Example PEST Analysis and practical exercise

The PEST analysis takes a look at the external environment that the
organisation is in. It quite simply asks us to consider the political, economic,
social and technical infuences on an organisation. This is sometimes called
STEP and can even including environmental and legal considerations.
Below is an exemplar analysis of Coca-Cola
P Political change government agendas or perormance, targets and
unding
Political Analysis for Coca-Cola
!on"alcoholic #everages all $ithin the ood category under the %&'. The
government plays a role $ithin the operation o manuacturing these products
in terms o regulations. There are potential (nes set #y the government on
companies i they do not meet a standard o la$s.
The ollo$ing are some o the actors that could cause )oca")ola company*s
actual results to di+er materially rom the expected results descri#ed in their
underlying company*s or$ard statement,"
)hanges in la$s and regulations, including changes in accounting
standards, taxation requirements, -including tax rate changes, ne$ tax
la$s and revised tax la$ interpretations. and environmental la$s in
domestic or oreign /urisdictions.
)hanges in the non"alcoholic #usiness environment. These include,
$ithout limitation, competitive product and pricing pressures and their
a#ility to gain or maintain share o sales in the glo#al market as a result
o action #y competitors.
Political conditions, especially in international markets, including civil
unrest, government changes and restrictions on the a#ility to transer
capital across #orders.
Their a#ility to penetrate developing and emerging markets, $hich also
depends on economic and political conditions, and ho$ $ell they are a#le
to acquire or orm strategic #usiness alliances $ith local #ottlers and
make necessary inrastructure enhancements to production acilities,
distri#ution net$orks, sales equipment and technology.
0oyal %orest o &ean )ollege 121123456.doc
5 7uly 1884
E Economic change changes in employment, increased regional
competition, independent training providers
Economic Analysis for Coca-Cola
9ast year the :.S. economy $as strong and nearly every part o it $as gro$ing
and doing $ell. ;o$ever, things changed. <ost economists loosely de(ne a
recession as t$o consecutive quarters o contraction, or negative =&P gro$th.
>n <onday 1?, the government o@cially declared that the :.S. has #een in
recession since <arch. (CBS Market Watch. " U.S. Ofcially in a recession." Rex
Nutting. [no !"#!$$%&. '''.c(s)arket'atch.co)*
;o$ever, #ecause o aggressive action #y the %ederal 0eserve and )ongress it
$ill #e short and mild. The economy $ill return to sustained, positive gro$th in
the (rst hal o 1881.
%uture >utlooks
The %ederal 0eserve is doing all that it can help the economy recover.
They have cut the interest rate ten times this year. The rate no$ lies at a
28"year lo$ o 1A. 9o$ering the interest rates $ill ultimately excite
consumer demand in the economy. )ompanies $ill expand and increase
use o de#t as a result o the lo$ #orro$ing rates. )oca")ola can #orro$
money or investing in other products as the interest rates are lo$. It can
use the #orro$ing on research o ne$ products or technology. 's
researching or ne$ products $ould cost less the )oca")ola )ompany $ill
sell its products or less and the people $ill spend as they $ould get
cheap products rom )oca"cola.
Beore the attacks on Septem#er 33, 1883, the :nited States $as
starting tot see the economy recover slightly and it is only /ust recently
that they achieved the economic levels. )onsumers are no$ resuming
their normal ha#its, going to the malls, car shopping, and eating out at
restaurants. ;o$ever, many are still handling their money cautiously.
They #elieve that $ith lo$er infation still to come, consumers $ill
recover their con(dence over the next year.
The non"alcoholic #everage industry has high sales in countries outside
the :.S. 'ccording to the Standard and Poor*s Industry surveys, C%or
ma/or sot drink companies, there has #een economic improvement in
many ma/or international markets, such as 7apan, BraDil, and =ermany.C
These markets $ill continue to play a ma/or role in the success and sta#le
gro$th or a ma/ority o the non"alcoholic #everage industry.
0oyal %orest o &ean )ollege 121123456.doc
5 7uly 1884
S Social change changing aspirations o students, lie"long learning, shorter
careers
Social Analysis for Coca-Cola
<any :.S. citiDens are practicing healthier liestyles. This has a+ected the
non"alcoholic #everage industry in that many are s$itching to #ottled
$ater and diet colas instead o #eer and other alcoholic #everages. 'lso,
time management has increased and is at approximately 25A o all
households. -http,EE$$$.cd"mn.org.. The need or #ottled $ater and
other more convenient and healthy products are in important in the
average day"to"day lie.
)onsumers rom the ages o 5F to 44 are also increasingly concerned
$ith nutrition. There is a large population o the age range kno$n as the
#a#y #oomers. Since many are reaching an older age in lie they are
#ecoming more concerned $ith increasing their longevity. This $ill
continue to a+ect the non"alcoholic #everage industry #y increasing the
demand overall and in the healthier #everages.
T Technological change computers, internet, e"learning learn any$here.
Technological Analysis for Coca-Cola
Some actors that cause company*s actual results to di+er materially rom the
expected results are as ollo$s,
The e+ectiveness o company*s advertising, marketing and promotional
programs. The ne$ technology o internet and television $hich use
special e+ects or advertising through media. They make some products
look attractive. This helps in selling o the products. This advertising
makes the product attractive. This technology is #eing used in media to
sell their products.
Introduction o cans and plastic #ottles have increased sales or )oca"
)ola as these are easier to carry and you can #in them once they are
used.
's the technology is getting advanced there has #een introduction o ne$
machineries all the time. &ue to introduction o this machineries the
production o the )oca")ola company has increased tremendously then it
$as e$ years ago
))E has six actories in Britain $hich use the most stat"o the"art drinks
technology to ensure top product quality and speedy delivery. Europe*s
largest sot drinks actory $as opened #y ))E in Gake(eld, Horkshire in
3668. The Gake(eld actory has the technology to produce cans o )oca"
)ola aster than #ullets rom a machine gun.
0oyal %orest o &ean )ollege 121123456.doc
5 7uly 1884
PEST analysis exercise
)reate a PEST analysis o an organisation. Hou $ill need to (nd inormation #y
researching the $e# sites and ne$s articles a#out the one o the ollo$ing
organisations.
)hoose rom,
$$$.e#ay.com
British 'ir$ays
Post >@ce
'rgos
Iellogs
!okia
Hahoo
Hour college
POLITICAL government agendas or perormance, targets and unding
ECOO!IC changes in employment, increased regional competition,
independent training providers
SOCIAL changing aspirations o students, lie"long learning, shorter careers
TEC"OLO#ICAL computers, internet, e"learning learn any$here
PEST ANALYSIS
Political
Economic
Social
Technological
0oyal %orest o &ean )ollege 121123456.doc
5 7uly 1884