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Legal factors in marketing plan

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451 views4 pages

Document (3) Legal Factors

Legal factors in marketing plan

Uploaded by

Claire Montaño Lincuna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PEST ANALYSIS
PESTLE Analysis: Legal Factors Affecting Business
legal-factors-affecting-business

If you want to analyze the situation in which a business finds itself, environmental analysis is a
great place to start. This combines a number of different techniques — PESTLE analysis being
one of them — to identify and evaluate the various external factors that affect a business.

Now, there’s nothing inherently difficult about conducting PESTLE analysis (or using any other
such frameworks), but it can sometimes be a tad troublesome when deciding what constitutes each
of the 6 categories (for reference, these are: Political, Economic, Social, Technological, Legal, and
Environmental).

That’s why we’re writing this series of articles about each one of the categories, including their
definitions, importance, and plenty of examples. In case you haven’t already, be sure to read up on
Political Factors, Economic Factors, Social Factors, Technological Factors, and Environmental
Factors before continuing on.

In this edition, we’ll be covering the last of the six categories — Legal Factors!

What Are Legal Factors?


Legal factors are external factors which refer to how the law affects the way businesses operate
and customers behave.

Product transportation, profit margins, and viability of certain markets are all examples of things
which may be influenced by legal factors.
How Do Legal Factors Affect Business?
Legal factors can decide whether or not there is a business behind selling a certain product
(perhaps drugs, or sharp objects), and can also affect the mechanisms through which a company
stocks their inventory or interacts with the customer.

Examples
General examples of Legal Factors affecting business include:
Consumer law
Discrimination law
Copyright law
Health and Safety law
Employment law
Fraud law
Pyramid scheme legality
Import/Export law
Let’s look at how a couple of these might affect businesses in more depth:

Consumer law — consumer law (alternatively known as consumer protection) is designed to


protect consumers from fraudulent companies or practices, and preserve their rights in the
marketplace. “How does this affect businesses though?”, you might ask. For example, consumer
law results in large companies having to dedicate a fair amount of their resources into putting out
detailed information about their products and policies. On the other hand, consumer law in itself
makes a business for some private watchdog companies.

Employment law — employment law, also known as labo(u)r law, dictates how companies’
employees should be treated. Minimum wage laws can limit the various different employment
possibilities a company can offer, child labour laws can affect the way tight-knit home businesses
in third world countries operate, and dismissal laws can make firing employees (for whatever
reason, perhaps unproductivity) that bit harder.

Legal Factors Affecting Tesco


Laws have been introduced to prevent companies from Tesco from changing product prices
without informing customers
Recently, there has been a crackdown on misinformation in product discounting (e.g. perpetual
‘discounting’)
Read the full PESTLE analysis of Tesco here.

Legal Factors Affecting Anthropologie


Anthropologie’s parent entity Urban Outfitters has already been penalized for attempting to make
employees work for free, so repeating this might result in a run-in with the law (and for example,
fines).
They have also allegedly stolen designs from merchants on Etsy. This means that they have to be
very careful with where they take future designs from.
You can find the complete PESTLE analysis of Anthropologie here on our site.

Conclusion
That’s all there is to legal factors in PESTLE analysis! They are simply the factors that affect
businesses as a consequence of, or in direct relation to, governmental laws. They play a big part in
deciding how businesses operate and what profits they receive, as well as how customers behave.
Examples include the legality of pyramid schemes, and laws governing importation and
exportation. Finally, they can be seen affecting business of all scales, like Tesco and
Anthropologie.

Image: Billion Photos/Shutterstock.com

NEXTExternal Factors that Affect a Business »


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