Marketing Strategies of USA: PESTEL Analysis and Recommendations

This report presents a PESTEL analysis of the United States of America, examining the political, economic, social, technological, environmental, and legal factors that impact the marketing strategies of international firms operating within the country. The analysis highlights the USA's dominant position in the global market, particularly in terms of political, economic, technological, and legal influence. The report delves into specific aspects such as the stable political system, economic strength, social demographics, technological advancements, environmental considerations, and legal regulations. It also discusses the challenges and opportunities present in the US market, including political interventions, economic fluctuations, social issues, and environmental concerns. The report concludes with recommendations for international firms looking to enter or expand within the US market, suggesting promising sectors and niches.

Running head: MARKETING STRATEGIES OF USA
MARKETING STRATEGIES OF USA
Name of the Student
Name of the University
Author note

1MARKETING STRATEGIES OF USA
Executive summary
The purpose of this report is to form a PESTEL analysis of USA. This PESTEL
analysis will help to determine aspects of the political, economic, social,
technological, environmental and legal environments of USA, affecting the marketing
strategies of the international firms operating in USA. From the analysis it can be
observed that USA is the global leader and dominates other countries in terms of
political, economical, technological and legal powers. Although USA faces some
competition from countries like China, India and South Korea, it continues to
dominate all other nations in the world in terms of attracting international firms.

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Table of Contents
Introduction...................................................................................................................3
Discussion.....................................................................................................................5
PESTEL analysis of USA..........................................................................................5
Political factors......................................................................................................5
Economic factors...................................................................................................6
Social factors.........................................................................................................7
Technological factors............................................................................................8
Environmental factors............................................................................................9
Legal factors........................................................................................................10
Conclusion..................................................................................................................11
Recommendation........................................................................................................12
References.................................................................................................................13

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Introduction
International marketing can be described as the activities undertaken by the
business to formulate strategies, set the price, promotional activities and manage the
work process manufacturing and delivering the products and services respectively,
to customers based in several nations. The main significant feature of international
marketing is that the marketing functions occurs in various international markets.
However, the business objective remains the same such as earning profits through
merchandising in the target market.
PESTEL represents the acronym of Political, Economic, Social,
Technological, Environmental and Legal. It is a tool for marketers used in analyzing
and identifying these macro environmental factors, which effect on the business
operations. The analysis of these factors is used for developing the SWOT analysis
(Shatskaya, Samarina and Nekhorosheva 2016).
The United States of America includes 5 territories, 50 states and 1 federal
district. The federal government governs these states and the federal district. Donald
Trump is the president of these constitutional republic countries. USA is one of the
major economies across the globe and hence has a huge influential power in the
international market. Due to the developed economy system, large number of
potential customers and a diverse set of culture USA becomes the center of
attraction for many international businesses. Sectors such as finance, transportation,
chemical products, depository institutions and wholesale attract these international
businesses to USA.
This report illustrates the marketing strategies of USA with respect to
international marketing. These marketing strategies are developed after forming a

4MARKETING STRATEGIES OF USA
business environment audit of USA using PESTEL analysis. Recommendations are
also provided along with it.
Discussion
PESTEL analysis of USA
If the GDP is taken into consideration, then USA is the largest economy
across the globe. This nation is the political and economic giant of all other nations in
the world. In addition, USA is constantly funding institutions such as the World Bank
and United Nations Organization. USA is one of the developed nation and is
worldwide famous for the technological and infrastructural excellence. This PESTEL
analysis for USA will identify and analyze the political, economic, social,
technological, environmental and legal problems related to USA.
Political factors
Political factors are the extent of governmental intervention in the country. It
consists of government regulation, policies, taxation policy, trade barriers, foreign
trade policy, labor laws and political instability in the foreign market. These external
factors affect the operations of an organization (Fosher 2018). USA holds the
position of being the second largest democracy across the globe. The president has
the highest administration rank in the US and gets elected for a term of four years.
The elections held are free from any kind of bias and favorism. Therefore, a stable
political system exists within USA. USA also influences the political functions of other
countries. USA promotes and spreads the idea of democracy in several countries
across the world (Savage and O’Connor 2015). Along with the stable political
system, USA also has the infrastructure and advanced technology, which makes
USA as an attractive destination for foreign direct investment (FDI). Therefore, USA

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is always the first choice for various multinational companies in making foreign direct
investment for a longer period of time. However, the political system also faces some
criticism from some countries due to their interventionist policies, which hampers the
foreign relations by triggering the terrorists group and generating threats for
terrorism. The administration of president Trump is facing distraction from the
Democratic House. The members of the House face challenges while passing a bill,
which will fund the operations, carried out by the government for the country. The
legal competition among administration of president Trump, the Congress and the
Democratic House hampers the consumer buying behavior and businesses in the
country (Peck 2014).
It can be concluded that although USA faces some challenges yet it exercises
strong political control across different countries in the world. The country also has
advanced technology and infrastructure, which attracts foreign direct investments
from several multinational companies.
Economic factors
Economic factors refer to the factors, which affect the economy of a country.
These factors consist of inflation rates, economic growth, unemployment rates,
exchange rates, interest rates and income of the consumers. All these factors either
have a direct or indirect impact on the organization. Moreover, it affects the pricing
strategy of the company (Shatskaya, Samarina and Nekhorosheva 2016). USA is
one of the biggest economies across the world due to their nominal GDP (Tiwari and
Mutascu 2014). Besides political dominancy, the country also exercises strong
economic control over several countries across the globe. Multinational companies
such as Google, Microsoft, Facebook, Coca Cola, Apple, Subway and McDonald’s
control their business operations around other parts of the world from USA.

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However, in the year 2009, the country faced recession and businesses collapsed
leading to an increase in unemployment rates. In the recent times, things have
changed the unemployment and income levels have improved. The business firms in
USA were facing problems from scarcity of cheap labors therefore the businesses
started outsourcing their business activities in different other countries. The rapid
change in the global economic landscape has become challenging for USA. The
trade war between USA and China, standoff between USA and Iran, implementation
of Brexit and other geographical risk creates possibility for another recession period
in the USA along with other countries as well. The increasing deficit in the budget
has put the country’s economy at risk and the amount in deficit is $506 million
(Roxana 2015).
Hence, from USA’s economic analysis, it is concluded that USA has an
advanced economic system, which is largely depended on the manufacturing and
service industry. Although faced with recession USA has made a strong comeback
and is still now the largest economy in the world.
Social factors
The social factors refers to the demographic characteristics, customs, beliefs,
values, norms and regulations of the society and people in which the organization
operates. It consists of factors like population growth, income distribution, lifestyle,
attitudes, career, age distribution, health consciousness and cultural barriers. These
factors are necessary for formulating market strategies to acquire new customers,
extend their product base, or target some other location (Menet 2016). After China
and India USA is the third most populated country in the world. The increasing
growth in aging population due to declining fertility rates and mortality rates is a big
concern for USA as it causes shortage of labor supplies (Acemoglu and Restrepo

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2017). Being a diverse country USA is home to various African, Native American and
Asian people. One out of every three people in USA belongs to some other country.
The education structure and health care facilities in USA is considered as the best in
the world. However, this education and healthcare facilities are certainly neither free
nor cheap for these people. USA also faces other social issues such as the most of
the people in USA have obesity and diabetes. Therefore, a large number of people
are health conscious nowadays. According to the recent trends and consumer’s
demand, the food industry needs to provide organic food, which are healthy and
tasty, to satisfy the consumer needs. Majority people have a liberal mindset yet racial
discriminations can be observed within the country. Along with racial tensions, there
also exists socio-economic mobility (Bailey, et al 2017). USA also faces issues
relating to illegal immigration as currently almost 11.7 million plus people are residing
illegally in USA.
Therefore, it can be concluded that USA being the third most populated
country in the world is facing some serious social issues. The country becomes
beneficial for educational institutions and healthcare centers as they can generate
more income from the population. However, the food and agriculture industry would
need to make changes in their products and the manufacturing and service industry
would face dearth of labor supply.
Technological factors
The change and advancement in technology, innovation, research and
development and automation affects the business operations as well as the market.
These factors caution the marketers before entering into a certain market or
launching a new product. It affects the process of manufacturing or delivering a
product or service (Dockalikova and Klozikova 2014). In the field of technology and

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science also, USA dominates all other countries in the world. Due to the fascination
of Americans in advanced technology, various technology tycoons such as Microsoft,
Facebook, Apple and Google have realized this gap and needs of the people. Thus,
these companies started their business operations in America and emerged as
global leaders in today’s time. In the recent years technology has been changed and
it keeps on being updated in order to cope up with this change these leading
companies have set up production facilities and operating activities in several other
countries. The change in the business operations has enabled these companies to
reduce their costs of production (KHINDO 2017). While this has upset the
Americans, as USA is facing strong competition from some of the Asian countries
such as China, India and South Korea. USA also excels in fields of IT,
biotechnology, nanotechnology and environmental technology (Liu and Guan 2016).
In spite of facing competition from these developing countries, USA continues
to maintain a technology supreme on their competitors. Therefore, USA is still a
good spot for establishing technology companies.
Environmental factors
The increasing awareness and conscientiousness against environmental
pollution, carbon emissions, dearth of raw materials and other pollution control
measures set up by the government constitute for the environmental factors. It also
includes environmental factors such as climate and weather. USA has a diverse set
of wildlife, geography and climate. Due to this diversity mixed with several other
factors helps to draw tourists in millions to this country. In 2019, it was recorded that
a total of 79.62 million tourists have visited USA (Stepchenkova and Shichkova
2019). People from countries such as Japan, United Kingdom, Canada, China,
Mexico and Brazil visit USA the most. However, the country faces some tough

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climate and weather conditions since the year 1980. Every year, USA faces more
than 10 climate disasters (Baker and Williams 2015). These weather and climate
disasters such as hurricanes, wildfires leads to severe damage to the people,
property and nature, which causes huge monetary losses over $1 billion, for the
country (Fraver, et al 2017).
It can be concluded that the environmental factors serve as a boon as well as
a curse for USA. While the splendid travel destinations in USA is attracting millions
of tourists in the country in every year, the harsh climate and weather causing
frequent disasters leads to loss of life, property and money.
Legal factors
Legal factors are different from the political factors as they include the
discrimination laws, health and safety laws, employment laws, consumer protection
laws, copyright laws and antitrust laws. These factors enable an organization to
function legally and ethically (Nurmi and Niemelä 2018). USA adheres to a strict
regulation policy. Every state in USA have their own structure of government and
legal policies. The Americans, entrepreneurs and businessmen are aware of the
prevailing rules and regulations which would affect their daily life and selling of
products and services. The businesses need to be operated within the regulated
environmental policies of the respective state. As USA is home to a diverse range of
people, therefore the country maintains equality while treating the nationals as well
as the immigrants. The foreign businessmen and the employees also faces an
unbiased judicial trial in USA. The legal system of USA also protects the Intellectual
Property Rights. However, foreign businesses also faces challenges such as
requiring higher investment to maintain stability in the US market, products such as
cosmetics, electrical equipments, toys and food require insurance cover before

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selling to the end users. The businesses also need to adhere to the regulations set
up by the government such as FDA, USDA, CPSC and EPA (Caiazza, et al 2014).
Hence, it can be concluded that the US society is a strict regulated one. This
may not cause huge problems for the domestic companies. However, the foreign
enterprises carrying out their business activities in USA need to follow various laws
and regulations. In spite of all these regulations USA promotes equality for both
domestic and foreign enterprises and maintains an unbiased judicial system. Thus
attracting foreign investment without causing any fear.

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Conclusion
Hence, from the above PESTEL analysis of USA, it can be observed that USA
has the supreme power in politics, economy and technology. USA has a stable
political environment, advanced infrastructure, advanced digital technology and
highest GDP due to which it becomes a favorable spot for most of the multinational
companies to set up their operational activities in USA. However, recently USA is
facing stiff competition from the rising economies like China, India and South Korea.
Setting up a multinational corporation in these countries would be profitable as these
countries are a source of cheap labor due to their population number. These
countries also demand for advanced technology and have abundant resources. The
multinational corporations have set up their operational activities in these countries
due to the huge market segment and cheap availability of labor and other resources.
In spite of these competitions, USA continues to be world leader in terms of
attracting international firms. The legal system of USA is also free from any sorts of
biasness and promotes equality for both domestic and foreign enterprises thus
inviting international firms without any fear.