Instagram PESTLE Analysis

Published in Companies category by MBA Skool Team

Instagram PESTLE (or PESTEL) Analysis assesses the brand on its business tactics across various parameters. PESTLE Analysis of Instagram examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Let us start the Instagram PESTLE Analysis:

Political Factors:

The political factors in the Instagram PESTLE Analysis can be explained as follows:

With politics being the talk of the town, Instagram provides a great platform for various politicians to easily access a large mass. Easy and influential political campaigns can be set up using Instagram, thus connecting to people worldwide. Various new hashtags are created by various parties to support the various social causes, for a wider reach.

Since the majority of the government leaders, as well as their subordinates, are using actively using Instagram as a part of their PR activity, Instagram is a product that is more Political intervention-free. A change in the political, environmental laws may not affect Instagram unless they directly attack the existence of the app, which seems highly improbable.

Image: pexels

Economic Factors:

Below are the economic factors in the PESTLE Analysis of Instagram:

Instagram has come up as the new ‘advertising platform.’ It's easy, quick, and gives good coverage of people. It’s a way of continuous advertisement, through which the changing trends can be brought to the public at a much faster rate.

The faster one moves, the better the advantage. Paid advertisements were introduced in late 2013 and have been successful since then. According to various studies, there was an estimated 177 percent increase in the revenues through advertisement alone. Influencers is a community that has come up over the past 5 years. Instagram has provided various economic benefits to these influencers, by helping them tie-up with the various brands willing to promote their product among a targeted segment. Various new and unknown products have been marketed via Instagram. Apart from these micro economical points, Instagram has managed to increase the overall GDP by helping provide cheap and effective advertising platform. Easy advertising has lead to easy and increased selling thus increasing the revenues.

Social Factors:

Following are the social factors impacting Instagram PESTLE Analysis:

According to a study conducted by the University of Missouri-Columbia, Instagram users are less likely to engage in political or controversial images. This further helps to rule out the unnecessary noise on the social media platform. It creates a much safer environment, with less stress of being judged based on one’s opinions and choices. Since majority of the users are young, or youth to be precise, a platform with fewer disturbances and more interaction is a major advantage. This is what has helped Instagram grow over the years. Its successful campaign of being a ‘safe place for all your views and ideas from regular day to day life’ has managed to convert more and more people from other social media platforms to loyal users of Instagram. Just like businesses believe in staying up with changing times, its this element that lets its users stay up to date about the changing lives around them.

Technological Factors:

The technological factors in the PESTLE Analysis of Instagram are mentioned below:

Since it’s a free platform, people are allowed to post whatever they like and this has led to certain controversial posts and hashtags getting the hype unnecessarily. But with technological advancement and improved embedded coding scheme, Instagram can identify these trends and restrict them from spreading. E.g. The recent increase in cosmetic surgery and weight loss has been curbed form spreading. The major glitch Instagram faces is on the security end. Though it promotes users to be more protective about their accounts, it itself falls prey to hackers.

competition, digital privacy, censorship, and transparency in political advertising are some issues that the app is facing currently as a result of technological glitches.

Following are the legal factors in the Instagram PESTLE Analysis:

There is a growing concern that fake news makes its entrance to Instagram. During the recent general elections in India, it is claimed that a lot of fake news is circulated through Instagram. Now Instagram has launched a new feature allowing users to report the news which they think contain fake news to its fact checking partners for verification. The government has asked it to remove all the explicit content from its apps and site.

Environmental Factors:

In the Instagram PESTLE Analysis, the environmental elements affecting its business are as below:

Instagram is actively engaging in making the world more aware about its environment. Instagram allows people to share their narrative through photographs and videos. Now today’s environmental storytellers is showing the recent misshaping’s of the environment through pictures and videos and people are now more able to connect with them. Everyday new Instagram accounts with environmental focus pop up.

There are many accounts which are totally devoted to spreading awareness about the environment related issues. Many people don’t know about these issues are now get to know about them. To conclude Instagram has a very strong presence in youth and now with increasing internet users it has a great opportunity to grew its user base.

To conclude, the above Instagram PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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