Technological Factors Affecting Business

When appropriately applied, PESTLE analysis may be a handy tool in business. It is classified as ‘environmental analysis,’ as it is concerned with finding the different external elements that affect a business’s success. 

These include the Political, Economic, Social (sometimes sociocultural), Technological, Legal, and Environmental dimensions, hence the acronym ‘PESTLE.’

Technological criteria are used to compare various alternatives based on their technological capabilities. Organizations view it as a critical instrument for optimizing their operations and services. 

Technological factors can have a significant impact on enterprises and are also part of the PESTLE study. 

Due to the uttermost reliance on equipment in the modern-day, technological elements can significantly impact corporate operations and success worldwide than ever before.

One of the advantages of PESTLE analysis in particular (compared to other company management/analysis methods) is its ease of use, provided you are familiar with the six categories. 

That is why we are publishing this series of essays devoted to each category, starting with P and ending with E. We’ll provide definitions, detailed explanations, and concrete examples.

What Is the Technological Factor?

Technology factors affect PESTLE analysis because they relate to the availability, development, and existence of technology. This can include everything from computing power to engine efficiency.

The Impact of Technological Factors on Business Environment

It may be difficult to see how technical variables can directly impact a company unless one takes a step back and considers all of the technology used in daily life. 

Consider the machinery that prints the t-shirts you purchase, the computer servers that maintain the website(s) you own, or the petrol that powers the car(s) you drive. The technology substantially dictates the way many things are done, in business or otherwise.

Technology trends affect organizations on numerous levels. When an employee is efficient, he turns out to be productive. 

Additionally, the more in touch a firm is with its current and prospective customers, the better its chance of developing a solid customer loyalty base. 

Technological advancements may make this possible. Strategic leaders are continually on the lookout for technical advancements and improvements. 

They will improve their operations and have a better understanding of the company’s transformational phase. They will develop game-changing techniques for exponential growth.

Marketing Strategies can be Developed Using Technology.

Technology has altered the way businesses acquire, record, retrieve, and utilize data and assist them in developing game-changing business plans. 

Businesses can monitor and evaluate customer patterns and their demand for a particular product using accessible data. 

Businesses may now comprehend consumer behavior, undertake macro-environmental analysis, and design marketing strategies accordingly due to the evolution of information technology.

Not only is technology advantageous for gathering and utilizing data, but it is also used by organizations to analyze data and arrive at relevant findings and educated judgments. 

With a greater emphasis on the client, business tactics will undoubtedly be effective in ensuring an organization’s success.

Operational Efficiency is Transformed Using Technology

The technology environment in which businesses operate has altered the way they operate. Information technology advancements have nearly taken over every area within a corporation. 

Compared to the traditional method of storing data in registers and files, information is now kept in data servers and cloud technology.

Additionally, technological advancements have resulted in the introduction of digital marketing tactics that enable businesses to promote their products and services. 

Business research and development R&D departments have adjusted their methods of operation, and they have been able to introduce more advanced methodologies for developing products and services only through technical improvements.

Siemens and Boeing, for example, are spending heavily on the adaptation of 3D printing technology for product design. 

They claim that by doing so, they may accelerate the design process, cut production costs, and increase design effectiveness.


The following are examples of technological factors that affect businesses:

  • Connectivity to the internet
  • Charging wirelessly
  • Automation
  • Cryptography’s security
  • Existence of 3D technologies Calculation speed/power of computers
  • Computers’ capacity to generate genuinely ‘random’ numbers
  • The efficiency of the engine

Let’s explore how these factors can affect your business in more detail:

Connectivity to the internet

It is undeniable that worldwide internet connectivity has increased in recent years. This expands the market for many businesses that rely on the internet to communicate with their clients. 

Technological Factors

The rise of internet connectivity could mean a fall in interest in traditional modes of communication, which would damage some, including telephone companies that would have to adapt to stay relevant and paper-and-ink printers that may see increased competition.

Today, practically every business has a website that enables them to establish and maintain a global presence. The social media platform provides businesses with easy access to their target audience. 

Additionally, you can communicate effortlessly with employees, clients, and coworkers in different nations via internet technology.


The automation of numerous low-skilled activities enables businesses to replace human production lines altogether with automated ones. 

This can help manufacturers, distributors, supermarkets, and a variety of other firms cut expenses. On the other hand, the progressive development in job automation may be detrimental to job search firms.

By automating multiple production lines, businesses can replace unskilled human labor with machine labor. 

This benefits the business by lowering costs for manufacturers, suppliers, retail shops, and other stakeholders. However, this aspect has a detrimental effect on an economy’s employment level.

Technological Factors Affecting Starbucks

Starbucks has numerous chances as a result of the growth and use of mobile technologies. They’ve already partnered with Apple to use their products as a platform for displaying advertisements and promotions.

Starbucks saw an opportunity to revamp their coffeehouses and differentiate themselves from the competition by giving free WiFi.

Mobile payments are gradually being adopted, which may boost the appeal of a morning cup of coffee for many customers and, in doing so, increase their potential market.

Technological Factors Affecting Tesco

Tesco is a multi-channel and general merchandise retailer based in the United Kingdom. Tesco benefits from technological advancements. 

To begin, it pioneered FRID retail technology and expanded its product line using FRID tags. RFID technology enables the automation of administrative tasks such as stock counting.

Second, clients can pay in whichever currency they like. Tesco introduced PayQwiq, a mobile payment platform, in over 524 stores.

 Consumers can download the PayQwiq app and pair it with a Clubcard or NFC-enabled device. It enabled customers to pay for their purchases and earn loyalty points at the same time.

Thirdly, “scan as you shop” checkout stations facilitated client convenience while lowering labor costs.

Technological Factors Affecting Apple

Many of Apple’s products are easily replicated by competitors. The growing desire for mobile technologies will diminish the appeal of the personal computer.

Apple’s highly restrictive native Operating Systems can severely limit the capabilities of their gadgets.

Cybercriminals’ increasing numbers could threaten Apple’s reputation for safety and security.

Negative Impact of Technological Factors on Business

Business Relationships

Businesses can now hold meetings using Internet technology such as Skype and other chat rooms without requiring all stakeholders to be physically present in the exact location. In comparison to a face-to-face meeting, this form of meeting is less personal. 

Technological Factors

Thus, the human dimension of corporate connections tends to diminish. Due to a lack of physical proximity, brainstorming and other communication kinds that involve personal touch have been diminished.

Technological Environment

The technological environment has a beneficial effect on a company. The internet facilitates and simplifies communication. Despite the positive effects that technology has on the business environment, it also has inevitable negative consequences.

Physical Shops

Advances in e-commerce technology have a detrimental effect on physical businesses. Small businesses are having a difficult time competing with online and larger businesses in the industry that operate offline and online. 

This improvement in the commercial, technological environment finally drives tiny firms to close their doors.

Final Words on Technological Factors Affecting Business

Technical factors can affect a company’s performance and are a major component of a PESTLE study. 

They can be characterized as variables affecting the presence and development of technology on a local or global scale. Numerous examples of technical elements affecting business may be found in firms ranging from Apple to Starbucks.

Do you have any further examples of technical factors affecting business? Please include them in the comments section below, along with your questions and remarks.

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