The PESTEL framework consists of various factors that can affect companies and how well they are competing in the marketplace. Some of these factors allow a company to gain a competitive advantage while others may be indicators that there are issues the business needs to resolve. This model encompasses the following factors: Political, Economic, Sociocultural, Technological, Ecological, and Legal. All of these factors deal with external components that could affect a company much like an outside influence.
Whirlpool Corporation is headquartered in Bent Harbor, Michigan and subject to the laws and regulations that the United States government implements. This political influence affects the decisions that the company makes and the behaviors that it has. In the case of Whirlpool, they are one of the largest, leading manufacturer of home appliances in the world. Since their homebase is in the US, the risk of a political factor such as war is low whereas tariffs and taxes could potentially be a high risk factor for Whirlpool with the introduction of new laws.
With the introduction of President Donald Trump’s new tax cut for businesses, the corporate tax rate was cut from 35%-21% beginning in the year 2018 (cite). This new act would allow Whirlpool to not pay out as much taxes, therefore increasing their net income on the books. Overall in 2017, Whirlpool’s net global sales was 21 billion US dollars. This total has the possibility of increasing due to Trump’s new law and the fact that 54% of sales take place within North America (cite).
The economy also plays a lead role in the development of a company. Considering Whirlpool’s global presence, some of these economic factors expand beyond the five that Frank Rothaermel explain in his book, Strategic Management.