Introduction
The world changed dramatically in 2020 as the COVID-19 pandemic caused businesses to shut down and the economy to enter a freefall. Before the pandemic, the biggest challenge that faced the business world was the tariffs on Chinese imports, which significantly impacted supply chains for many industries. The pandemic caused a sudden shift in business trends, significantly impacting business profitability and operations. Therefore, this essay will discuss how the PESTLE model applies to the current business climate, provide an overview of two articles discussing those changes, and analyze an article about the future outlook for a specific industry.
Pre-Pandemic Business Trend Articles Analysis
The first article chosen to analyze is “The Impact of Inflation on Small Businesses and How to Manage It,” written by Forbes Finance Council and published in May 2022. The article discusses the impact of inflation on small businesses and how to manage it. It states that inflation directly affects small businesses as it increases production, materials, and labor costs (Forbes Finance Council, 2022). Inflation also affects consumer spending, reducing purchasing power as prices increase. As a result, businesses need to adjust their pricing to remain competitive. The article also states that businesses can manage inflation by increasing production efficiency and looking for ways to reduce costs (Forbes Finance Council, 2022). Businesses can also look for alternative suppliers and new technologies to reduce the cost of materials and labor.
In addition, when analyzing the impact of inflation on a business, it is essential to consider the political, economic, and social factors. Political factors include government policies and regulations that affect businesses (Verma & Gustafsson, 2020). For example, governments may introduce policies to control inflation, such as increasing taxes or cutting spending. Economic factors include the state of the economy and the availability of money. Inflation can cause the cost of goods and services to rise, leading to decreased consumer spending. Social factors include the attitudes and beliefs of consumers, which can affect the demand for goods and services (Verma & Gustafsson, 2020). Technological aspects include using new technologies to reduce costs and increase efficiency. For example, businesses may invest in automation to reduce labor costs. Besides, legal factors include any laws and regulations that may affect businesses. For example, businesses must comply with minimum wage laws, which can increase costs if not managed properly. Environmental factors include the impact of inflation on the environment, such as increased emissions from increased production.
Furthermore, the second article to analyze is “Charts Defined: The 2022 Economy Climate in Ukraine,” written by Raconteur and published in June 2021. The article examines the impact of the pandemic on the Ukrainian economy and provides insights into the country’s economic recovery. The article cites data from the National Bank of Ukraine, which shows that the country’s GDP fell by 6.1% in 2020 and was expected to decline by another 4% in 2021 (Raconteur, 2021). That decline is due to the deterioration in industrial production, which has been affected by decreased demand due to the pandemic, reduced investment, and a fall in exports.
The article also examines the pandemic’s impact on Ukraine’s labor market. The unemployment rate rose to 10.5% in 2020, up from 8.7% in 2019 (Raconteur, 2021). That highlights the disruption caused by the pandemic, particularly in the services sector. That has significantly impacted workers’ wages, which decreased by 4.7% in 2020 (Raconteur, 2021). The article then looks at the impact on businesses in Ukraine. It cites data from the Ministry of Finance, which shows that the total number of registered businesses in Ukraine decreased by around 8,000 from 2019 to 2020 (Raconteur, 2021). That is mainly because many businesses were unable to survive the economic downturn caused by the pandemic.
The article also examines the pandemic’s impact on Ukraine’s banking sector. It quotes statistics from the National Bank of Ukraine, which shows that the total amount of loans issued to businesses decreased by 8.5% in 2020, while the total amount of deposits decreased by 10.2% (Raconteur, 2021). That suggests businesses have become more cautious when taking out loans and investing in the banking sector. Finally, the article looks at the pandemic’s impact on Ukraine’s stock market. It shows that the stock market index decreased by 28.7% in 2020 (Raconteur, 2021). That suggests that investors have become increasingly cautious due to the uncertainty caused by the pandemic.
In terms of the PESTLE model, it is clear that the pandemic has had a significant impact on all of the factors. The Political factor has been affected by the economic downturn caused by the pandemic. In contrast, the Economic factor has been affected by the decline in GDP and industrial production, the decrease in the number of registered businesses, and the decrease in the stock market index (Duong, 2019). The Social factor has been affected by the rise in unemployment and the decrease in wages. Additionally, the Technological aspect has been affected by the need for businesses to adapt their strategies to survive in the current climate (Duong, 2019). Finally, the Legal factor has been affected by the need for businesses to comply with the regulations to protect workers and prevent the spread of the virus.
Future Outlook of Music Industry Article Analysis
The second part of this assignment was to find a good article written in the past year about the future outlook for a specific industry. Therefore, the article chosen for this task is from Billboard Magazine and is titled “The Biggest Music Business News & Trends of 2022.” The article was written in February of 2022 and discusses the current trends affecting the music industry and its future. The first trend is the rise of streaming services, such as Spotify and Apple Music. According to the article, streaming services now account for more than 50% of the global music industry’s revenues and are expected to grow in the coming years (Billboard Magazine, 2022). The article also mentions the emergence of virtual concerts, which have become a popular way for artists to reach their fans amid the pandemic. Additionally, it discusses the potential for the music industry to expand into new markets, such as virtual reality and gaming.
When the article was written, the outlook for the music industry was generally positive. The article highlights that the industry has seen steady growth in the past few years, with revenues increasing by 6.9% in 2020 (Billboard Magazine, 2022). It also mentions that the industry is projected to grow in the coming years, with an expected growth rate of 6.6% in 2021 and 6.2% in 2022 (Billboard Magazine, 2022). However, the article discusses several potential issues affecting the industry’s growth. It mentions the possibility of streaming services saturating the market, which could lead to lower revenues (Billboard Magazine, 2022). In addition, the industry’s reliance on digital services could lead to the capability for copyright issues to arise as the industry continues to expand into new markets.
Moreover, to update the forecast mentioned in the article, statistics show that the music industry’s total revenues in 2020 were $21.6 billion, an increase of 6.9% from 2019 (Billboard Magazine, 2022). Revenues in 2019 were $20.2 billion, an increase of 8.2% from 2018 (Billboard Magazine, 2022). Finally, revenues in 2018 were $18.6 billion, an increase of 9.7% from 2017 (Billboard Magazine, 2022). Those figures demonstrate that the music industry has seen steady growth in the prior few years and is likely to continue like that in the coming years.
Furthermore, the COVID-19 pandemic has significantly affected the music industry due to the restrictions on live events, with canceled and postponed shows and festivals. That has had a substantial impact on the revenues of artists, venues, promoters, and other businesses in the industry, as well as on the jobs of those employed in the music industry (Yeganeh, 2021). The industry has had to quickly adjust to the new trends and pivot to digital platforms to keep generating income. That includes social media, streaming platforms, and virtual concerts. Artists have also had to adapt by creating new ways of connecting with their fans, such as live streaming, video chats, and interactive online experiences (Yeganeh, 2021). Many businesses in the music industry have also had to adjust to the new demands of the industry and invest in technology and digital platforms to remain competitive and profitable.
Conclusion
The COVID-19 pandemic has had diverse impacts on the business world and has changed how businesses operate. The PESTLE model provides a framework for understanding the external environment and how it affects businesses. Hence, this essay has discussed how the PESTLE model applies to the current business climate, provided an overview of two articles discussing the changes in the business world, and analyzed an article about the future outlook for a specific industry. Therefore, businesses must adjust to new trends to remain competitive and profitable.
References
Billboard Magazine. (2022). The Biggest Music Business News & Trends of 2022. Web.
Duong, A. (2019). The PESTEL Model. Web.
Forbes Finance Council. (2022). The Impact of Inflation on Small Businesses and How to Manage it. Forbes. Web.
Raconteur. (2021). Charts Defined: The 2022 Economy Climate in Ukraine. Web.
Verma, S., & Gustafsson, A. (2020). Investigating the emerging COVID-19 research trends in the field of business and management: A bibliometric analysis approach. Journal of Business Research, 118, 253-261. Web.
Yeganeh, H. (2021). Emerging social and business trends associated with the Covid-19 pandemic. Critical Perspectives on International Business. Web.