Globalisation and SASOL: A PESTLE Analysis of Business Environment

This report provides a comprehensive analysis of the impact of globalisation on SASOL, a South African energy and chemical firm, using the PESTLE framework. It examines the political, economic, social, technological, legal, and environmental factors influencing SASOL's operations in the global business environment. The report highlights key driving factors of globalisation, such as cost and technological drivers, and discusses challenges during global expansion, including managing employee immigration, marketing and communication difficulties, and intense competition. Ultimately, the study concludes that globalisation has significantly altered commercial practices, making the market more diverse and complex, and emphasises the importance of strategic tools like PESTLE analysis for understanding and navigating these changes. Desklib offers similar solved assignments and past papers for students.

Global Business Environment

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• Globalisation has enabled the free flow of
products and services across many nations,
allowing markets in diverse locations to
expand their operations.
• SASOL is a South African firm that generates
energy and chemicals. It was founded in the
1950s and is located in Sandton.
• PESTLE Analysis will be used in the report to
illustrate and demonstrate the impact of
globalisation on a company like SASOL.
• It will also discuss the business implications
of digital technology. It also highlights the
obstacles and complications that
globalisation brings to organisations like
SASOL, as well as how these can be
overcome.
Introduction
The global business environment can be defined as a
market that is developed as a result of the
interconnection and linkage of many nations
throughout the world.
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PESTLE Analysis
• PESTLE analysis is a strategic tool used by
marketers to assess external environment
elements that affect the organizations and
commercial strategies. SASOL's PESTLE
study will take into account the following
crucial variables that will aid in making
informed decisions.
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PESTLE ANALYSIS
Political
• This is a factor that refers to the government's engagement in
influencing a certain industry or corporation through tax
policies, trade restrictions, reforms, and environmental rules,
among other things.
• Government policies and tax rates enable SASOL to maintain
its competitiveness by managing product costs and providing
assistance for growth and development.
• However, due to changes in government, taxes are sometimes
raised, resulting in lower sales and income.
Economic
• This component is related to the company's and its business's
economic growth, which is influenced by interest rates,
currency rates, inflation, wage rates, and other factors.
• In the case of SASOL, an increase in inflation would have an
impact on the company because people's purchasing power
would be reduced due to high product costs.
• The company's ability to take out loans for expansion and
development is also influenced by interest rates. However, as
interest rates fall, consumer purchases and consumption
patterns improve, assisting in the growth of the company's
revenues
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PESTLE analysis is a strategic tool used by marketers to assess external environment elements that affect the organizations
and commercial strategies. SASOL's PESTLE study will take into account the following crucial variables that will aid in
making informed decisions.

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Continue…..
Social
• This refers to the consumer standards that govern demand and
behaviour, such as demography, cultural norms and
expectations, health consciousness, and safety, among other
things.
• In terms of SASOL, young individuals are mostly
advantageous since they are more talented and educated.
• As a result, they will focus more on affirmative intake that may
provide a business with a competitive advantage due to its
distinct rivalry position or placement.
• Consumers who are in a high cognitive state are more likely to
buy superior products that will lead to repeat purchases.
Technological
• This refers to the company's operations being influenced by
innovation, automation, and research and development.
• Not only should technology be improved, but new
manufacturing, distribution, and supply techniques should be
implemented as well.
• SASOL, for example, can take advantage of the chances
afforded by social media marketing to raise awareness of the
company's goods or products.
• Furthermore, it brings digital transformation innovation to the
petrochemical industry, resulting in a gain in market share by
focusing on future innovation.
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Continue…..
Legal
• This includes labour laws, consumer protection laws, and
health and safety regulations, among other things.
• SASOL adheres to employee/labour health and safety
legislation because many countries have rigorous rules in place
to ensure employee safety.
• Furthermore, it safeguards employee intellectual property
rights, which aid in gaining an advantage over competitors and
increasing profitability.
Environmental
• This element may be influenced by the surrounding
environment, such as weather conditions, temperature, and
climate change, among other things.
• In the case of SASOL, the firm is forced to increase its
operating costs due to weather conditions that may influence
consumer spending behaviour, causing the company to adjust
its product and marketing tactics.
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Key driving
factors of
globalization
Cost drivers: As the level of competition rises, businesses look for ways to save money. When companies create
the same products for a large market, they gain from economies of scale. Firms must invest heavily in promoting
their products on a global scale. However, for services that are mostly focused on people, cost driver may be less
applicable. Economies of scale tend to be lower in this situation, and experiences tend to be flatter.
Technological driver: The internet allows for quick access to products and services from anywhere on the planet.
Due to e-commerce and electronic banking, it is now possible to conduct transactions with ease following
globalisation. Every merchant can use a social media platform that is easily accessible to buyers to advertise their
goods and services.
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Challenges during global expansion
Managing employee immigration: While internationalising, immigration generates a lot of
headaches, and it's one of the top difficulties for US and UK IT CEOs, according to 28% of
them. Immigration regulations are continually changing, and secularising visas for
members and workers of foreign descent is particularly challenging in many countries.
Marketing and communication challenges: Due to communication barriers, organisations
growing globally encounter difficulty in efficiently selling their products. Due to the
company's communication issues in the international market, marketing becomes
challenging.
Intense competition: Many businesses may have issues in a specific location inside a
country, but they may not experience challenges in the international market. As a result, a
corporation could transfer to the foreign market in order to increase revenues and business
success.
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CONCLUSI
ONGlobalization has altered commercial practices, and the market has become
more diversified and complex. PESTLE analysis was used in the research to
identify the effects of globalization on businesses. Furthermore, it had been
examining crucial aspects of globalization such as rapid technological
breakthroughs, deregulation, expanded worldwide market prospects, and so
on.
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THANK- YOU
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