PESTLE Analysis of Australia | Business Management & Marketing (2023)

Introduction

Table of Contents

Pestle analysis of Australia. Australia (Commonwealth of Australia) is a country that consists of the Australian continent, Tasmania Island, and many other islands. She is the6thworld’s largest country in terms of size and area (7,692,024square km). Sydney is her largest city and Canberra is her capital.

Brisbane, Adelaide, Melbourne, and Perth are some of the major cities of Australia. Approximately more than25,737,400people are living there. It makes herthe 53rdmost populous country in the world. New Zealand, Vanuatu, the Solomon Islands, East Timor, Indonesia, and Papua New Guinea are some of the neighboring countries of Australia.

Before the invasion of the western colonist in the 17 century, the indigenous people came to the continent and inhabited it 65000 years ago. The western settlement started increasing and the gold rush attracted more settlers. On Jan 01, 1901, all the 6 colonies united and established the Commonwealth of Australia.

Today, we’ll discuss the pestle analysis of Australia. Here we’ll focus on the macro-environment factors of the 6th largest country in the world. For internal factors, check out theswot analysis of Australia. Here’s the pestle analysis of Australia as follows;

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Political factors impacting Australia

Political System

Australia follows the federal constitutional monarchy and liberal democracy as a political, government, and administration system. The role of the Prime Minister is the head of the government and the monarch is the head of the state. The Governors and Governor-General work on behalf of the monarch at the state and federal level. She has10territories and6states.

Alliances

Australia has very good relations with theUSA,Canada,China,the UK,Russia, and many other countries of the world. She’s a member of the world’s top platforms and organizations like WTO (World Trade Organization), Pacific Island Forum, ASEAN plus Six Mechanism, Commonwealth of Nations, Asia Pacific Economic Forum, OECD (Organization for Economic Co-operation and Development), United Nations, ANZUS, and G20.

Stable Political Environment

Australia has a stable political environment and it’s one of the main reasons for making her the13thlargest economy in the world. That’s why she attracts the attention of investors from all over the world. The country has a low level of political and government corruption. People think highly of the political and government offices because of the transparency.

Economical factors affecting Australia

Economic Status

Australia is one of the world’s most advanced developed countries mainly because of the economical strengths. According to an estimate, her annual GDP was1.375trillion US dollars in 2020. Out of which, her per capita income was50,844US dollars and it’s10thhighest in the world.

Economic Recession

The pandemic ofcovid-19has increased herunemployment rateup to 7% and decreased the country’s annual revenue. The net income and purchasing power of the ordinary people has dropped. It’s because of the months of the lockdown and shutdown of businesses.

Real Estate Business

Real estate is a very successful business in Australia. People consider real estate a safe investment. They buy the property and then sell it for a profit later without doing anything.

A lot of the country’s capital is stuck in the real estate business. The same capital could generate thousands of employment opportunities if people invest it in other businesses.

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Foreign Offices

Australia is home to the headquarters of many foreign companies and businesses. Many south Asian and pacific countries consider her a low-cost country compared to the US and UK. That’s why they established their international headquarter in Australia.

Taxes

The maximumtax ratein Australia is45%of the upper level. It varies and depends on various factors like income level, residents, foreign residents, businesses, and companies.

Imports & Exports

Some of the majorimportsof Australia are pharmaceutical equipment, furniture, vehicles, plastic, machinery, electrical machinery, precious metals, minerals, medical apparatus, oil, and gas. Some of her majorexportsare copper, iron, wheat, educational services, ore, beef, financial services, gold, gas, and coal.

Social factors impacting Australia

Demographic

Australia provides a high quality of life, the best education system, healthcare, and a stable environment for businesses. The country has a population of more than25.8million people. She has a lower population if you compare it with her area and size. The average life of males and females in Australia is80and84years old. It’s higher if you compare it with other developed countries.

The country is facing the issues of an increasing number of old and retired people, and the younger generation is declining.

Immigration

Australia has provided shelter to immigrants from all over the world. She has started the mass immigration policy after WWII. Such policies have made her a multi-cultural and multi-ethnical society. The country has faced many conflicts of multiculturalism and that’s why immigration is a sensitive top there.

Social Classes

Australia has 3 major classes in her society; upper class, middle class, and lower working class. The ownership, property, and wealth lifestyle belong to the upper and middle classes. The difference between the upper and lower class is the amount of wealth and bank balance. Approximately 20% of the Australian population falls under the category of the working class.

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Higher Education

Australian society wants higher-tech education for their children. The upper and middle class put their children in private schools, colleges, and universities. The lower working class has to go to the government institutes.

Interests & Hobbies

Australian people are adventurous, lively, and hardworking. She’s a sporting nation and her people love watching and playing different sports. She is good at swimming, hockey, and cricket. Her sports industry contributes a lot to her economy.

Technological factors affecting Australia

Tech Investment

Australia has always accepted the latest tech innovation quickly. According to an estimate byWHICH-50, her people have spent approximately roundabout100billion dollars on technology.

Financing the Research

Many Australian universities face the difficulty of financing their research and development. National research centers conduct most of the researches. It’s according to her policy. The government and the industries finance 50% and 40% of the total researches.

Access to Encrypted messages

Australia has recently introduced a new law of giving access to the police department. It’s for the security measures. She claims that the police would catch the hackers and criminal if it has access to the information. It raises a serious on the privacy of users.

Legal factors impacting Australia

Laws

The Australian government has established a different set of laws for the smooth running of businesses and companies. Those laws include consumer laws, competition laws, and trade laws. The Fair Work Act 2009 deals with the employment and employees contract. She has also established privacy laws that how corporations should use the personal information of users.

Environmental factors impacting Australia

Environmental Challenges

Australia falls under the category of the driest continent on earth. According to a report based on the Senate inquiry, it concluded that environmental changes are raising the question of the national security of the country. It would result in the form of the scarcity of natural resources like food and land, infectious diseases, and water insecurity.

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Bushfire

Australia has faced the worst bushfire across the continent in 2019-2020. It burned down approximately 72000 square miles of the total area in different places. Along with destroying 5900 building and 2779 houses, it has also killed many endangered species.

Conclusion

After an in-depth study of the pestle analysis of Australia, we’ve concluded that Australia is indeed the world’s largest economy. The environmental challenges and the increasing unemployment rate are serious threats to the country. The government should find a way to minimize the threat.

FAQs

What is PESTLE analysis in business management? ›

A PESTLE analysis studies the key external factors (Political, Economic, Sociological, Technological, Legal and Environmental) that influence an organisation. It can be used in a range of different scenarios, and can guide people professionals and senior managers in strategic decision-making.

What is the PESTEL analysis in marketing? ›

What is PESTLE? A PESTLE analysis is a tool used to gain a macro picture of an industry environment. PESTLE stands for Political, Economic, Social, Technological, Legal and Environmental factors. It allows a company to form an impression of the factors that might impact a new business or industry.

WHAT IS A PEST analysis Australia? ›

A PEST analysis is a process for identifying the political, economic, social and technological factors that affect supply chains - both locally and globally.

How is PESTLE analysis affect the business industry? ›

A PESTLE analysis gives employers a framework for examining certain factors out in the broader world – conditions over which they exert no control – and how they impact their business so that they can better prepare.

How do you write a good PESTLE analysis? ›

Here's how to write a PESTLE analysis:
  1. Start political.
  2. Move on to economic factors.
  3. Examine social influences.
  4. Look at technological factors.
  5. Understand the impacts of the legal system.
  6. Study how environmental changes affect you.

What is PEST analysis and how does it benefit the business? ›

Definition: PEST Analysis is a measurement tool which is used to assess markets for a particular product or a business at a given time frame. PEST stands for Political, Economic, Social, and Technological factors. Once these factors are analysed organisations can take better business decisions.

Is PESTEL a marketing theory? ›

A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organisation. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis.

What are the 6 PESTEL factors? ›

In particular, PESTEL reflects the names of the six segments of the general environment: (1) political, (2) economic, (3) social, (4) technological, (5) environmental, and (6) legal.

What drives Australia's economy? ›

Economy of Australia
Statistics
GDP by sectorServices: 62.7% Construction: 7.4% Mining: 5.8% Manufacturing: 5.8% Agriculture: 2.8% (2017)
Inflation (CPI)1.4% (2020 est.) 3.5% annual/1.3% quarterly (Dec Qtr 2021)
Population below poverty line13.6% (2017)
Gini coefficient34.0 medium (2018)
37 more rows

What environmental issues does Australia have? ›

Issues with no end in sight
  • Agriculture clearing and overgrazing. Because of clearing activities for agricultural land, around 13% of Australia's original vegetation has been removed since European settlement. ...
  • Overfishing and illegal fishing. ...
  • Introduction of exotic species. ...
  • Pollution. ...
  • Infrastructure development.

How is the economy in Australia? ›

Australia is ranked 4th among 39 countries in the Asia–Pacific region, and its overall score is above the regional and world averages. Over the past five years, Australia's economic growth accelerated from 2017 through 2018, decelerated in 2019, turned negative in 2020, and rebounded in 2021.

What are the factors affecting the business environment? ›

Here are the nine types of external environment factors that affect businesses:
  • Technological factors. ...
  • Economic factors. ...
  • Political and legal factors. ...
  • Demographic factors. ...
  • Social factors. ...
  • Competitive factors. ...
  • Global factors. ...
  • Ethical factors.

How will PESTEL analysis help the business manager operate effectively? ›

By expanding the PESTEL analysis framework to include the multi-levelled and three-dimensional aspects of modern business operations, managers will be able to achieve sustainable and more competitive performance and growth within their organisations.

How does PESTLE help your strategic development team? ›

A PESTLE analysis helps a team to understand the organization's market and business position better, plan strategically, and conduct market research in new and existing markets. The framework: Encourages strategic thinking and helps you evaluate how your strategy fits into the broader environment.

How do we use PESTLE analysis in creating a business? ›

The traditional use of PESTLE in change management is as follows:
  1. Step 1 - List external PESTLE factors for the business. ...
  2. Step 2 - Identify the implications of each PESTLE factor on the business. ...
  3. Step 3 - Rate the impact and likelihood. ...
  4. Step 4 - Further action.
20 Oct 2016

What is the difference between SWOT and PESTEL analysis? ›

What's the Difference Between a SWOT or PESTLE Analysis? The main differences between a SWOT or PESTLE analysis are that a SWOT analysis focuses on actions you can take INTERNAL to your business environment, a PESTLE analysis identifies EXTERNAL factors that are mainly outside of your control.

Which is better SWOT or PESTLE? ›

Unlike SWOT, which is tied to analyzing a specific company's internal capabilities, PESTLE is designed examine a company's external environment. Sometimes referred to as “scanning the business environment,” a PESTLE is meant to be a macro or “big picture” look at the market in which your business operates.

What are the components of PESTLE analysis? ›

There are six elements to a PESTLE analysis: Political, Economic, Sociological, Technological, Legal, and Environmental.

How does PESTLE analysis help in recognizing an opportunity? ›

A PESTEL analysis helps managers gain a better understanding of the opportunities and threats they face; consequently, the analysis aids in building a better vision of the future business landscape and how the firm might compete profitably.

What is political factors in business? ›

Political factors include government policies, leadership, and change; foreign trade policies; internal political issues and trends; tax policy; regulation and de-regulation trends.

Which company uses PESTLE? ›

The PESTLE analysis of the companies has been done in this context for multinational companies such as Samsung, Starbucks, and Pfizer. Samsung operates its business in the field of electronic goods and it is one of the leading brands of the world.

What is economic factors in PESTLE analysis? ›

2. Economic factors in PESTLE Analysis. Economic factors include economic growth/decline, interest, exchange, inflation and wage rates, minimum wage, working hours, unemployment (local and national), credit availability, and cost of living.

What is PESTEL analysis PDF? ›

A PESTEL analysis is a framework or tool used to analyse and monitor the external environment factors which have an impact on an organisation. The result of which is used to identify threats and weaknesses, strengths and opportunities which can be considered or used in a SWOT analysis.

WHAT IS A PEST analysis and why is it important PDF? ›

PEST is an acronym for four sources of change: political, economic, social, and technological. PEST analysis is a powerful and widely used tool for understanding strategic risk. It identifies the changes and the effects of the external macro environment on a firm's competitive position.

What are social factors in marketing? ›

Social factors represent another important set of influences on consumer behaviour. Specifically, these are the effects of people and groups influencing one another through culture and subculture, social class, reference groups, and family.

How the factors in the social environment affect business? ›

A business is subject to an external social environment and also its own internal social environment. The external social environment provides both risks and opportunities for a business. Businesses that fail to adapt to social preferences related to their goods and services will fail.

Which PESTEL factor is most important? ›

There is no single most important factor in the PESTEL framework. Depending on the subject to be analyzed, different factors may be supportive or detrimental. There is something that is most important in strategy formulation - knowing your company, knowing your competition, and knowing your customer.

How do PESTEL factors influence organizational performance? ›

A PESTEL analysis helps an organisation identify the external forces that could impact their market and analyse how they could directly impact their business.

Why do we need to consider the PESTEL factors in product and service design? ›

PESTEL analysis helps to identify key factors to acknowledge, understand, and potentially use to your advantage. I have discussed some characteristics of these environmental factors below. The article will help you find which factors are more important to your company's strategy.

What is PESTLE analysis example? ›

PESTLE is an acronym that stands for six external factors affecting your business: political, economic, sociological, technological, legal and environmental. Each of these can have a profound effect on your business and varying implications, for example, in terms of: duration of impact - short term or long term.

What are the 6 elements of PESTLE? ›

In particular, PESTEL reflects the names of the six segments of the general environment: (1) political, (2) economic, (3) social, (4) technological, (5) environmental, and (6) legal.

What is PESTLE and SWOT analysis? ›

PESTLE analysis considers the broad environmental context that affects the business and the changes that occur in this context. SWOT analysis then interprets these findings for the business to determine the strengths and weaknesses, and opportunities and threats.

Why is PESTLE analysis important in operations management? ›

PESTEL Defined

The analysis will give you a feel for the opportunities and threats facing your firm. It should also uncover trends to watch in the future. With this information, you can decide how your firm can be most competitive.

Which company uses PESTLE? ›

The PESTLE analysis of the companies has been done in this context for multinational companies such as Samsung, Starbucks, and Pfizer. Samsung operates its business in the field of electronic goods and it is one of the leading brands of the world.

What are political factors examples? ›

Political factors include government policies, leadership, and change; foreign trade policies; internal political issues and trends; tax policy; regulation and de-regulation trends.

Is PESTEL a marketing theory? ›

A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organisation. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis.

Which PESTEL factor is most important? ›

There is no single most important factor in the PESTEL framework. Depending on the subject to be analyzed, different factors may be supportive or detrimental. There is something that is most important in strategy formulation - knowing your company, knowing your competition, and knowing your customer.

What is PESTLE analysis PDF? ›

Doing a PESTEL analysis helps you to look at all important factors. that might affect the success or failure of your project. PESTEL is an acronym for the following factors (Political, Economic, Social and cultural, Technological, Environment and Legal)

What are the components of a PESTLE analysis? ›

There are six elements to a PESTLE analysis: Political, Economic, Sociological, Technological, Legal, and Environmental.

What are economic factors in PESTLE? ›

Economic factors include inflation rate, interest rates, foreign exchange rates, economic growth patterns etc. It also accounts for the FDI (foreign direct investment) depending on certain specific industries who're undergoing this analysis. Example Index Terms – Ownership Changes, Bankruptcy, Company Relocations.

Why is a SWOT analysis and PESTLE essential to a business firm? ›

SWOT and PESTLE analysis together allow companies to get a combined view of the internal and external resources, threats, and opportunities. Since both frameworks analyze the environment based on different factors, companies can get a holistic view of the possibilities and threats that exist for them.

When should you use a SWOT or PEST analysis? ›

To compare, PEST analysis will only examine external factors that could affect your business (although it will help you think specifically about different areas of interest), while SWOT analysis considers both internal and external factors.

Why PESTEL analysis is important for strategic planning? ›

PESTLE analysis is a strategic planning tool that is used to examine various factors that affect the market environment for a business or organization. The goal of PESTLE analysis is to develop a profound understanding of the external environment where the organization operates.

How will PESTEL analysis help the business manager operate effectively? ›

By expanding the PESTEL analysis framework to include the multi-levelled and three-dimensional aspects of modern business operations, managers will be able to achieve sustainable and more competitive performance and growth within their organisations.

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