Question

what are the Impacts of COVID 19 on PESTLE on Asia countries, and what are actions were taken and recommended actions?

Answer 1

Pestle analysis is a tool that is used to understand the external factors that impact a firm or region. In Pestle, following aspects are covered:

• Political
• Economic
• Social
• Technology
• Legal
• Environmental

This analysis gives a holistic view on all the different parameters and how any change in any of them impacts business. COVID 19 originated in China and led to a global pandemic at start of 2020. The first reported cases in China were in Dec 2019 and it later led to uncontrolled spread across the globe. This unprecedented spread led to global shutdown of business, commercial and tourist activities.

By using PESTLE analysis, one can identify the impact they had in Asia Region:

Political – The governing rules and regulations in the Asia were made strict with regards to imports and exports both of business and travels. The rules and policies changed as per the situation and this can have serious impact on business. But the governing laws are also looked after by WTO and this ensures there is consistency in the policies that are being passed at various intervals. This enables firms to focus more on the business rather than worry about political issues. Very often the government support and budget allocated helps in maintaining the deficit budgets. The repo rate also has impact on the business. Governments across regions have agreed to support businesses and community in this period of disaster.

Economic – Over the last few years, there has been increased consumption of products and services while the income has remained constant. But during this period, the economic situation of region suffered and businesses were curtailed. Though essential services were available, flow of revenue was not available. This has led to increased borrowing from banks and other financial firms. Banks have offered increased credit period to lots of their customer on loans. If the economic situation goes down, then the firms could be in serious trouble to recover the money. But as of now, the GDP has suffered and will take longer period to recover.

Social – Community plays a huge role in this period. In this case, there was extensive support from local communities. There has been a change in the attitude of consumers towards savings and approaches towards social distancing. Through community support, the spread of coivd19 has been reduced. But this has impacted business ventures. Without support from the community, businesses are losing revenues in the short term.

Technological – the exposure of COVID 19 has shown the technological advances in the Asia region. Firms have provided support to members and staff to work remotely. This has also provided an opportunity for firms to explore multiple areas to support businesses remotely. IT firms in this region have continued the work and business support have continued. There is an additional strain on IT infrastructure due to the increased use of the internet for work and personal uses. Firms have pushed heavily for digitization and is investing heavily in research of new security features and improved customer experience. Banks have supported net-based banking, mobile payments and has ensured the internet penetration is being used in the right manner.

Legal –firms have continued to explore ways through which legal contracts and agreements can be extended in this period. Since the pandemic has continued beyond the financial year, firms across Asia have taken the decision to honor existing agreements and continue the same until business resumes. This has impacted certain changes in securities law, intellectual property rights, consumer protection law, and other business contacts that they enter with corporate and consumers. Additional governance is given to ensure all consumer data is protected from external parties and no unauthorized party can access data or the financial records.

Environmental – the ecological landscape has changed over this period with lower transportation and this has ensured there is cleaner air and lower pollution. The pandemic has reduced travel and industrial work leading to lower outputs.

The actions that were taken by firms and governments in this region to support business mirror the philosophy of governance. Each region has continued to focus more on health and medical services as the highest priority. They have also passed ordinances and budgets to support business and community. The recommendation to firms in the region would continue supporting remote work and train staff to follow the published advisories.