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Jumat, 15 Mei 2009

strategy - introduction to PEST analysis

PEST analysis is concerned with the environmental influences on a business.

The acronym stands for the Political, Economic, Social and Technological issues that could affect the strategic development of a business.

Identifying PEST influences is a useful way of summarising the external environment in which a business operates. However, it must be followed up by consideration of how a business should respond to these influences.

The table below lists some possible factors that could indicate important environmental influences for a business under the PEST headings:

Political / Legal
- Environmental regulation and protection
- Economic growth (overall; by industry sector)
- Income distribution (change in distribution of disposable income;
- Government spending on research
- Taxation (corporate; consumer)
- Monetary policy (interest rates)
- Demographics (age structure of the population; gender; family size and composition; changing nature of occupations)
- Government and industry focus on technological effort
- International trade regulation
- Government spending (overall level; specific spending priorities)
- Labour / social mobility
- New discoveries and development
- Consumer protection
- Policy towards unemployment (minimum wage, unemployment benefits, grants)
- Lifestyle changes (e.g. Home working, single households)
- Speed of technology transfer
- Employment law
- Taxation (impact on consumer disposable income, incentives to invest in capital equipment, corporation tax rates)
- Attitudes to work and leisure
- Rates of technological obsolescence
- Government organisation / attitude
- Exchange rates (effects on demand by overseas customers; effect on cost of imported components)
- Education
- Energy use and costs
- Competition regulation
- Inflation (effect on costs and selling prices)
- Fashions and fads
- Changes in material sciences

- Stage of the business cycle (effect on short-term business performance)
- Health & welfare
- Impact of changes in Information technology

- Economic "mood" - consumer confidence
- Living conditions (housing, amenities, pollution)
- Internet!


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