Published by MBA Skool Team, Last Updated: February 07, 2022
PESTLE Analysis of American Express analyses the brand on its business tactics. American Express PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand.
PESTLE analysis is a framework which is imperative for companies such as American Express, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
Let us start the American Express PESTLE Analysis:
The political factors in the American Express PESTLE Analysis can be explained as follows:
Political factors play a very big role when it comes to companies like American Express. There are a lot of factors that affect the company’s profitability and long- term sustainability. Political governance system plays a very crucial role here. The company should make strategies according to the political stability of a country. Local government of a country also becomes important as most of the policies are implemented by them only. Companies like American Express are always under the threat of political instability. Hence, it would be wise to take security measures and precautions like insurance to make up for the losses that might occur because of these attacks. The size of government budgets also impacts the business because the deficit budgets run by the government may increase the inflation in long term.
Below are the economic factors in the PESTLE Analysis of American Express:
Foreign exchange rates can sometimes be a loss bearing factor for the companies.
So, the company should look for forex risks before expanding its business in a new country. Credit binge spending was caused by increasing consumption and stagnating household income in the United States. When People don't have enough money to save, then the culture of saving gets crushed. Amex Express should be cautious when developing a marketing plan based on "Purchase on Credit" consumer behavior. If the unemployment rate is high, it will affect Amex Express's tactics in two ways: first, it will provide enough clients for Amex Express's products, and second, it will make hiring talented and skilled people more expensive.
Following are the social factors impacting American Express PESTLE Analysis:
The quality of work and the degree of income are both influenced by the society's educational level. Better jobs, more income, and higher expenditure on sophisticated and aspirational things are frequently associated with higher levels of education. The quality of products and the cost structures of manufacturing processes typically reflect a company's approach toward health and safety. American Express has strict health and safety standards, thus it may have to compete with players who don't have the same high- cost structures as American Express in emerging markets.
The technological factors in the PESTLE Analysis of American Express are mentioned below:
American Express should examine the country's internet and mobile phone penetration before developing a business plan that is tailored to local demands and realities. Before launching new goods, Amex Express must determine the level of societal acceptability of technology. Frequently, businesses enter the market without the necessary infrastructure to sustain the technology-driven model. Financial technology is on the rise in the past decade and American express has also invested in technology.
Banking and Financial sectors have adopted technology a lot.
Following are the legal factors in the American Express PESTLE Analysis:
American Express should not be concerned about the monopoly and restrictive trade practices laws because it is a new player. Amex Express should evaluate the extent of protection that intellectual property rights receive in the country's legal framework. Before entering a new market, Amex Express must determine what the business laws are and how they differ from those in its home market.
In the American Express PESTLE Analysis, the environmental elements affecting its business are as below:
American Express should try to know how concerned consumers are about environmental issues. It will aid Amex Express in designing ecologically friendly products as well as avoiding public relations stumbling blocks.
Environment standards enforcement agencies play a key role in maintaining norms. However, in emerging countries, these organizations frequently use delaying tactics to extort bribes. American Express should be informed that such activities exist in several countries.
To conclude, the above American Express 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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