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What is PESTLE Analysis?

PESTLEis a mnemonic which in its expanded form denotes P

for Political, E for Economic, S for Social, T for Technological, L
for Legal and E for Environmental. It gives a birds eye view of
the whole environment from many different angles that one
wants to check and keep a track of while contemplating on a
certain idea/plan.

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Source: EY Report on Indian Steel Industry
2017
 There are certain questions that one needs to ask
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while conducting thisanalysis, which give them an
idea of what things to keep in mind. They are:

What is the political situation of the country and how can it affect the
industry?
What are the prevalent economic factors?
How much importance does culture has in the market and what are its
determinants?
What technological innovations are likely to pop up and affect the market
structure?
Are there any current legislations that regulate the industry or can there be
any change in the legislations for the industry?
What are the environmental concerns for the industry?
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Source: EY Report on Indian Steel Industry
2017
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Political

The Indian Government plans to provide an enabling

environment and introduce measures such as single e-window
and creation of special purpose vehicles (SPVs) to meet the
most significant challenges of land acquisition, regulatory
approvals and infrastructure access.
Growth in the private sector is expected to be boosted by new
policies on Make in India, import of foreign technology and
foreign direct investment (FDI). The Government has mooted a
perspective plan to boost domestic steel capacity to 300mt per
annum by 2025.

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Source: EY Report on Indian Steel Industry
2017
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Economic

In the current economic environment, the availability of large

investments in India at reasonable costs is a challenge.
Cost of capital is much higher in India due to a relatively high
interest rate regime whereas countries such as the US and
Europe are providing almost zero interest rates for the
manufacturing industry to recover.

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Source: EY Report on Indian Steel Industry
2017
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Socio-Cultural

Steel Industry is responsible for generation of employment

opportunities.
Because of the working conditions the people which are employed
in the steel industry faced many health and many industries are
not paying the attention on the health of the employees.
Any kind of the allowances are not given to the employees.
Steel industry is responsible for the development in the rural
sector which leads to the rise in the standard of the living of the
people.

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Source: EY Report on Indian Steel Industry
2017
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Technological

India lags in terms of innovating new technologies for steel

production, largely due to a lack of investment in R&D by major
steel players. Imported technology is available, but there is a
need to develop domestic technologies that are compatible with
domestic raw material.
Enhancing R&D and innovation in the steel sector will not only
reduce capital costs but also reduce the dependency on
imported raw material, which will enhance the competitive
position of the Indian steel industry.

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Source: EY Report on Indian Steel Industry
2017
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Legal

The steel industry is coming under increasing scrutiny from

environmental regulators to limit its carbon footprint and reduce
emissions.
Government is introducing various rules and regulations for this
particular industry.

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Source: EY Report on Indian Steel Industry
2017
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Environmental

Steel companies have recognized the need to be more energy

efficient and implement means to control emissions.
The increasing scarcity of natural resources has led to
introduction of regulations for the use, management and
protection of resources. It is, therefore, imperative for
steelmakers to align their business growth agenda with a
sustainability agenda.

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Source: EY Report on Indian Steel Industry
2017