The PESTEL analysis is an examination of the political, economic, socio-cultural demographics, technological, environmental, and legal trends and events. By carefully examining each environment, executives are able to identify major opportunities and threats. Further, examining each environment helps gain an understanding of the key factors in a broader sense. This exercise allows a firm to adjust their strategies as needed.
Sociocultural and demographic trends
The socio-cultural demographic environment incorporates social trends, demographic characteristics, and culture. This environment is constantly changing due to the variety of variables it includes.
When looking strictly at demographics, it is important to notate that millennials are projected to outnumber baby boomers by the year 2019 **. With this in mind, it is crucial to focus production of the fabric towards the younger generation versus the older. The millennials (born between 1981 and 1996) should be the primary focus of the marketing strategy for Strictly Solar as they will slowly become the primary consumers in the US.
When looking at current social and lifestyle trends, there are a number of factors to consider.
First, consumers would rather an experience than a good**. People are becoming more adventurous and wanting to get out of their comfort zone. This is a huge factor to consider when brainstorming product ideas as it is key to develop a product that will assist in this daring new life the world is seeking to live. Secondly, there is a continued focus on a healthy lifestyle. Today, people are more active than in the past and are getting out and doing more.
In fact, reports show that the rate or regular exercise among Americans is at its highest in 9 years (Cohen, 2017). Further, the most active communities were those that had access to a surplus of nature and walkability (Cohen, 2017). The potential consumers living in places like Colorado and California are more likely to take an early morning hike or go camp out on the weekend.
Producing a product with the solar fabric such as a tent would be a huge success with the millennial age group. By looking at the MRI+, one can see that over 4 million tents were bought in the last 12 months and the largest group of consumers were aged 25-34 followed by those aged 35-44.
Solar powered products will continue to grow in success. Americans today are focused on finding alternative energy options and statistics show that 9 out of 10 Americans support the idea of solar power (Polling Data). While the product options suggest do not eliminate other forms of energy options, they provide a way for people to see just how many options there truly are in utilizing alternative energy sources.
Technological trends and improvements
Technological advances are made every day. In the past 30 years alone, the United States has seen significant changes in technology. For example, in 1984 only 8% of households had a personal computer, the World Wide Web had yet to exist, and cell phones were equivalent to the sizes of bricks. According to Moore’s law “the performance of microcircuit technology roughly doubles every two years” and this statement has proven itself to be true time and time again.
The advancement is solar energy has continued to grow astronomically, as has the overall efficiency. For example, “when Bell Labs first developed the silicon solar panel in 1954, the efficiency level was a mere 6 percent. By the 1970s, the efficiency had been raised to 14 percent. Today, most solar panels have an efficiency level of between 14 and 23 percent, depending on the model” (Recent Advancements in Solar Energy, 2018). The use of solar power is continuing to grow due to the continued efficiency it has proven to have.