CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: External Environment
Sundaram Ltd, an Indian health-drinks firm, studies the market and concludes: (i) a stable industry with a few big players, (ii) customers are increasingly health-conscious and prefer low-sugar products, (iii) an exchange rate shift raises the cost of imported ingredients, (iv) a new app lets rivals sell directly to consumers. Which of the following correctly classifies these four findings in PESTEL order (i) to (iv)?
The correct classification is industry structure (not a PESTEL factor), Social, Economic, Technological. Industry concentration belongs to competitive analysis, health preferences are a social trend, exchange rate effects on imported ingredient costs are economic, and the direct-selling app is a technological development.
- AIndustry structure (not a PESTEL factor), Social, Economic, TechnologicalCorrect
- BPolitical, Social, Economic, Legal
- CIndustry structure (not a PESTEL factor), Social, Ecological, Technological
- DEconomic, Social, Political, Technological
Explanation
Finding (i) describes industry concentration, which belongs to industry or competitive analysis rather than the macro PESTEL factors. Finding (ii) is a social trend, (iii) is an economic factor because of exchange rates, and (iv) is technological. The other options misclassify at least one item, for example calling exchange rates ecological or political.
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