Google PESTEL/PESTLE Analysis & Recommendations

Google’s homepage accessed through an iPad. The PESTEL/PESTLE analysis framework

shows that Google must focus on the economic and technological external factors in the
remote or macro-environment. The PESTEL/PESTLE analysis model’s other external factors
(political, sociocultural, ecological and legal) also influence Google. (Photo: Public Domain)

This PESTEL/PESTLE analysis of Google LLC provides insights on external factors in the
company’s remote or macro-environment. In the PESTEL (or PESTLE) analysis framework,
these external factors are opportunities or threats, which in this case influence business
operations and success in the online advertising and information and communications
technology and services industries. Google’s generic strategy, competitive advantages, and
intensive growth strategies are partly a response to these external factors and how they
shape the company’s external business environment. This application of the
PESTEL/PESTLE analysis framework on Google’s business environment yields information
on the opportunities and threats that affect strategy formulation. As one of the world’s most
valuable companies, the information technology and services business must address the
biggest threats in its remote/macro-environment, and continue enhancing its competitive
advantages. In addressing the issues raised in this PESTEL/PESTLE analysis, firms like
Google can expect stronger performance despite challenges in their external industry
environment.

The technological nature of Google’s operations points to strategic focus on the technological
or technology-related external factors identified in this PESTEL/PESTLE analysis. The online
advertising, software and hardware, online services, and on-demand digital content
distribution markets are all related in the company’s operations through their use of computing
technologies. Overcoming the threats and utilizing the opportunities shown in this
PESTEL/PESTLE analysis contribute to fulfilling Google LLC’s corporate mission and vision
statements, which direct the business to maintain a strong leadership position in all of its
markets and industries.

Political Factors
Governmental activities and policies affect Google’s strategies, revenues, profits, and
competitive position. This part of the PESTEL/PESTLE analysis model assesses
governmental influence on the information technology and services business. In considering
Google’s remote or macro-environment and relative business performance compared to firms
like Apple, Amazon, Microsoft, and Facebook, the following political external factors should be
considered:

1. Wider free trade agreements (opportunity)

2. Stable political climates in most of the major markets (opportunity)
3. State-sponsored online companies (threat)

Current international relations maintain wider free trade agreements, which present
opportunities for Google LLC. For example, these agreements facilitate exports of the
company’s products, such as Pixel smartphones. Thus, free trade agreements are political
external factors that benefit Google. Also in this PESTEL/PESTLE analysis, stable political
conditions pave the way for the company’s further growth in technology markets worldwide.
Such stability is an external factor that makes the remote or macro-environment conducive to
the growth of companies like Google. In contrast, state-sponsored or state-owned online
companies in some countries are a political external factor that poses a competitive threat in
the industry environment. The combination of these political factors in this part of the
PESTEL/PESTLE analysis indicates that Google could focus on growing its online and non-
online operations based on free trade agreements and markets’ political stability.

Economic Factors
Google’s business is subject to economic trends, which in the PESTEL/PESTLE analysis
model are external factors that affect business revenues, profits, and growth, based on
market growth and stability. For example, economic trends dictate customers’ willingness to
 pay for information technology services. In Google’s case, the following economic external
factors influence the remote or macro-environment:

1. Economic stability of major markets (opportunity)

2. Rapid growth of developing countries (opportunity)
3. Gradually decreasing cost of renewable energy (opportunity)

This part of the PESTEL/PESTLE analysis presents opportunities for Google’s business
growth through economic opportunity based on major markets’ stability. The rapid growth of
developing countries is also an economic external factor that equates to significant business
growth opportunities for Google. For example, the company could expand its distribution of
mobile computing devices. In addition, the decreasing cost of renewable energy is an
opportunity to strengthen Google’s energy supply. The digital advertising services company
could expand its renewable energy programs to enhance operational stability. This move
would support Google LLC’s corporate social responsibility strategy. These economic factors
facilitate the technology company’s growth. With the right strategies, business growth and
expansion are expectable through the external factors identified in this part of the
PESTEL/PESTLE analysis of Google.

Social/Sociocultural Factors
Social or sociocultural factors affect Google’s remote or macro-environment through people’s
behaviors. For example, these external factors influence customers’ perception of and
behavior toward the company’s online advertising operations. In this part of the
PESTEL/PESTLE analysis, the following social external factors are considerations in
Google’s business:

1. Increasing use of social media (threat and opportunity)

2. Rising diversity of online users (opportunity)
3. Rising criticism against online companies’ use of personal data (threat)

The increasing use of social media is a threat because of the presence of firms like
Facebook. These firms compete against Google’s business, especially in online digital
advertising. The same external factor is considered an opportunity in this part of the
PESTEL/PESTLE analysis because of growth in social media operations. For example, riding
this sociocultural trend, Google could innovate its YouTube operations to further grow its
customer base. In addition, the rising diversity of online users creates opportunities to
improve the business through technological tools and innovation. Google could improve its
algorithms to match the diversity of customers and their preferences. In contrast, rising
criticism against companies’ use of personal information is a social external factor that adds
hostility in the remote or macro-environment, especially against online firms that use personal
information and related data for digital advertisements. Overall, this part of the
PESTEL/PESTLE analysis of Google LLC shows that, despite sociocultural threats, there are
opportunities to boost the corporation’s performance. The business needs strategies that
holistically address the identified external factors. Google LLC’s marketing mix or 4Ps help
entice more customers, based on these existing social/sociocultural trends.

Technological Factors
The technological nature of Google’s business means that technological external factors
significantly impact the firm and its remote or macro-environment. The PESTEL/PESTLE
analysis model considers technological trends as makers or breakers of technology
businesses. The following are the technological factors in Google’s industry environment:

1. Growing Internet access in developing countries (opportunity)

2. Rapid adoption of mobile devices in the global market (opportunity)
3. Growing use of cloud services worldwide (opportunity)

Google has the opportunity to grow based on increasing Internet access in developing
countries. This technological external factor in the PESTEL/PESTLE analysis translates to
 market growth in these countries, where the company could offer more of its hardware,
software, and online services. Also, the continuing worldwide adoption of mobile devices
gives the corporation the opportunity to grow through higher sales of its smartphones and
wider use of the Google Play Store via devices with the Android operating system. The
company could improve the mobile-friendliness of its products to ensure wider adoption
among mobile users. Furthermore, the growing use of cloud services is a technological factor
that gives Google the opportunity to improve its revenues in this market. For example, the
company could implement more aggressive marketing strategies to grow its cloud computing
services. The external factors in this part of the PESTEL/PESTLE analysis of Google show
that there are various business growth opportunities based on technological trends
influencing the company’s remote or macro-environment.

A smartphone. This PESTEL/PESTLE analysis of Google reveals that the rapid adoption of
mobile devices is a technological trend relevant to the company’s industry environment.
(Photo: Public Domain)

Ecological/Environmental Factors
While Google LLC generates most of its revenues online, the firm is subject to ecological or
environmental external factors. In the PESTEL/PESTLE analysis model, these external trends
influence business strategic direction, such as among companies in the cloud computing
services industry. The following ecological external factors affect Google’s remote or macro
environment:

1. Continually growing support for environmentalism (opportunity)

2. Growing interest in sustainable business among suppliers (opportunity)

Strengthening environmentalism is an external factor that affects the industry environment of

companies like Google. For example, environmentalism makes green technology products
more attractive. In this PESTEL/PESTLE analysis case, Google’s use of renewable energy
makes its services satisfactory with regard to customers’ preference for green technologies.
Similarly, the technology giant’s suppliers are increasingly taking interest in sustainable
business practices. This ecological trend creates the opportunity to further strengthen
Google’s corporate image by doing business with suppliers with sustainable operations. This
part of the PESTEL/PESTLE analysis emphasizes ecological external factors that create
opportunities to improve the technology company’s business through ecologically sound
strategies. Google’s corporate social responsibility strategy helps ensure that these
opportunities are addressed.

Legal Factors
Google operates within limits imposed through laws or regulations. In the PESTEL/PESTLE
analysis model, regulatory requirements influence what firms can do, such as the extent of
companies’ use of online users’ personally identifiable information. The following are the legal
external factors that shape Google’s remote or macro environment:

1. Increasing regulations on online privacy (opportunity)

2. Stronger regulations on intellectual property rights (opportunity)
3. Growing restrictions on the use of customers’ personal information (threat and
opportunity)

Increasing regulations for online privacy is an external factor that gives the opportunity to
improve products and increase customer satisfaction. In the PESTEL/PESTLE framework,
addressing this trend could make Google’s products more competitive against companies
with weaker privacy protections. In relation, stronger regulations on intellectual property rights
are a legal factor that presents another opportunity for the company to improve its
technological goods and services. For example, in relation to the operations of Alphabet Inc.’s
other subsidiaries, Google could strengthen its intellectual property filings while providing
tools for individuals and organizations to ensure the protection of their respective intellectual
properties. On the other hand, growing regulatory restrictions on the use of customers’
personal information is a threat, considering the company’s dependence on using customers’
individual and aggregate data to support services like online digital advertising. Nonetheless,
in this PESTEL/PESTLE analysis, such an external factor creates an opportunity for Google
to build on its existing systems and processes to enhance its consensual use of online users’
information. Such enhancement could make the company’s image more satisfactory among
target customers in the online environment. These legal external factors relate to the
competitive factors identified in the Porter’s Five Forces analysis of Google LLC.

Recommendations based on the PESTEL/PESTLE Analysis of Google

LLC
This PESTEL/PESTLE analysis identifies various trends and external factors that present
opportunities for growth and higher business performance for companies like Google.
However, some of these external factors threaten the technology business and its remote or
macro-environment. Considering the diversity of its operations, Google has the resources,
systems, and business capabilities to exploit these opportunities and reduce exposure to the
threats. For example, the company could improve the performance of its Pixel devices to
capture a bigger market share of mobile users. Also, this PESTEL/PESTLE analysis indicates
that Google could develop new operations or acquire existing smaller firms, to address
technological trends influencing product design and development, and ecological trends
pertaining to sustainability. The approach should improve organizational capabilities through
rapid innovation to match trends in the market for information technology and online services.
Strategies maximizing the strengths identified in the SWOT analysis of Google LLC could
optimize business performance amid the opportunities and threats discussed in this
PESTEL/PESTLE analysis.