PESTLE Analysis for Piracy in Business: Marketing Theories Study Help

PESTLE Analysis for Piracy in Business: Marketing Theories Study Help

To state in a simple and lucid way, an organization has goals to achieve, and strategies are plans to meet the goal. According to Alfred Chandler, an enterprise determines its long term objectives, and allocates their resources based on the strategies envisaged, to reach the objectives. Strategy can be a combination of newer frontiers in marketing, technology, and sourcing. Like any form of art music is dynamic and since the time of inception of civilization music has evolved constantly by imbibing several cultural, social, technological variations. Talking about modern music, with the increasing use of advanced technology, listeners and music lovers are exposed to various forms of music, in different mediums and platforms, like downloaded music, MP3 players, music videos, 1000 song storage capacity in mobiles etc. One can create music medleys, small clips of favorite songs, etc. With the onset of globalized advancement in technology, music is not only a form of art or entertainment, but entertainment industry itself is a concoction of technology and art. This has changed the landscape of entertainment as well as music industry. The world of music is facing a piracy threat every other day, with lowering sales volume for CDS and DVDS, everywhere, as number of downloaded music is increasing day by day. In the globalized environment, faced with rapid technological socio cultural and economical changes, retaining customers and offering quality products and services, at an affordable price, while delivering value and generating customer delight, is a mammoth task.To be in a competitively advantageous position, a company should mark its point of difference so high that it is either too costly to copy and/or inimitable.

PESTEL ANALYSIS

A business is connected with the society and environment in which it operates, and clearly various environmental factors and forces have roles to play in structuring and shaping business decisions. The business environment can be divided into two sections, macro environment and micro environment. Macro environment factors include political changes, economic environment, socio-cultural aspect, technological advancement, environmental effect, legal issues. All together they form the PESTEL aspect of business.

Political Turbulence: The political aspect is important in a sense, what government is trying to promote to the society, the nature of the government towards business development, public welfare, law and order supporting growth of business and industries, employment scenario in various industry, etc. In case of this present study we can see that government was very aggressive to stop piracy in music industry in order to save music. This honest approach gives the idealistic businessman an enthusiasm to carry forward business in a legal way.

Economic Scenario: Economic factors are economic growth of a population, employment scenario, GDP, per capita income, real income, interest rates, taxation policies, inflation rate, purchasing power of an economy etc. Inflation causes higher demand for salary and raises price, where higher GDP boosts strong economic growth. US had a strong economic backdrop, but the problem with music downloading and storing is more of social and nothing to do with economical situation.

[Learn more on economic growth and US economic backdrop from economics experts…]

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Socio-Cultural Aspect: A society has certain values, norms, culture, tradition, beliefs. Demand for a product or a service is often backed by the different socio cultural tastes and preferences. A firm’s product portfolio should be changed according to the trends in social and cultural environment. The love for music and the practice of online music download generated the idea of iPOD. According to Steve Jobs, music is loved by everybody, and there is nothing like doing something with love. Clearly the love for music changed Apple’s fortune, and the society fell in love with apple’s enigmatic idea, and superb products.

Technological factors: Perhaps among all the forces discussed, Technology is the strongest which is believed to shape the human nation. The other term of technology is being creative destructor, forcing to go for constant changes in business area and in lives of people. Technology is the key driving force for Apple’s innovation. The simplicity in technology creates the arrogance of Apple, making it the most loved brand. Constant innovation and technologically advanced product delivery made Apple where it is today.

Environmental factors: these are climate and weather factors which generally affects industries like fishing, farming, tourism etc. Also the technological advancement has brought ecological imbalance to a great extent, and the cry today is to protect the environment by promoting eco-friendly products, recyclable energy source promotion etc.

Legal Issues: It can be called a part of the political environment in a society. The environment in which a business operates is composed of rules, regulations, laws and legislations. Some laws are to prevent companies from illegal and unfair practices, some contribute to the protection of consumers, grievance handling of consumers, protecting environment, protecting health and safety issues of workforce employed etc.  In this case study we can see that when Real Network tried to allow anti-piracy software, making it compatible with Apple’s DRM program, apple sued the company under Federal digital Millennium Copyright act, a law intended to protect hacking of computer systems.

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