PEST Analysis Name Grade Course Date The term organisation is referred to as a forum of collective efforts of group of people to achieve a goal. The people associated with the organisation are known as its stakeholders. They are directly or indirectly influenced with the activities of an organisation…
The external environment consists of four main factors, political, economic, social and technological (Dubrin, 2012). These factors are collectively known as PEST. These factors appear as opportunities for the organisation while it is also possible that at certain point in time, they pose threats. The organisations need to keep a constant eye upon these four factors to stay profitable and at times for core survival. The paper discusses about these factors and their influences upon the organisations policies, functions and profitability. Political Aspects of External Environment The political aspect of external environment is related to the government laws, legislations, rules, polices and other international principles that are enforced from time to time. These factors supersede all local and organisational doctrines and every organisation is bound to obey them for its existence (D’Anieri, 2009). The common example of this factor is tariff guidelines, tax rates, employment laws (Collins, 2010) and trade quotas. Every organisation needs to cater for all these points to comply with the regulation. The non-compliance poses the most serious threat and organisations take years to settle the law suits filed against them because of violation of laws. Many government policies are related to foreign direct investment and impose certain restrictions on the ownership rights of the business. Particularly in the Gulf States, ownership of real-estate resources by foreigners is banned. It creates insecurity for the business concerns while they plan to invest in these countries. Another point of concern in this regard is about the balance sheet of the organisation that has strong financial position but cannot own the land and building which automatically decreases their assets side. In the present business era, globalization has removed many barriers and the free movement of capital, goods and labour has become a practice. The employment laws are relaxed about hiring expatriates and it is increasing the level of diversity in the organisation (Barak, 2011). There are certain Acts which ensure formal protection of employees’ rights. This situation has raised many challenges to the organisations. Ensuring satisfaction of a diverse workforce on the grounds of equitable treatment is not child’s play. Every employee has different needs and it is no surprise that one’s interest harms the benefit of others. The organisations have to ensure that a win-win condition is met all the time (Vent, 2009). There are regulations related to minimum wage which affect the organisations cost structure and in turn the profit margins. There are certain guidelines about employment quota of local and foreign employees, it forces organisations to compromise over the talented pool and hire the one who may not be at par in educational and professional requirements. The political aspects are related with the performance of stock exchange as well. Stock exchange is the most volatile sector of the economy which is influenced by every news and event in any corner of the world. The riots and political stability in one country negatively affects the market value of the companies which belong to that country no matter they are registered with some international stock exchange like London Stock Exchange or New York Stock Exchange. Economic Aspects of External Environment The affect of economic aspects in the external environment is as evident as the ...
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With the advent of modern era came the chemicals extremely harmful to both man and his environment. A few of them found their way into the agriculture and food industry to be used extensively in ways harmful to health. Artificial fertilizers are employed to help grow crops in less amount of time, to increase the yield and so on.
One of these is the use of political, economic, social, technological, environmental and legal (PESTEL) analysis. British Petroleum (BP) plc is one of the world’s giant petrochemical companies. The company which was “formed by the 1998 merger of British Petroleum Company and Amoco Corporation, is the third largest oil company in the world” (Funding Universe, 2009).
There can also be certain external factors of the surrounding economy that have an impact of the firm’s activities. These external influences can belong to the political, economic, social, technological, environmental and legal domain. This paper has attempted to evaluate the impact of these external factors on the growth and development of the insurance company Aviva plc.
The fact that the company is ambitious on reaching a large market, which is not only situated in its parent country (United States), it must use PEST to formulate strategies that are fundamental in maintaining as well as grow its customer base. As a supreme brand, Nike must seek to establish measures that will maintain its reputation and positive image in the global limelight.
Economies, particularly emerging economies like China and India, give particular focus to the development of banking sector because their stringent banking policies assisted them to survive the recent global recession successfully. This paper will perform a PEST analysis of Bank Muscat, a commercial bank of the Oman, and critically analyze the findings to provide the bank with potential policy recommendations.
Deodorant market is greatly influenced by some political factors that either contributes directly or indirectly to the overall sales of deodorants in the market. The import and export regulations greatly affect deodorant market in that these cosmetics are charged very high taxes when they are being imported or exported.
Unlike all other recent entrants in the UK telecommunications industry, BT is restricted by a range of regulations that were aimed at fostering competition. Now that this market has already witnessed years of competition, regulations that
The author states that Bristol University is ranked as one of the best universities in the world alongside Yale and Harvard. For instance, the university was listed in the top 100 for medicine and biology alongside Princeton, University of Hong Kong, and Harvard. This has boosted Bristol’s positive reputation in the external community.
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