Qureshi Mohammed Hasan

Strategic Management ASSIGNMETN

PEST ANALYSIS
With the introduction of open international trade, businesses now have more opportunities to offer their products and services to foreign markets.In order to do this, companies typically answer the questions as to which foreign market will they be entering, how will they enter it and when will be the best time to enter it. Once the company has identified it market prospect, it is then important that the company analyze and understand its selected market Environment. PEST stands for Political, Economic, Social and Technological Environment of Prospect Market for Business. PEST provides insightful details regarding different factors of external environment that an organization must monitor. Business Strategies are carefully planned and executed to gain the ultimate goal of the company growth. The following are some of the factors within the external environment that the management of the company must consider. Political (Legal) Aspects

A company will not be able to gain success, good reputation and trust if it will not consider legal and political sector as part of their strategy. Political and legal sectors include the needs of the company to follow the given policies and regulations of the government in order to be considered as legal and authorized business company. Like: Tax policy Employment laws Political stability Environmental regulations Trade and tariff restrictions

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Qureshi Mohammed Hasan

Economic Aspects

It is important that a certain company must also give enough attention to its economic stability. The economic goal of a certain industry is like an axis in which other objectives or goals are revolving. The economic factor involves the competition in which a company operates the active demand of the products, general economic condition of the nation or region, conditions in relation with other industries, and the situation of the resource markets. Economic stability Economic growth Interest rates Inflation rates Exchange rates

Socio-cultural Sector

Society and culture is an important factor that must be given emphasis by any business, specifically those who are operating in the global arena. It is important that the company must operate in compliance with the social systems in order to gain good reputation and effective public image. On the other hand, cultural aspects is equally essential, in order to understand the various needs of different individuals that belongs to different cultures. Population growth rate Age distribution Career attitudes Consumer behavior Religion and culture itself

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Technological Aspects

The complexities of achieving business success through increased efficiency, effectiveness and competitiveness, combined with innovative applications of modern technology, has heightened the awareness of both technology and business managers towards more strategically oriented approaches for planning and management of any industry. Hence, it is important that a company must be able to give consideration to the technological aspects. Distribution and communication channels Technology incentives Automation Rate of technological change Environmental and ecological aspect Barriers to entry Production level outsourcing decisions

Here is the true example of BMW when they decide to enter JAPAN what PEST analysis the company has done and how company strategized to meet with all conditions: BMW in JAPAN It's PEST Analysis BMW IN JAPAN BMW is one of the most popular automobile companies all over the world because of its efficiency service on the road reduced fuel consumption and less emission mechanism. You can also find here the most variety of designs and exclusive elegant features that matches your personality. This automobile company is also one of the most sustainable companies in an automobile industry as of 2010. There are many new models that you can choose from you can easily identify over the net that will suite your preference if you intend to buy their automobile. You may also visit their branches located all over the world.

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In Japan the BMW group still shares and enjoy marketability acceptance among people especially within the working class environment. They tend to use the Political, Economical, Social, Technological (PEST) Analysis point of view including competitor position. Their unmatched business strategy has been effective throughout the world using this technique. 1. Politically motivated as reliable partners of society in bringing and developing a sustainable trading policies and worldwide adaptability and initiative among their employees and customers. This company follows government restriction, anti corruption implementation and guideline as restricted by the government ex. Is like paying taxes in time to generate investment among countries like Japan. 2. Economics In terms of economical condition applies a variety of prices in different models of automobile whichever they preferred. They offered high quality premium automobiles that cater to different market status. In Japan they even offer second hand cars for customers who prefer to buy cheaper automobiles but still assume high quality and economically designed for perfection that is why they assure that customers in Japan will enjoy the same benefit of a brand new automobile. 3. Social BMW in Japan promotes their Social Responsibility by bringing traffic safety standard training to its customers, they even teach children about mobility and social skills such as teamwork and intercultural understanding. From their factory including China, Korea and Japan, they also develop a recycling and recovery project in their vehicle components to further encourage the world from waste management issues. 4. Technological In this aspect you can absolutely says that their technology has been their best selling point because of its outstanding features and performance their product innovation, durability and quality has gather unquestionable response among customers. Technologically satisfaction guaranteed. They have a co creation Laboratory that basically caters to customers who have the knowledge and ability to design their own automobile. This means that you can pass on your idea if you want to. BMW is driven by endless innovation and desire to offer absolute customers satisfaction for each and every automobile they have sold to the market including an emerging newly industrialized country in Asia. NAME: ROLL NO: DIV: HKIMSR DATE: 3RD AUGUST 2011
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QURESHI MOHAMMED HASAN 34 A