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PEST AnalysisPEST Analysis
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PEST AnalysisPEST Analysis
► PEST is the best technique for scanning of macro PEST is the best technique for scanning of macro level environment which include political, level environment which include political,
economic, social and technological factors.economic, social and technological factors.
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Political FactorsPolitical Factors
► Political factors are the rules, regulation, constraints Political factors are the rules, regulation, constraints and condition made by government. Organization and condition made by government. Organization doing business in country must be agreed upon the doing business in country must be agreed upon the term and condition enforced by Government.term and condition enforced by Government.
► Some examples of political factors includesSome examples of political factors includes- Taxes on product and services- Taxes on product and services- Employment laws- Employment laws- Tariffs- Tariffs- Trade- Trade- Political Stability- Political Stability- Government policy on economy- Government policy on economy
Economic FactorsEconomic Factors
► Economics factors are important to know the Economics factors are important to know the purchasing power of people, stability of economy. purchasing power of people, stability of economy. Fluctuation in economy impact prices of product Fluctuation in economy impact prices of product and services organization offers to their customers. and services organization offers to their customers. These issues are important in third world country These issues are important in third world country because during recession and depression demand because during recession and depression demand goes down.goes down.
► Some examples of economic factors areSome examples of economic factors are- Higher the interest rate lowers the investment.- Higher the interest rate lowers the investment.- Economic growth in terms of GDP- Economic growth in terms of GDP- Inflation rate- Inflation rate- Exchange rates- Exchange rates
Social FactorsSocial Factors
► Organizations must evaluate social factors of the Organizations must evaluate social factors of the country before starting business. Social factors country before starting business. Social factors include relationship, ethnic groups, religion, age include relationship, ethnic groups, religion, age distribution and others.distribution and others.
► For exampleFor example- If marketers does not knows the social values of - If marketers does not knows the social values of woman in society and start advertising campaign of woman in society and start advertising campaign of woman undergarments.woman undergarments.
► - Offering products for young people at a place - Offering products for young people at a place where the majority of people are above 40 years.where the majority of people are above 40 years.
Technology factorsTechnology factors
► Technology is now become the part of majority of Technology is now become the part of majority of organization. Technology is driving the business and improves organization. Technology is driving the business and improves quality and reduces time to market of product and services. In quality and reduces time to market of product and services. In industry where the technology change with fast pace make it industry where the technology change with fast pace make it difficulty for the organization to adopt due to cost and human difficulty for the organization to adopt due to cost and human resource issues.resource issues.
► Some technology factors areSome technology factors are- Research & Development activity- Research & Development activity- Automation- Automation- Technology incentive- Technology incentive- Rate of technology change- Rate of technology change- Technological shifts- Technological shifts
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