Explore BrainMass

Explore BrainMass

    PEST Analysis

    The PEST analysis framework looks at how factors of change that are external to a business contribute to a business's overall risk. The factors looked at are external factors that lay outside of the control of the organization itself, broken into four categories: political, economic, social and technological. Because these factors affect the organization's risk, they are important to consider when evaluating the attractiveness of the industry the business operates in. Porter's five forces model also looks at the attractiveness of an industry (focusing more on an industry's potential profitability, rather than level of risk). As a result, a PEST analysis and Porter's five forces are often used in conjunction.

    Political Change and Intervention: According to PWC, political risk involves "any political change that alters the expected outcome and value of a given economic action by changing the probability of achieving business objectives."1 While political decision making is fairly reliable in western countries, as the world becomes more globalized, businesses face increasing risks associated with political stability in developing and undemocratic countries. For example, what if your supply chain stems from a country whose leaders decide to go to war? That being said, political risk exists everywhere, even in the western world, in areas such as tax policy, labour law, environmental regulations, trade restrictions and tariffs.

    Dependency on the Economic Cycle: Most businesses are dependent, in part, on the economic cycle. That means that during economic growth, businesses will do well, and in a recession, many businesses have a more difficult time. Some businesses experience the opposite. For example, in economics goods are classified as "inferior goods" if sales of these goods go up when purchasing power goes down. Staple foods like Kraft Dinner and hot dogs are inferior goods. If a family is concerned about its purchasing power today, or in the future, they are more likely to by Kraft Dinner, instead of steak, for the table - not good for the butcher! Government fiscal and economic policy also helps determine economic risk.

    Social Demographic, Attitudinal, and Religious Change: Social risk factors include cultural factors and attitudes. For example, career attitudes about work-life balance are becoming increasingly relevant to businesses. Similarly, general attitudes, for example, about the acceptability of smoking have led to reduced smoking rates (and health side-effects) in adults. Social risk factors also include related demographic factors such as population age distribution and growth rate. For example, an aging western population is leading to a boom in the health care industry.

    Technological Vulnerability: We live in a world of rapidly changing technology and resulting capabilities. Harnessing new technologies may give a firm a competitive advantage. At the same time, a failure to adopt a new technology may cause a business to fall behind its competitors.
    A PEST analysis may also include legal and environmental factors (such as consumer protection laws or the affects of climate change).

     

    Reference:

    1. Eurasia Group and PricewaterhouseCoopers, “Integrating Political Risk Into Enterprise Risk Management”. Retrieved from http://www.pwc.com/Extweb/onlineforms.nsf/docid/F44B471C9D848314852570FF0069BBCA?opendocument

    © BrainMass Inc. brainmass.com March 19, 2024, 7:37 am ad1c9bdddf

    BrainMass Solutions Available for Instant Download

    Strategic Analysis of Parcelforce Worldwide

    Address the performance of the company, critically analyse the strategic challenges jeopardising the profits and growth of Parcelforce Worldwide by using the spotlight of various frameworks such as PESTEL analysis, VRIO analysis, Porter's Five Forces model, Competitive Advantage, aided by available resources such as data on mark

    Assignment: "Analysis of the General Environment"

    Explain how each of these factors affects the Automobile industry and support your claims with data and anecdotes, when necessary. Please list the items that you discuss under their corresponding segment (see below for a template). Please note that you need to do some research online in order to find information about your indus

    Josh Hardy and Chimerix, Inc case study

    Where to find it: The following two articles: The CEO who saved a life and lost his job Chimerix CEO out in wake of Josh Hardy compassionate use media frenzy Please read the above articles carefully and consider doing some online research about the case before starting to work on the assignments. Please answer the fol

    PEST analysis: Apple

    Based on a public company, help me to comprehend PEST analysis by runing a PEST analsysis on this company. Based on the analysis, what strategic initiative would you recomment and why?

    Caterpillar Inc -PEST Analysis

    Perform a PEST analysis of Caterpillar INC (the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives.)

    Adjusting Entries - Greensboro Pest Control

    Greensboro Pest Control has the following balances in selected accounts on December 31, 2012. Accounts Receivable $ 0 Accumulated Depreciation - Equipment 0 Equipment 6,650 Interest Payable 0 Notes Payable

    Best Web Sites for Cross-Disciplinary Business Topics

    Business students need to do research that includes multi or cross disciplinary topics. While there are many resources on the Internet, when students search the Internet for information they often spend too much time before good information. What are the best sites for doing research? These sites should contain only sites that h

    Strategic Management: Using the BCG Matrix

    You have been given the BCG matrix on two divisions of your company - the appliance and electronics divisions. It appears that the electronics division can be located in the upper right quadrant of the matrix and the appliance division appears in the lower left quadrant of the matrix. You need to offer a strategic recommendation

    Tools Needed for Conducting a Strategic Marketing Plan

    Write 800-1000 words that respond to the following questions with your thoughts, ideas, and comments. This will be the foundation for future discussions by your classmates. Be substantive and clear, and use examples to reinforce your ideas: As you close your weekly meeting with Deborah, she says, "There are some very good ide

    PESTLE and SWOT

    How do you use PESTLE and SWOT? What is Saudi Arabia's PESTLE Position?

    Small Landscaping Business Plan

    Descriptive Business Plan. My business plan is about a landscaping business and should include the following elements (where applicable): 1. Information about products or services, including how and where they are produced, production techniques, quality control, customer service, inventory control, and product developmen

    Self-Reference Criterion's Influence on PEST Analysis

    Executives of an American corporation intend to enter the Indian market. How might the self-reference criterion influence the American executives' PEST analysis of India? What can the American executives do to avoid the mistake of self-reference criterion?

    TRIZ 40 principles.

    Please provide me an example of a today real life example using one of the Triz principles. I do not get it because anyone with common sense evaluates problems and looks for the best solutions so our outcomes can be most rewarding.

    Developing a Marketing Plan

    I need help getting started on this assignment. Please help with sources, outline or flow of information in the paper, and main points that should be addressed. Thank you. General Electric is launching a self cleaning refrigerator. The plan is to use upscale distributors for the initial launch and to target middle class fa

    Charter school: static budget, breakeven, viable, benefits

    This case has two parts. Part I. Let's try to apply our knowledge of variable costing and review a sample budget for a charter school. This budget is prepared assuming three levels of student enrollment (66, 100 and 120). Revenue and expenses projections are shown in the budget. Operating assumptions are shown in "Schedule

    Analyzing Markets with Envioronmental Scan

    I am looking for an example to follow so I can do one of my own. The example doesn't need to follow the usual conventions of a case study type paper. I need to do an environmental analysis and provide a sentence or two explaining 2 sources in a PEST analysis with 2 sources for each variable and 2 sources for each of Porter's Fo

    Expansion of a Restaurant Strategic Plan

    Do not go step by step thru a strategic plan - The focus is on how to apply the plan to a small business environment. Strategic Management Chalenges Entrepreneurial standpoint and use of restaurant Zeytin as a model and how we would use a strategic planing model to help decide what market to expand into (open another store i

    External Environment Analysis - Coca Cola

    Complete an external analysis for The Coca-Cola Company, using Porter's 5-Forces Model and a PEST Analysis. Ultimately, this analysis will lead to some conclusions about opportunities and threats facing the company (the first part of the SWOT analysis). What is the scope of the analysis (entire company, selected business di

    Enhancing the Marketing Plan

    Enhancing the Marketing Plan This activity is part of your marketing plan. Prepare a 4-5 page report, addressing the following: 1.Discuss the company's competitors, and the strengths and weaknesses of each. 2.Discuss how you plan to differentiate your company from the closest competitor. 3.Discuss the company's i

    Pfizer Company acquisition of EMS Pharma in Brazil

    The focus of this paper is making strategic recommendations for foreign market entry into Brazil. This project involves developing a proposal for the Pfizer Company to acquire the target company EMS Pharma in Brazil. Remember, you are proposing a new acquisition that has not so far been undertaken by your client company. Include

    External Environment Analysis for Southwest Airlines

    Several of the background readings referred to gathering data to support the external analysis. Be sure to review those readings carefully - especially the Comerford and Callaghan chapter, so you know what kinds of data are used when conducting an external analysis. The purpose of this SLP is to develop the component of our stra

    Strategic Management for Beer Industry

    Discuss the key macro-environmental forces (Political-Legal, Economic, Social, Technological) that affect the beer industry today. Which ones pose the greatest threats? Why? See the attached file.

    Environmental Factors that affect global and domestic marketing decisions

    Select an organization with which you are familiar that conducts both domestic and global marketing. Identify the environmental factors that affect global and domestic marketing decisions. Address the following as they relate to the organization's marketing decisions: Analyze the influence of global economic interdependen

    MARKETING

    Explain why firms minimize losses when marginal revenue product is equal to marginal resource cost. 101. After conducting STP analysis for her custom auto parts store and developing strategies for each of the 4 Ps, Brenda now has to make _____________ decisions. A. competitive response B. resource allocation C. product li

    Evaluate Planning Functions of Tyco Management

    Evaluate the planning functions of management for Tyco. Analyze the influence of legal issues, ethics, and corporate social responsibility. Discuss three factors that influence the company's strategic tactical, operational and contingency.