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Socio-cultural factors

Watch this video and read this article where we explore socio-cultural factors in a PESTEL analysis.
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The S factor for socio-cultural in the PESTLE analysis is about people’s lifestyle, gender, as well as age distribution within the market that the business operates in. For example, millennials are a very interesting demographic within any market. They prefer to rent everything rather than to buy. This has totally disrupted the business model of many organisations and this is how companies like Uber and Airbnb have come to be successful. In order for a business to be successful, you will need to understand the choices and preferences and habits of these demographics.

Socio-cultural factors include consumers’ lifestyles, buying habits, education, religion, beliefs, values, demographics, social classes, sexuality and attitudes. These factors determine the suitability of an organisation’s products and services for its customers’ needs.

Generation Z and millennials

A great deal of change is currently driven by the hyperconnectedness of Generation Z (people born after 1996) and millennials (those born between 1977 and 1995) and their appetite for social media, digital products and frictionless, internet-enabled transactions.

Traditionalists, baby boomers and Generation X

The effect of these age groups on strategy development in education, fashion, hospitality, retail, computer hardware and software, cannot be overstated. However, traditionalists (born in 1945 and before), baby boomers (born between 1946 and 1964) and Generation X (born between 1965 and 1976) make very different purchase decisions to satisfy long-established consumption criteria, and they cannot be ignored as a result of their strong purchasing power.

The Muslim Pound, Green Pound and Pink Money

In business and management research, several studies have investigated the ‘Muslim Pound’, ‘Green Pound’ and ‘Pink Money’ to understand the buying habits of the Muslim, pro-environment and LGBT+ communities. The insights from these studies are fascinating and could transform organisations’ fortunes.

To develop specific insights for your firm, the key questions are:

  • How do our customers’ beliefs and values influence their buying habits?
  • How do cultural trends and human behaviour inform our business proposition and model?
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Managing Company Culture Whilst Responding to Environmental Challenges

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