PESTLE Analisys - Essay Example

There is minimal political interference since the company deals with entertainment products. Though, the government once ordered the CDs produced by HMV to be investigated. This is simply because the company was making too much profit that led to a rise in suspicions of the eligibility of the CDs. Economically, several factors pose a great effect on the company. The crash on the company finances due to the acquisition of Waterston’s agency had a severe impact. The company’s shares performed poorly in the London stock exchange.

The great impact made the company to have a partial closure. The unstable currency in the past recession years had a great impact on the company’s economy. This is because currency exchange from the signed deals produced futile results. Another factor that greatly affects the economy of HMV is the decline in the company’s performance in 2009.This affected the market as many customers felt that the company did not offer the best. The overall decline in the entertainment industry by 3.4% in 2008 had diverse effects on the company too.

Firms in other countries working under the brand name of HMV contribute revenue to the company empowering it economically. The sales revenue of the company rose by 3.1% in 2010. This increased popularity of the brand and the cash inflow. On the sect of social factors, change in consumer demands or else lifestyle changes affects the company. This is whereby the customers drift their demand from one product completely to the other. If there were large stocks of the product, the company may experience a loss.

It is mostly brought about by celebrities and other influential people. Advertising these items on a more apparent note helps to adhere to the lifestyle changes by reducing stock. The tapping of music and entertainment is another social factor. Most people can easily burn personal CDs posing a great challenge on the markets of HMV. They can also transfer music from one device to the other without necessarily purchasing it. On the technology trends, several factors are considered. These include; Online business.

Most of the music and computer games can be sold online. This is in line with business protection. The use of DVD s may not be applicable anymore since the sale of music can be easily done through the internet. The company can direct its focus on dealing with such issues to keep up with the pace of the fast developing technology.HMV has created a website whereby it sells its products through an online market. Another one is filming technology. There is the use of high filming technology that provides a live coverage of events.

It can be used to record live performances of celebrities. The performances can be sold online for example through YouTube. This easily copes the growing technology. The company also utilizes the social media sites, for example face book. These sites can be used as advertisement centres. This is because they can be accessed by a large number of people. The various products offered by the company are displayed to the customers giving updates on the trending issues (Adams, J. L, 2002, 44). There are ecological factors that can be depicted.

The shift from plastic DVDs to using the internet in order to protect the environment is a considerate factor. The plastic CDs that are not re-used but instead disposed off, can affect the environment since they are non-biodegradable. The cost of purchasing CDs is higher than that of selling music