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CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: External Environment

A Pune-based electric two-wheeler maker is studying its environment. It lists: (i) a new central subsidy for EV buyers, (ii) a fall in lithium battery prices globally, (iii) a new state rule mandating battery recycling, (iv) adoption of AI-based battery management software. Which option correctly classifies (i) to (iv) in PESTLE order?

The correct order is Political, Economic, Legal, Technological. The subsidy is government policy, falling battery prices are an economic cost factor, the recycling mandate is a binding rule, and AI-based battery management software is a technological advancement.

  1. APolitical, Economic, Legal, TechnologicalCorrect
  2. BEconomic, Political, Legal, Technological
  3. CPolitical, Economic, Technological, Legal
  4. DLegal, Economic, Political, Technological

Explanation

A government subsidy is a policy decision, hence Political. Falling battery prices are a cost and market condition, hence Economic. A mandatory recycling rule is a statutory requirement, hence Legal. AI battery software is Technological. Option 2 swaps Legal and Technological incorrectly.

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