PESTEL Analysis of Cummins ESB Business - Essay Example

Notable areas that Cummins ESB is likely to face political and legislative interferences include but not limited to taxation policies, labour laws, trade restrictions, Environmental regulation and investments especially public private partnership ventures. In other words Cummins ESB will have to comply with different legislations relating to taxation, labour, or investment in every country of their operation. Economic Factors Economic factors are inherent concern to Cummins ESB taking into consideration that the factors are likely to influence their profits, investments, costs, prices and demand to greater extent.

Notable economic factors that are likely to affect operations Cummins ESB include but not limited to inflation, interest rates, unemployment rates, and or currency exchange rates. The fact that Cummins ESB engage in massive investments across the globe and the same time engage in repatriation of earnings to the parent company (Cummins Inc.), the company’s investments costs as well as revenues are likely to be affected by fluctuating currency rates. The currency rates are also likely to affect the cost of exported as well as imported products and services.

Inconsistent interest rates in different countries are also likely to affect the cost of company’s investment abroad. Inflationary trends globally and in specific international market is also detrimental on Cummins ESB earning. Social factors Most markets in the international market are always distinguished from their cultural aspects most of which are inherent while others are acquired. Social trends such as Demographic change; fashion and preference, age distribution, levels of literacy, customs and traditions, attitudes and beliefs are likely to affect the operation of a multinational company to significantly.

It is unlikely that Cummins ESB operations will be affected by social trends in the global market considerably. However, demographic change in country or region is likely to increase demand for energy either for lighting, cooking and or heating. Additionally the population is growing more conscious about the form of energy they use as most environmental conservation agencies continue to drug for green energy. Technological factors It is noteworthy that technology is one of the major external variables that has played significant role in developing competitive products and services by Cummins ESB.

The technology has not only benefited the company but also Cummins ESB customers as it enhance to effective and efficient delivery of services (Cummins Power Generation Inc, 2010). For instance, introduction of Electronic Funds Transfer Systems (EFTPoS) and Electronic Point of Sale (EPoS) has highly enhanced delivery of services and products. Through effective technology Cummins ESB has managed to design and build energy efficient diesel, LP gas or natural gas generators, digital controls and transfer switches for standby around the globe.

All technologic breakthrough of Cummins ESB is attributable to the high investment in Research and development. Environmental factors It is always in the best interest of the common public that a company operate lean projects that are not harmful to the environment. This means that companies have responsibility to remain environmental savvy when producing or marketing