PESTLE analysis of Mexico Essay Example

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6PESTLE Analysis for Mexico

PESTLE Analysis for Mexico

PESTLE Analysis for Mexico

This paper will analyze the political; economic, social, technological, legal and environmental for Mexico. The main aim is to provide an incisive analysis of the mentioned factors with a view to understanding holistic overview of Mexico featuring the historical, current happenings; and the future occurrences. In addition to this the essay will explain how the factors affect business decision in that country.

Political Factors

Analyses of political factors provide an insight on political system of a particular country and how occurrences in the political system have an influence on business decision. Political factors are related to government of the day and legislation of laws in country. In Mexico, they are rued by federal government which has the responsibilities of passing and enforcing the laws touching on every aspect of human life and businesses in that country. Therefore, all the actions implemented by the government of the day affect firms and other business organization in that country and how they operate (Dixon 2013, p. 13). In addition to this, the county has local governments which makes law and by laws to supplement federal legislation. All this affects how the firms are operating.

In Mexico, there are various regulations affecting business in that country although they differ across States. For example, the tax regime is very different among these States, legislation concerning how workers are treated and the right of workers to form or join labour unions. On the other hand, there are Local governments which have their own effects to business which are more or less lie that of a federal/national government. Some of the local governments in Mexico have their own way of dealing with business. For example some engage in rebranding to lure investors to invest in their locality, tax regime, improvement of infrastructure, reducing bureaucracy when applying a business permits etc. (Dixon 2013, p. 13).

Economic Factors

Mexico has grown in terms of GDP and the inflation rate is low. The country also has a lot of natural resources and agricultural products which contribute to the overall growth of the economy. Their manufacturing sector is expanding exponentially and international trade is booming. In this essay, economic factors tend to provide information relating micro-economic factors. These factors affect the direction in which the firms in the country run their business operations. They also explain factors such country’s balance of payment, fiscal policies present, distribution of state resources amongst others (Dixon 2013, p. 15).

Social Factors

The essay also evaluates social factors of Mexico. Social factors has everything to do with comprehensive understanding of how consumers are classified, how much they earn, education, their buying behavior and power, health care, segmentation of this consumers in rural and urban centers. In terms of population the country is very populous in the whole region and most of the people speak Spanish. Majority of the population prefer living in urban areas as compared with those living in rural centers. Currently the country is struggling with unemployment as many young people have no means of sustaining their self (Dixon 2013, p. 20).

These factors above, affects how business operates in that country. In addition to this, there are other sociocultural dimensions such as the culture of the people, cultural values, customs and their lifestyle. These components affect how the firms operate their businesses. I.e. how they operate their business, how they obtain the raw materials to manufacture their products and how they distribute their goods and services they produce. For example when the area the business is operating it affects how they distribute their services and the pricing. On the other hand when the level of literacy is high the firms will have readily available skills required to produce for the consumers and the market in general. Mexico has responded to this universalizing education to all to ensure those who can afford have access to education (Dixon 2013, p. 23).

Technological Factors

Technological factors of a country provides an insight on how the country responds to technological gaps, how they formulate policies relating to such, how the country parent technologies and the opportunities available to use technology in business firms such as communication, manufacturing etc. In Mexico, the advent of technology has revolutionized the way in which firms have adopted technology to perform myriads of activities. In Mexico, technology has changed how firms communicate with their consumers, how they book their products through the internet. This is a dramatic departure from traditional ways of dealing with their consumers (Dixon 2013, p. 24).

In addition to this, technology is evolutionary. So, there are new and emerging techniques of producing and distributing their products and offering their services. Fortunately, in Mexico technology such as use of microcomputers is not a preserve of big organizations only; even small businesses are quickly adapting to technology. Therefore, a conclusion can be reached that technology is pervasive in every type of business irrespective of the size and the industry. Technology has introduced new techniques, speed and new ways of reaching the market. For example firms are able to refine their products thus exploiting their market potential, a phenomena which was impossible in the past few years (Dixon 2013, p.25).

Legal Factors

Each country has legal factors which affect the way firms operate their business and how they affect the aspiring firm. Legal factors in Mexico include laws managing registration of new business and corporates. They also include structure of legislated laws and the taxing system. Legal dimension in Mexico has a bearing on firms operations and the business environment because there are rules and regulations restricting business on things they can do and cannot do. This affects the business directly because businesses cannot take any action without referring to laws and regulation. For example, there are laws which define competitive practices, area of consumerism among others. Failure to adhere to this will result into a legal implication for the firm (Dixon 2013, p. 30).

Environmental Factors

The last factor in the essay is environmental factors. These factors describe environmental indicators of a country. For a long time, the country is known to have a deep history with environmental factors and they are very strict in how they manage their resources especially those deposit found at the border. This is because they have had an increasing problem with their environment due to rapid population growth for decades, evolution of manufacturing industries etc. This causes pollution of environment leading to many chronic diseases. This affects how government formulates policies regarding their environmental situation (Dixon 2013, p. 35).


The above factors namely: political, economic, social, technological, environment and legal factors have the ability to affect the way firms run their business positively and negatively. So, no firm can ignore them when setting their business. Ignoring the factors may prove to be costly to them and can even cause the firm to collapse.


, Routledge Economic analysis of environmental impactsDixon, J 2013,