MGT Notes

Reference: Strategic Management (5e) – Frank T. Rothaermel (Pg 78)

Sociocultural factors (S in PESTEL) refer to the cultures, norms and values of the society in which the firm is operating. These form important considerations when formulating a strategy since they are constantly in flux and differ across groups. As an example, when social media adoption among populations was growing, firms needed to adopt their media strategy to address this form of communication. Another example is when consumers started displaying a more health conscious demeanor, which prompted food companies to adjust their offerings to meet this opportunity.

Demographic trends are also important sociocultural factors since they capture population characteristics and can change the landscape of the available opportunities and threats. The mix of a population (age, gender, etc) can have a sizable impact on a business’s offerings as they try to cater to the dominant group.