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,
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...
... middle of paper ...
...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.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- Introduction India is world’s second most populated country with over 1.2 billion people. Since its independence from British rule in 1947, the country has been more or less been a stable democracy. Until 1991 Indian governments imposed economic austerity and its markets were comparatively closed to the world. Economic reforms in 1991 brought about a change which made India an attractive and huge market for multinational corporations from all over the world (Joshi 8). Retail industry within a globalized world is one of the thriving and profitable sectors.... [tags: glabal issues, population, india]
1319 words (3.8 pages)
- The PEST ANALYSIS is a helpful apparatus for comprehension market development or decay, and as being what is indicated the position, potential and course for a business. A PEST examination is a business estimation instrument. Nuisance is an acronym for Political, Economic, Social and Technological variables, which are utilized to survey the business for a business or authoritative unit. The PEST investigation headings are a system for surveying a circumstance, and can likewise, in the same way as SWOT examination, and Porter 's Five Forces model, be utilized to audit a procedure or position, heading of an organization, an advertising recommendation, or thought.... [tags: Petroleum, Petroleum industry, PEST analysis]
1128 words (3.2 pages)
- Table of Contents 1.2 – Executive Summary....................................................................................................... 3 1.3 – CHINA: An Introduction ..............................................................................................4 2.0 – Environmental Analysis: Chinese Market....................................................................4 2.1 – Political Environment, Rules & Regulations .................................................................. [tags: chinese market]
1648 words (4.7 pages)
- There are many analysis used in the business analysis, such as SWOT analysis, PORTER’S 5 forces, value chain and many else. It is also for the PEST analysis which is one of the business analyses. The PEST analysis is a simple and effective tool used in situation analysis to identify in terms of external forces that might affect an organization. These forces can create both opportunities and threats for an organization. Therefore, the aim of doing PEST is to: • Find out the current external factors affecting an organization; • Identify the external factors that may change in the future; • To exploit the changes (opportunities) or defend against them (threats) better than competitors would do.... [tags: new market, value chain]
729 words (2.1 pages)
- Environmental analysis is extremely beneficial when a company is considering to do business in an international market economy. It is important to analyse the "environments" of international business marketing before entering a new economy. The central areas of consideration include a country‘s political, legal, economic, technological, and cultural aspects. These five environments form the common acronym, "PEST-C." The term, PEST-C, is widely used in today's business world. Each environment within the acronym must be considered individually to help develop an understanding of the country.... [tags: What is PEST Analysis]
2135 words (6.1 pages)
- In my research, I was asked to find out why it is best for large organizations to use both PEST and Porter analysis in understanding their particular external environment. I discovered that these tools identify external environmental factors that are subject to change in the marketplace or particular business sector. As the landscape of business changes opportunities or threats emerge and the PEST and Porter analysis tools help exploit, the changes will allow companies to either recognize and adapt or lose to competitors.... [tags: Strategic management, Management]
1134 words (3.2 pages)
- PEST Analysis The PEST analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction for a business. A PEST analysis is a business measurement tool. PEST is an acronym for Political, Economic, Social and Technological factors, which are used to assess the market for a business or organizational unit. Political The political area has a huge influence upon the regulation of a business and the spending power of consumers and other businesses.... [tags: Papers]
510 words (1.5 pages)
- Introduction This report will provide a market target analysis of Hanndia Pest Control Service Pty Ltd. Hanndia Pest Control Services, specialise in working with real estate agencies to manage white ant infestation of rental properties, by applying an environmentally friendly fumigation barrier. The main office is located in the Brisbane City council suburb of Calamvale, South Eastern Queensland, with a total of 20 employees. This includes the manager, field officers and administrative support. The purpose of this report is to identify the market target for Hanndia Pest Control Services.... [tags: Business Analysis Market]
1764 words (5 pages)
- PEST Analysis Strategic analyses can be either internal or external. Internal analyses take a look at firms on an individual basis to determine their abilities, while external analyses look at the industry or overall business environment. The PEST analysis evaluates the environment surrounding an industry. It looks at political, economic, social, and technological factors that are current or potential future drivers that shape the landscape. The tool is useful for both strategy and market research and will provide a broad framework for Casa San Ysidro to consider in their future decisions.... [tags: Internal Revenue Service]
1071 words (3.1 pages)
- In the business world strategic positioning has become unavoidable endeavor as businesses look for every means of enhancing their competitive advantage. Given the nature of the business environment, organizations are forced to exploit various analysis models to understand the external environment in which they operate in. PEST (Political, Economic, Social and Technological) analysis have been utilized by organizations across the globe to determine or predict future trends in business as well as to make preemptive measures to avoid running into losses.... [tags: business, mobile phones, economy]
1014 words (2.9 pages)