The founder thought internet usage was increasing at rapid phase.
A successful organisation will not only understand existing factors but also forecast change, so that it can take advantage of change within the environments in which it operates.
Macro Environment — This Slept analysis external forces that an organisation can't directly control, instead organisations need to manage their macro environment in a way that benefits them. Micro Environment - This is made up of internal factors which means that the organisation is able to control their micro environment.
To learn more about the micro environment and marketing click on this link Micro Environment. The diagram below shows the 4 components of PEST Analysis; political, economical, social and technological.
Political factors influence organisations in many ways. Political factors can create advantages and opportunities for organisations. Conversely they Slept analysis place obligations and duties on organisations.
Political factors include the following types of instrument: Legislation such as the minimum wage or anti discrimination laws. Voluntary codes and practices Trade agreements, tariffs or restrictions Tax levies and tax breaks Type of government regime e.
Ineffective voluntary codes and practices will often lead to governments introducing legislation to regulate the activities covered by the codes and practices. All businesses are affected by national and global economic factors.
National and global interest rates and fiscal policy is set around economic conditions. The climate of the economy dictates how consumers, suppliers and other organisational stakeholders such as suppliers and creditors behave within society.
An economy undergoing recession will have high unemployment, low spending power and low stakeholder confidence. A successful organisation will respond to economic conditions and stakeholder behaviour.
Furthermore organisations will need to review the impact economic conditions are having on their competitors and respond accordingly. In the current business world, organisations are affected by economies throughout the world and not just the countries in which they are based or operate from.
Cheaper labour in developing countries affects the competitiveness of products from developed countries. A truly global player has to be aware of economic conditions across all borders and needs to ensure that it employs strategies that protect and promote its business through economic conditions throughout the world.
Social The third aspect of PEST focuses its attention on forces within society such as family, friends, colleagues, neighbours and the media.
Social forces affect our attitudes, interests and opinions. These forces shape who we are as people, the way we behave and ultimately what we purchase. For example within the UK people's attitudes are changing towards their diet and health.
As a result the UK is seeing an increase in the number of people joining fitness clubs and a massive growth for the demand of organic food. Products such as Fitbit attempt to deal with society's concern, about lack of exercise.
Population changes also have a direct impact on organisations. Changes in the structure of a population will affect the supply and demand of goods and services within an economy.
Falling birth rates will result in decreased demand and greater competition as the number of consumers fall. Conversely an increase in the global population and world food shortage predictions are currently leading to calls for greater investment in food production.For example, some of the SLEPT factors affecting the airline industry in recent years include: Social: increased popularity of foreign travel leading to a boom in demand for air travel.
However, this has been adversely affected by international terrorism. SLEPT analysis Before creating business plans or when evaluating existing ones it is important to 'scan' the external environment.
This takes the form of a SLEPT analysis, i.e. an investigation of the Social, Legal, Economic, Political, and Technological influences on a business. To make it easier to understand a SLEPT analysis, we will use the example of how an online bookstore may use a SLEPT analysis to understand their external environment.
Explanation of SLEPT Categories S ocial factors are those related to the population or market served by the organization. Our pest analysis chart really showed us a lot of valuable information that we needed in our company to move forward.
17 people found this helpful You need to do a pest analysis to make sure that you do not have to many unwanted creatures in your warehouse.
PEST analysis (political, economic, socio-cultural and technological) describes a framework of macro-environmental factors used in the environmental scanning component of strategic management.
This analysis considers anything from buyer types, past prices, economic conditions, trends or patterns, product history and differentiation, as well as the capacity of the firms in the industry.