The PEST Analysis for PC market in U.K.

The PEST Analysis for PC market in UK

Changes in interest rates, exchange rates, technology and the law are all external factors, which can affect a firm. These factors can affect the firms’ costs or the market as a whole. Changes that take place in the external environment can be evaluated and analysed by using a PEST analysis.

To analyse the firms’ external environment, the following headings are used;

Political, Economical, Social, and Technological.

A PEST analysis has been used to analyse our firm in the PC market,

2.2.1 Political

The change in government policy will have a big impact on the PC market; for example, recent proposals to extend membership of the EU will lead easier access into the market for UK firms.

This part of the PEST analysis deals with the political factors affecting the external environment of the PC market.

Government policies would have major impact on the PC market these are as follows;

The legislation that has recently been changed is the law of minimum wage. This may have a great impact on our firm in the PC market. In the last 2 years, the minimum wage has gone up from £3.50 to £4.10 and there have been rumours that it should go up in the next year or so. Trade unions say it should be raised by another 10p but it needs to be higher than what it is now. This would be good overall but it would also be good for our firm, as consumers’ income has increased, therefore they have more money to spend and may feel that now they can afford to buy a computer.

The government has tried to improve the skill and knowledge of IT in the UK. Due to this effect, the population in the UK may feel more skilled in using PCs, and therefore this impact may increases the use of PCs at home, leading to a greater demand as consumers feel more confident in using them.

The government may decide to allocate more money to schools or a proposed statue stating, “schools need to invest in more or new up-dated computers” could have an effect on our firm or the PC market. As it is a law, schools have to invest in the computer, therefore the demand for computers will go up. In the recent budget £800 million pounds has been allocated to schools, therefore they may use this to improve resources in schools, along with repairs and teacher recruitment.

The general election could also affect our firm or the PC market. Different p...

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...nt were to put up interest rates, our consumers will be less likely to spend. Therefore we could change our pricing strategy for a short period of time so that consumers feel that they will not be able to get this ‘bargain’ again therefore they will buy. We could use promotional pricing, which is lowering our prices for a short term to increase sales and gain market share.

 We need to have a range of supplier who can supply us with a range of different products with the most up to date technology this would attract more consumers.

 In the future our firm could offer, the facility to make computers to consumers tastes, needs and budget. This is what the Gate Way Computer Company, which was very successful.

 Our firm could offer an after sales service. This would encourage consumers to come back to us. E.g. AOL offered a service where, if consumers had any problems they could just ring them up and they would sort it out with no additional costs. We could also offer a service where if consumers don’t know how to use a computer or an Internet package, we would offer them our training programme. We would only offer this if they buy from us.