Caterpillar Inc Pestel Analysis

Political:

The political forces have acquired a central role in the context of international business. The impact of these forces on international businesses and their growth has grown more highlighted in the recent decade as governments around the world have increased their control and oversight of large businesses operating in their territories.

Economic:

Economic factors have always played a central role in the context of international business. The economic environment of a market region affects the sales and revenue of a company in that market. When the level of economic activity in the global economy is high, international businesses enjoy higher sales and revenue. On the other hand, a global slowdown can hurt large businesses financially.

Sociocultural:

Sociocultural factors are also of special significance in the context of international business. Companies have to consider these factors while creating strategies for individual markets. Businesses operating across the globe in various markets have to consider how social factors affect their business. Social changes can have a significant impact on businesses and firms need to change their strategies accordingly to remain ahead of the curve.

Technological :-

Technology and technological factors have become a major driving force industry-wide in the 21st century. For large businesses, technology has remained the leading driver of change driving almost all the growth and expansion across various sectors. The proliferation of digital technology and social media proved how technology has the potential to change our world. Apart from bringing higher operational efficiency for businesses and expanding their opportunities for growth, technology has also opened new vistas of growth for businesses across all industry sectors including construction and engineering.

Environmental :-

Environment and environmental factors have also acquired a central role in terms of international business. Now, the environment is a core part of the picture especially when the pandemic has led to higher environmental awareness worldwide. Governments worldwide have enacted environmental laws so that companies take care of their environmental impact and minimize it. From the automobile industry to the construction industry and several more industries that use heavy equipment, all of them are required to minimize their environmental impact to remain compliant. Apart from that, an important factor that has pushed large businesses towards adopting sustainability principles is because sustainability also affects their brand image. Customers have also become environmentally conscious and like to buy products from companies that are highly sustainable. As a result, sustainability has become a core part of the picture.

Legal :-

Legal compliance is of very high significance for businesses regardless of the market region in which they are operating. Globally, governments have grown their oversight of large businesses. Not just inside the US, but overseas also, Caterpillar is required to remain compliant with all the applicable laws including labor, product quality, environment, financial, and other laws. Non-compliance in most cases results in hefty fines for the company. Caterpillar is also involved in a bitter legal battle related to tax evasion. The case was discovered years ago and the federal agents raided Caterpillar offices back in 2017. If the case against Caterpillar is proved, the company may need to pay more than $2 billion in unpaid taxes. While the case has remained closed during the Trump government, it might be reopened by the Biden government.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store