MGT Notes

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

Technological Factors (T in PESTEL) refer to instances of knowledge application to the design of new products and processes. These factors are also critical for a firm to keep an eye on because technological progress can be relentless and such changes bring both opportunities and threats for a firm to gain and sustain competitive advantage.

As an example, current exponential advances in Artificial Intelligence (AI) technology not only bring about opportunities for firms to increase operational efficiency (by incorporating AI into relevant processes) but also face the threat of falling behind on seizing these opportunities among their peer groups.