PESTLE Analysis: Identifying Macro-Environmental Influences

Description:

This activity challenges you to apply the PESTLE framework to the generative AI industry, drawing insights from a real-world interview and your own research. You’ll work in teams to identify key PESTLE factors, analyze their potential impact, and consider their implications for strategic decision-making.

Learning Objectives:

By the end of this activity, you will be able to:

Identify and analyze relevant PESTLE factors for a specific industry.
Evaluate the potential impact of PESTLE factors on industry dynamics and company strategies.
Connect PESTLE analysis to core strategic concepts like customer willingness-to-pay (WTP) and cost structure.
Conduct research and synthesize information from various sources.
Collaborate with your team to analyze and communicate insights.

WSJ's Interview with Lina Khan, The Biden adminstration's FTC Chair.

Description:

The video is an interview with Lina Khan, the chair of the Federal Trade Commission (FTC), discussing the role of government regulation in the age of AI. Khan argues that the government needs to take a more active role in regulating the tech industry to prevent anti-competitive practices and protect consumers. She highlights the challenges posed by AI, such as data scraping and the potential for AI models to be used to discriminate against or exclude certain groups. Khan also discusses the FTC’s efforts to address these challenges, including scrutinizing mergers and acquisitions in the tech industry and proposing rules to ban non-compete clauses.

Chapters:

0:00 Introduction
1:05 Impact of Big Tech on Journalism
3:05 AI and Content Creators
6:05 FTC’s Remedies for AI-Related Issues
9:05 Preventing Abuses While Encouraging Innovation
12:05 National Champion Argument in AI
15:05 Non-Compete Clauses
17:05 Khan’s Philosophy on Free Markets and Capitalism
18:55 Audience Q&A
19:50 Copyright and AI
21:20 FTC’s Overreach and Discussions with President Biden
22:45 Revamping Antitrust Legislation

Steps:

Video Review: Watch the assigned interview with Lina Khan, chair of the Federal Trade Commission (FTC), discussing the role of government regulation in the age of AI. Use the provided video chapters to navigate through the content.
PESTLE Identification:
- Based on the interview, identify the key PESTLE factors that could affect the generative AI industry. Consider the political, economic, sociocultural, technological, legal, and environmental forces at play.
- Expand your analysis by identifying additional PESTLE factors from other sources, such as industry reports, news articles, and academic research.
Impact Analysis:
- Analyze the potential impact of the identified PESTLE factors on the generative AI industry.
- Focus specifically on how these factors might influence customer willingness-to-pay (WTP) and the industry’s cost structure.
- Consider both positive and negative impacts, as well as short-term and long-term effects.
Class Discussion: Engage in a class discussion to share your team’s findings and insights. Compare your analyses and identify common themes or variations.

Reflection:

After completing this activity, reflect on the following questions:

What were the most significant PESTLE factors you identified, and why?
How did your initial analysis based on the video compare to your expanded research?
What challenges did you encounter in conducting the PESTLE analysis?
How can you improve your approach to PESTLE analysis in the future?

Remember: This is an in-class learning activity designed to facilitate discussion and deepen your understanding. The primary deliverable is active participation and insightful contributions to the group and class discussions.

Optional Video Content:

Watch the video linked to below to get a glimpse of cross-cutting relationships between business, society, and government.