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PEST Analysis

BY: Mahmood Anwar

Aazir Hammad

Environments

Internal:various departments

Micro: suppliers, marketing

intermediaries

Macro: competitive, demographic, economic, natural,

technological,

political, and cultural

Environments • Internal :various departments • Micro : suppliers, marketing intermediaries • Macro : competitive, demographic,
Major Forces in the Company’s Macroenvironment 3

Major Forces in the Company’s Macroenvironment

Definition

  • A scan of the external macro-environment by the firm’s management, in which the firm operates can be expressed in terms of the following factors:

    • Political

    • Economic

    • Social

    • Technological

  • PEST analysis 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 PEST analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction for a business so that management can make strategies.

  • The acronym PEST is used to describe a framework for the analysis of these macro-environmental factors. A PEST analysis fits into an overall environment scan in following diagram:

Environmental Scan Internal Analysis Micro-Environment

 The acronym PEST is used to describe a framework for the analysis of these macro-environmental
 The acronym PEST is used to describe a framework for the analysis of these macro-environmental

External Analysis Macro-Environment

P.E.S.T

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Political Factors

Govt. regulations and legal issues and define both formal and Informal rules under which the firm
Govt. regulations and legal issues and define both formal and
Informal rules under which the firm must operate
Trade
Political
Tax
Employment
Environmental
Restrictions
Stability
Policy
Laws
Regulations
&
Tariffs
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Economic Environment

  • Economic factors affect the purchasing power of potential customer and the firm’s cost of capital.

Economic Growth Interest rates Economic Factors Exchange rates
Economic Growth
Interest rates
Economic Factors
Exchange rates

Social Factors

It include the demographic and cultural aspects of the external macro-environment. These factors affect customer needs and the size of potential market. Some social factors

includes:

Health consciousness Population growth rate Age distribution Career attitudes Emphasis on safety

Technological Factors

  • Technological factors can low barriers to entry, reduce minimum efficient production levels and influence outsourcing decisions.

Some technological factors include:

R&D activities Automation Technology incentives Rate of technological change

Environmental Scanning

Determine Environmental Areas That Need to Be Monitored Determine How the Information Will Be Collected Implement
Determine Environmental Areas That Need
to Be Monitored
Determine How the Information Will Be Collected
Implement the Data Collection Plan
Analyze and Use the Data in Planning

Thank You Any Questions????????