Political, economic, social and technological factors applied to a company are a
ID: 374321 • Letter: P
Question
Political, economic, social and technological factors applied to a company are also known as PEST Analysis. PEST is an acronym for Political, Economic, Social and Technological. This analysis is used to assess the four external factors in relation to business circumstances. This includes looking at exchange rates, cultural norms, upcoming elections, population growth rates, and many more. If used correctly, PEST analysis can act as a tremendously efficient tool in business. How these factors might be applied to a company is detailed below:
Political factors: The government set of laws and lawful aspects are measured in terms of their knack to affect the business environment and trade markets. The main issues addressed in this section include political stability, tax guidelines, trade regulations, safety regulations, and employment laws.
Economic factors: The business examines the economic issues that are bound to have an impact on the company. This would include factors like price increases, interest rates, economic growth, the unemployment rate and policies followed in the country.
Social factors: Businesses can analyze the socio-economic environment of its market via elements like customer demographics, cultural limitations, lifestyle attitude, and education through social factors. With these, a business can understand how consumer needs are shaped and what brings them to the market for a purchase.
Technological factors: Businesses access how technology can impact the prologue of a product or service into a marketplace. These factors include technological advancements, lifecycle of technologies, the role of the Internet, and the spending on technology research by the government.