PESTLE analysis for the LUKoil company Essay Example | Topics and Well Written Essays - 1750 words

PESTLE analysis for the LUKoil company - Essay Example Theoretical view of LUKOIL In monitoring of the company’s macro-environmental or external marketing factors, the analysis would help in shedding light on some of the factors that have an impact on Lukoil Company. As a major market player, Lukoil Company operates through four operating segments. These are the exploration and production part, the process of refining, Marketing and Distribution, chemicals segment, and power generation segment (United Nations Conference on Trade and Development 2003, p. 23). This comes through exploration of natural resources in order to produce crude oil and natural gas. The expansion of this company extends its interests in operational zones by holding properties in Russia, Azerbaijan, Kazakhstan, Uzbekistan, South America, South East Asia, the Middle East, and North and western Africa (Kotok & Sciarretta 2010, p. 78). The success of Lukoil depends on its versatility to navigate the political, economic, social, technological, environmental, and legal factors surrounding its operations, since it is an international corporation cutting across the business world. PESTEL ANALYSIS Political and Economical factors The political factors stem from the extend of the government’s policies in intervening the economy by either through political stability or instability, foreign trade, tax policy, labour laws, in addition, trade restriction. Since Lukoil is an international corporation, its operation, and success cut through many political realms and may certainly influence how the company does business (International Business Publications, USA 2011, p. 23). It is therefore the mandate of the Lukoil Company to respond to the current and potential legislations in order to adjust their market policy accordingly. The profitability of Lukoil Company largely relies on its economic factors (Plunkett 2008, p. 120). There are macro-economical factors like economic growth, interest rates, inflation, and disposal income of consumers, exch ange rates, and businesses. The oil product profits and losses that this company derives from diverse contexts of its markets come with the way the management of demand goes on in the respective economies of operation. This varies, as different countries especially in the East, cannot compare their economy with countries of the West like USA. How well Lukoil adjusts itself to the governments’ mechanism such as interest rate control, taxation policy and government expenditure determines their gain or loss in the economies of investments. Social and Technological factors There are also social cultural factors in the regions with the highest Lukoil investment, which influence a lot on its operations. Many regions have different beliefs, and shared attitudes within their population. Compare the social factors of Eastern Europe and those of East and South Asia and this would culminate in the way the consumption of products do range of different contexts (Marinova & Marinov 2003, p . 104). The large influence of this will depend on the region’s population growth, health consciousness, age distribution, and career aptitude. The marketers of Lukoil have no choice other than understand their global customers and their preferences. The way Lukoil markets its products have to