CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: External Environment
A packaged-snacks company in Indore notices that rising health awareness among urban Indians is shifting demand from fried snacks to baked and millet-based products. Which component of the PESTLE analysis does this observation primarily belong to?
The observation belongs to Social factors in PESTLE. Shifts in health awareness, lifestyle and consumer tastes are socio-cultural trends that change what customers buy, whereas economic, political and legal factors deal with income levels, government policy and regulation respectively.
- APolitical factors
- BEconomic factors
- CSocial factorsCorrect
- DLegal factors
Explanation
Changes in lifestyle, health awareness and consumer tastes are demographic and cultural trends, which form the Social component of PESTLE. Economic factors concern income, inflation and interest rates, while political and legal factors concern government action and regulation, none of which is described here.
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