/08/2018].
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Regulations [online]. Available at: http://www.thedrive.com/tech/20401/drone-incident-at-saudi-
royal-palace-speeds-up-finalization-of-new-regulations. [17/08/2018].
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cm

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