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BUSINESS DECISION MAKING ADMN2167 PEST

BUSINESS DECISION MAKING ADMN2167 PEST. Professor: Bob Carpenter. What is PEST analysis?.

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BUSINESS DECISION MAKING ADMN2167 PEST

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  1. BUSINESS DECISION MAKINGADMN2167PEST • Professor: Bob Carpenter

  2. What is PEST analysis? • The PEST analysis is a useful tool for understanding and predicting market growth or decline, and as such the position, potential and direction for a business. A PEST analysis is a business measurement tool. • It is a scan of the external macro-environment in which the firm operates.

  3. What is PEST analysis? • PEST is an acronym for Political, Economic, Social and Technological factors, which are used to assess the market for a business or organizational unit. • The PEST acronym is sometimes shown as STEP, which represents the same factors.

  4. Different Acronyms PEST is also extended to seven or even more factors, by adding Ecological (or Environmental), Legislative (or Legal), Industry Analysis, and Demographic, which may produce the following models. (STEER, STEEP, DESTEP, STEP, PESTLE, PESTE, STEEPLE, STEEPLED PESTELI ) They are all variations of the same basic model PEST

  5. Political Factors Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include: • tax policy • employment laws • environmental regulations • trade restrictions and tariffs • political stability

  6. Economic Factors Economic factors affect the purchasing power of potential customers and the firm's cost of capital. The following are examples of factors in the macro-economy: • economic growth • interest rates • exchange rates • inflation rate

  7. Social Factors Social factors include the demographic and cultural aspects of the external macro-environment. These factors affect customer needs and the size of potential markets. Some social factors include: • health consciousness • population growth rate • age distribution • career attitudes • emphasis on safety

  8. Technological Factors Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include: • R&D activity • automation • technology incentives • rate of technological change

  9. The movie …. PEST analysis

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