Business Environment in the City of Los Angeles

The Pestle analysis involves the economic and social factor affecting some 90% of minorities including approximately 30% of women that need emergency funds or loans in order to stay open for business. The Economic and Workforce Development in the City of Los Angeles have assisted viable enterprises and small businesses in 2020 with approximately 11M.  

These microloans were to replace funds that banks and other lending entities will not be able to accommodate with loans from 5000 to 20000 to keep them afloat during the pandemic.  Businesses must not be able to obtain any loans from other entities or credit unions. Business must not make more than 1M sales/assets combined and have no more than 25 employees (out of the possible employees, these must be composed of low to moderate income earners mainly minorities. The business must have an active Business Tax Registration with the City of LA.  There are also several other grants and loans for small businesses to medium businesses that are approved for credit.

Over 7500 business have permanently been closed and over 400K jobs lost in Los Angeles County since Covid began in March 2019, of these the greatest hit, low-income minorities. The greatest hit are restaurants and hospitality with a total closure of 104K between March and October 2019.

This map consists of 4 different layers. The first layer (Map Notes) consists of the restaurants and marketplaces with the best health inspection ratings (A and higher) (Green outline), the second layer (Map Notes 1) consists of the marketplaces and restaurants with average health inspection ratings (B and higher)(Orange outline), the third layer (Map Notes 2) consists of the restaurants and marketplaces with below average health inspection ratings (D and higher)(Black outline), and the last layer (Map Notes 3) consists of the restaurants and marketplaces that received above average health inspection ratings (B or higher)(Blue outline). While all these restaurants are relatively close to one another and within fairly similar proximity, the purpose of highlighting the addresses with the same health inspection ratings is to show that while they receive different health ratings, the fact they all of these restaurants and marketplaces are so close to each other make it tough to decipher one clear cut area where an individual can go to get higher quality food. With that said, it can be seen that the majority of restaurants and marketplaces with higher ratings (A and B ratings) are located in the Hollywood and Beverly Hills areas and that the ones with lower ratings are in the East LA area and closer to the heart of Los Angeles. With that said, it can be seen that location does indeed play a factor in the quality of restaurants and marketplaces, but with anything else really. The saying holds true that you get what you pay for. 

My map analysis is a highlight of the median household income in Los Angeles. I used the PESTLE framework to choose this external economic factor. I believe public spending power and disposable income can have an effect on any new multinational company. Through ARCGIS I was able to apply two main filters which both visually highlight the median household income in Los Angeles. The first layer is divided into council districts which vary in color with different shades to indicate the median household income in that area. The legend varies from less than $33,000 to more than $72,000. This layer is a broader scope of the data but provides a good visual representation of which area the median household income is the highest. The next layer provides the specific household income for an area and is represented by a green dot. As I mentioned before public spending power can be a critical component to any new multinational company so it’s critical to know where people will have more money to spend and where they will not. 

Historically, low-income neighborhoods are forgotten by banking and financial institutions. In the state of California, 60% of low-income neighborhoods do not have a bank or credit union, making the appeal of check cashing chains and payday loans appealing. Using the heat map layers, we can see the density of banks, primarily in the finance district in downtown Los Angeles.

Pico-Union is the 4th most populated area in Los Angeles, and barely registers on the heat map with one bank or financial institution and is only five places away from being the lowest average household income, $26,424.

What this could potentially mean for incoming businesses is a lack of support in the area by banks in the form of loans or even everyday banking. Making areas that are wealthier more appealing, while also having higher taxes. Low-income areas have more of a need for businesses and banks to help financial build communities but it is lacking even though based on population it is possible there is more of a cash flow from residents.

By utilizing PESTLE, companies can learn/obtain a new perspective on how their companies can strategize to maximize the benefits of their location and make decisions to better these economic opportunities for their companies. For my particular data demonstrated above, I am visually representing the impact of covid-19 job losses within the economic factor from the PESTLE framework. While job loss can have a negative connotation, I decided to focus my research on the strategic elements PESTLE brings to employers. For example, with the amount of job losses that occurred in the neighborhoods of the Greater Los Angeles Area such as Sherman Oaks who suffered a more dramatic loss of jobs totaling 9,083. Comparing this number to a city like El Sereno who totaled loss of jobs was 2, 865. Globalization which is largely touched upon within this classroom setting as establishing this sense of international influence and forming financially beneficial alliances, I believe that this same strategic management approach can be applied to the Greater Los Angeles Area since so many areas who loss their solid pool of employees now have space that can be used towards incorporating globalization into their work environment/space where it might have no been as applied prior to the pandemic. A scenario from lecture instruction that can be connected to my argument above is that startup of IKEA. Within this discussion, it was made clear to me how IKEA was selective with the approach towards managing employees and the location from which their employees came from. IKEA also imported products from other countries allowing them to appeal to more markets since they are able to provide a selection of products for their target market, audience, and customers. Ultimately, what I am trying to emphasize is the opportunities that the economic sector brings to the business environment in the City of Los Angeles. By establishing a strong modern team of employees and offering a selection of remote employment opportunities, the economic sector of PESTLE framework is being utilized by companies in Los Angeles to increase the attractiveness of their incoming business opportunities, candidates who are willing to work for the specific companies, and the location of the business, since location is made accessible even when it is not the most convenient right now to physically be present at the site. Additionally, having implemented remote job opportunities provides space for companies in Los Angeles to become multinational enterprises or who already are to employ more generations looking for internships and entry level opportunities to obtain this experience while sourcing their production of goods from an alternate country to their own, which in this scenario would be The United States. By centralizing my data down to the Los Angeles area and reviewing their job loss data, I am able to gain a greater sense of the relevance to PESTLE framework when considering a companies’ strategies and planning that takes place to establish an economically beneficial business that can maximize profits of factors especially like location.