DRAFT FINAL QUES 1
1) “PEST analysis is used by businesses around the world to devise a strategic approach to their activities”. Discuss this statement highlighting the various components of the said analysis (25 marks).
Introduction
P.E.S.T is a mnemonic standing for Political, Economical, Social and Technological. P.E.S.T analysis scans the impact of each of the factors on the business. The results can be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans (Byars, 1991). The use of P.E.S.T. analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports.
P.E.S.T analysis identifies the Political, Economic, Social and Technological factors can influence businesses strategic approach to their activities as shown in the following table:
Political (include Legal)
Economic
Social
Technological
Environmental regulations and protection
Economic growth
Income distribution
Government research spending
Tax policies
Interest rates and monetary policies
Demographics, population growth rates, age distribution
Industry focus on technological effort
International trade regulations and restrictions
Government spending
Labour/social mobility
New inventions and development
Contract enforcement law
Consumer protection
Unemployment policy
Lifestyle changes
Rate of technology transfer
Employment laws
Taxation
Work/career and leisure attitudes
Entrepreneurial spirit
Life cycle and speed of technological obsolescence
Government organisation / attitude
Exchange rates
Education
Energy use and costs
Competition regulation
Inflation rates
Fashion, hypes
(changes in) Information Technology
Political stability
Stage of the business cycle
Health consciousness and welfare, feelings on safety
(changes in) Internet
Safety regulations
Consumer confidence
Living conditions
(changes in) Mobile Technology
(Source: http://www.valuebasedmanagement.net/)
Introduction
P.E.S.T is a mnemonic standing for Political, Economical, Social and Technological. P.E.S.T analysis scans the impact of each of the factors on the business. The results can be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans (Byars, 1991). The use of P.E.S.T. analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports.
P.E.S.T analysis identifies the Political, Economic, Social and Technological factors can influence businesses strategic approach to their activities as shown in the following table:
Political (include Legal)
Economic
Social
Technological
Environmental regulations and protection
Economic growth
Income distribution
Government research spending
Tax policies
Interest rates and monetary policies
Demographics, population growth rates, age distribution
Industry focus on technological effort
International trade regulations and restrictions
Government spending
Labour/social mobility
New inventions and development
Contract enforcement law
Consumer protection
Unemployment policy
Lifestyle changes
Rate of technology transfer
Employment laws
Taxation
Work/career and leisure attitudes
Entrepreneurial spirit
Life cycle and speed of technological obsolescence
Government organisation / attitude
Exchange rates
Education
Energy use and costs
Competition regulation
Inflation rates
Fashion, hypes
(changes in) Information Technology
Political stability
Stage of the business cycle
Health consciousness and welfare, feelings on safety
(changes in) Internet
Safety regulations
Consumer confidence
Living conditions
(changes in) Mobile Technology
(Source: http://www.valuebasedmanagement.net/)