PEST Analysis

What is PEST Analysis? It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up of: 1. The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc. 2. The micro-environment e.g. our external customers, agents and distributors, suppliers, our competitors, etc. 3. The macro-environment e.g. Political (and legal) forces, Economic forces, Sociocultural forces, and Technological forces. These are known as PEST factors.

Political Factors. The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. You must consider issues such as: 1. 2. 3. 4. 5. 6. 7. 1.How stable is the political environment? 2.Will government policy influence laws that regulate or tax your business? 3.What is the government's position on marketing ethics? What is the government's policy on the economy? Does the government have a view on culture and religion? Is the government involved in trading agreements such as EU, NAFTA, ASEAN, or others? Economic Factors.

Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. You need to look at: 1. Interest rates. 2. The level of inflation Employment level per capita.

It is very important that such factors are considered. auctions. Technology is vital for competitive advantage.g. books via the Internet.What are attitudes to foreign products and services? 3. and is a major driver of globalization. The social and cultural influences on business vary from country to country.g.Does language impact upon the diffusion of products onto markets? 4. and so on. Does technology allow for products and services to be made more cheaply and to a better standard of quality? 1.Do the population have a strong/weak opinion on green issues? Technological Factors. 1. Customer Relationship Management (CRM). 2. 5. 3. etc? . 4.How long are the population living? Are the older generations wealthy? 7.What are the roles of men and women within society? 6. banners.Does technology offer companies a new way to communicate with consumers e. Consider the following points: 1. etc? 3. 4. Factors include: 1. 7. 3. Sociocultural Factors. etc? 2. flight tickets.How is distribution changed by new technologies e. new generation mobile telephones.What is the dominant religion? 2.How much time do consumers have for leisure? 5. 2.3. Long-term prospects for the economy Gross Domestic Product (GDP) per capita.Do the technologies offer consumers and businesses more innovative products and services such as Internet banking. 6.

g. Chinese 26%. Ethnic groups: Malay and other indigenous 58%. defense. Sabah . has made possible the relaxation of most of the capital controls imposed by the government in 1998 to counter the impact of the Asian financial crisis.gov/ October 2000 Consider the following ODCI information and conduct a PEST analysis.PEST Analysis .hereditary rulers in all but Melaka. where governors are appointed by the Malaysian Government. While Malaysia's immediate economic horizon looks bright. Sarawak . internal security. Sarawak. particularly those dealing with competitiveness and high corporate debt. Source: www. to $31 billion at yearend 1999. and other powers delegated to federal government. Government and private forecasters expect Malaysia to continue this trend in 2000. GDP grew 5%. and other powers delegated to federal government. its long-term prospects are clouded by the lack of reforms in the corporate sector.holds 28 seats in House of Representatives. predicting GDP to grow another 5% to 6%.Exercise. nominally headed by the paramount ruler and a bicameral Parliament consisting of a nonelected upper house and an elected lower house. This stable macroeconomic environment. with foreign affairs.. internal security. responding to a dynamic export sector. Economy . Sabah. Sabah and Sarawak retain certain constitutional prerogatives (e. in which both inflation and unemployment stand at 3% or less. Federation of Malaysia (Malaya. Indian 7%. defense. and Singapore) formed 9 July 1963 (Singapore left the federation on 9 August 1965). . Sabah. Government type: constitutional monarchy note: Malaya (what is now Peninsular Malaysia) formed 31 August 1957. and Sarawak. Penang. the right to maintain their own immigration controls). which grew over 10% and fiscal stimulus from higher government spending. Peninsular Malaysian states . The large export surplus has enabled the country to build up its already substantial financial reserves. others 9%. powers of state governments are limited by the federal constitution.odci.holds 20 seats in House of Representatives. with foreign affairs.overview: Malaysia made a quick economic recovery in 1999 from its worst recession since independence in 1957. under terms of the federation.

000 GRT or over) totaling 5.1 million (1997) Television broadcast stations: 27 (plus 15 high-power repeaters) (1999) Televisions: 3.) Airports: 115 (1999 est.706 GRT/7. Christianity. Hong Kong.2 Intelsat (1 Indian Ocean and 1 Pacific Ocean).523 m: 6 under 914 m: 6 (1999 est. note . container 55. Tamil.4 million (1998) Telephones . . Mandarin. shortwave 5 (1999) Radios: 9.) Airports with paved runways: total: 32 over 3. Hokkien.). Hakka. Languages: Bahasa Melayu (official). Sikhism. liquified gas 19. note . Sarawak. Hainan. Shamanism is practiced in East Malaysia. in East Malaysia several indigenous languages are spoken.17 million (1998) Telephone system: international service good domestic: good intercity service provided on Peninsular Malaysia mainly by microwave radio relay.524 to 2. satellite earth stations . Chinese dialects (Cantonese. cargo 119. Buddhism. Foochow). specialized tanker 1.Religions: Islam. domestic satellite system with 2 earth stations international: submarine cables to India. Literacy: definition: age 15 and over can read and write total population: 83. Thai. Hinduism. passenger 2. refrigerated cargo 1. the largest of which are Iban and Kadazan.047 m: 4 1.1% female: 78. livestock carrier 1. and Singapore. Malayalam.5% male: 89.1% (1995 est.6 million (1997) Internet Service Providers (ISPs): 8 (1999) Merchant marine: total: 361 ships (1. Daoism.437 m: 11 914 to 1. Telephones: main lines in use: 4. chemical tanker 34. FM 31 (plus 13 repeater stations). roll-on/roll-off 6. petroleum tanker 57.mobile cellular: 2. Panjabi.915 DWT ships by type: bulk 61.393. Sabah.in addition.).PEST Analysis Political Factors.in addition. adequate intercity microwave radio relay network between Sabah and Sarawak via Brunei.047 m: 5 2. vehicle carrier 5 (1999 est.438 to 3.Malaysia .000. English. Telugu. A fairly new country formed in 1957 (Malaysia) and 1963 (Malay. and Singapore). Answer . y y Controls on immigration. Radio broadcast stations: AM 56.

Economic Factors. Low rates of literacy among women. Favorable prediction for growth in the economy. Recovering from a very severe recession. Very low inflation and unemployment. A variety of TV and radio stations. Lack of corporate reform (high corporate debt and competition) Socio-cultural Factors. Mixture of Chinese. Technological. Indian. and Malaysian. Good national and international lines.y y y y y y y y y y y y y y y Parliament and hereditary rulers. Variety of religions. High government spending. . ISPs and airports available.

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