The organization may also study the industry specific taxation policies to understand the host government's priorities and interest in developing industries. can enter in low taxation markets and benefit from high profits that can be invested in research and development activities. High taxation affects international trade and prevents exports. decides to enter in markets with the corrupt economic, political system, it will threaten the organization's sustainable development by destabilizing the society, harming justice system and endangering the rule of law.Ģ.1.2.5 Taxation, trade restrictions and intellectual property protectionĮntering in countries with high taxation level will directly influence the profitability of American Eagle Outfitters. The corruption can influence various business operations, ranging from licensing, contracting, fraudulent deals to frequent lawsuits. due to jeopardized public trust on business organizations and overall political and economic structure. Operating in countries with high corruption level and weak law enforcement makes the business environment increasingly unpredictable for American Eagle Outfitters. Moreover, a well-developed governance system with a democratic political environment makes the business environment more comfortable for international business organizations like American Eagle Outfitters.īureaucracy and corruption negatively influence the business environment. Close collaboration with such groups may enhance the American Eagle Outfitters.’s ability to collaborate with community and achieve long-term corporate goals. should carefully analyze the protests by pressure groups, social/environment activists and worker unions as such protests play an important role in the policy making process. to study the current trends in the country's political scenario as changes in government may alter the government's priorities towards the development of different industries.Ģ.1.2.3 Protests/pressure groups and governance systemĪmerican Eagle Outfitters. It is important for American Eagle Outfitters. Growing tensions and instabilities in the global political environment can affect the Gold industry growth and limit the growth opportunities available to American Eagle Outfitters.įrequent changes in government policies harm business performance by increasing environmental uncertainty. is present in different countries, each having own political tensions. However, when there is political chaos, it deters the investors and harms the stakeholders' trust in economic and consequent organizational performance. High political stability provides a stable and friendly business environment with predictable market growth trends. needs to consider the following political factors during the strategic planning process:Ģ.1.2 Political factors that influence American Eagle Outfitters. The political environment of a country comprises multifaceted factors. In a political context, the key to success in a dynamic international business environment is to diversify the systematic risks. The presence at international stage increases the company’s sensitivity to changes in political environments of different countries. Within PESTEL analysis, political factors exert a strong influence on the long-term sustainability and profitability of American Eagle Outfitters. looks to expand and leverage its competencies and core capabilities, conducting the PESTEL analysis is imperative for developing effective strategies and achieving long-term growth objectives.Ģ.1 Political factors 2.1.1 Importance of political factors in the PESTEL framework identify the major external environmental forces that shape the strategy and competitive landscape and support its strategic decision making process. The application of PESTEL analysis can help American Eagle Outfitters. 2 Application of PESTEL to American Eagle Outfitters.
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