Published by MBA Skool Team, Last Updated: February 07, 2022
PESTLE Analysis of Facebook analyses the brand on its business tactics. Facebook 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 Facebook, as it helps to understand market dynamics & improve its business continuously. PESTLE analysis is also referred to as PESTEL analysis.
The political factors in the Facebook PESTLE Analysis can be explained as follows:
Facebook may be a big social media platform that permits users to place forth their views and opinions with no restrictions. although it offers users the freedom to precise themselves, some governments and political parties Who need to propagate their personal agenda see it as a threat. They require to unfold biased info which is the reason that some countries like China, Asian country and Iran have disallowed it. Generally, government can also alter the perception of individuals using this platform that ends up in criticism. The expansion of company might even be hindered because of security reasons as a number of the countries are against this on-line sharing of knowledge as it results in breaching users’ privacy. Hence, the corporate ought to work on its knowledge privacy and security measures to expand its world reach.
Below are the economic factors in the PESTLE Analysis of Facebook:
The growth and revenue of the corporate is wedged by economic factors similarly.
Facebook (Meta)’s revenue in 2021 was more than $100 Billion and also the majority of this revenue came from ads that different firms run on the platform. once the economy of a country is booming, the businesses invest in advertising a lot which in turn can make profit for Facebook. However, on the opposite hand, if the economy of a country isn't doing well, firms curb their advertising to an explicit extent and conjointly notice different alternatives to run ads. except that, once individuals also are doing financially well, they obtain new devices to use this platform. Hence, the corporate ought to target the developing countries wherever economies are booming which can generate a lot of revenue.
Following are the social factors impacting Facebook PESTLE Analysis:
The company started off with the aim to supply individuals with a platform to simply connect with their friends and wanted ones. But, within the past few years, individuals have started stating that the platform has currently become simply a method for different firms to push their product/ services. Each time individuals scroll through their feed; they're bombarded with ads rather than the life updates of their friends which is the reason that some individuals have currently begun to like different platforms over Facebook. And there's conjointly the rationale of privacy breaching that, folks are currently afraid to feature any interloper on the platform. Hence, the corporate ought to work on restitution the trust of its users and supply them a lot of users- friendly expertise rather than inundating the platform with ads to make profit.
The technological factors in the PESTLE Analysis of Facebook are mentioned below:
Facebook may be a company primarily based entirely on on-line technology. Hence, heaps of technological factors have an effect on its growth. because the technology is getting more and more advanced, the number of individuals who use smartphones, is growing at a speedy pace and that is a chance for the corporate. However, on the opposite hand, heaps of latest players are coming into the market to boost the social media expertise of users. Firms like Twitter are attracting users which could be a threat for the corporate. aside from that, on-line retail companies have conjointly become a contest for the corporate as they're diversifying with time. So, the corporate must perpetually improve its technology if it desires to retain users.
Facebook has done well in the past to innovate and reach to customers through technology.
Following are the legal factors in the Facebook PESTLE Analysis:
The different laws in different countries affect the company’s growth. As patent laws are improving around the world, it is an opportunity for the company to introduce new products in the market with the expectation of growing its business. As many countries are working to increase coverage of free wi-fi, the company can also access a wide range of areas which were not included before.
However, there is also a threat for the company as many countries are implementing laws to regulate online data sharing and processing because of security reasons.
In the Facebook PESTLE Analysis, the environmental elements affecting its business are as below:
Climate change can be a threat for the company because the company might need to relocate its servers in the near future. Being a company that relies on coal, gas and oil, it may be a great idea to convert into a renewable energy source to cut the carbon footprint. The company can also develop better waste disposal policies to satisfy concerns regarding natural environment.
To conclude, the above Facebook 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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