On the flip side though, a global rise in internet connectivity might mean less interest in traditional communication means, which is a negative consequence for some — telephone service providers will have to change their offerings to stay relevant, while paper-and-ink printing companies might receive less business.
If you have come across any other weird and wonderful extended interpretations of PEST I'd love to see them. For example, Microsoft experiences rising competitive rivalry with Asian firms.
Economic factors include economic growthinterest ratesexchange ratesinflation rate. Other business-related factors that might be considered in an environmental analysis include Competition, Demographics, Ecological, Geographical, Historical, Organizational, and Temporal schedule.
Environmental factors include ecological and environmental aspects such as weather, climate, and climate changewhich may especially affect industries such as tourism, farming, and insurance.
Political Factors Political factors relates to the pressures and opportunities brought by political institutions and to what degree the government policies impact the business. On the other hand, the stable demand for high quality customer service creates opportunities for the company to improve its customer support activities.
Martyn Richard Jones, while consulting at Groupe Bulldeveloped an augmented five forces model in Scotland in Furthermore, companies may change various management strategies to adapt to social trends caused from this such as recruiting older workers.
Additionally, factors that are more likely to change in the future or more relevant to a given company will carry greater importance. Perhaps what is more important than the superficial classification of these factors is the firm's awareness of them and its development of a strategic plan to use them to its advantage.
Got other good examples of technological factors which affect business. Microsoft faces the following ecological external factors in its remote or macro-environment: Other factors for the various offshoots include: Stick with PEST - nearly everyone else does.
It is based on Porter's Framework and includes Government national and regional as well as pressure groups as the notional 6th force. Legal - What current and impending legislation that will affect the business. Political factors may also include goods and services which the government aims to provide or be provided merit goods and those that the government does not want to be provided demerit goods or merit bads.
Using game theorythey added the concept of complementors also called "the 6th force" to try to explain the reasoning behind strategic alliances. Furthermore, governments have a high impact on the healtheducationand infrastructure of a nation.
Technological - What technological changes that may affect the business. In the case of Microsoft, these external factors reflect the performance of the computer hardware and software market.
The four dimensions are an extension of a basic two heading list of pro's and con's free pro's and con's template here. A company may also wish to divide factors into geographical relevance, such as local, national, and global.
Hence why the basic PEST model is often the most powerful - it puts more pressure on strategic appreciation and analysis than a longer list of headings. Porter's Five Forces Framework is a tool for analyzing competition of a business.
It draws from industrial organization (IO) economics to derive five forces that determine the competitive intensity and, therefore, the attractiveness (or lack of it) of an industry in terms of its profitability.
An "unattractive" industry is one in which the effect of these five forces reduces overall profitability. PEST analysis (political, technology incentives and the rate of technological change. These can determine barriers to entry, minimum efficient production level and influence the outsourcing decisions.
The model's factors will vary in importance to a given company based on its industry. Financial Analysis Certification Course The Financial Analysis Prodegree, in association with EY as the Knowledge Provider, is a hour skill-building course covering accounting, financial modelling, valuation and equity research.
As identified in this external analysis through the PESTEL/PESTLE Analysis model, the opportunities in the industry environment should be adequate for Microsoft to continue as one of the major firms in the global computer technology industry. While the tech industry is the largest employer of technology professionals, with 44 percent of its workforce meeting this criteria, the majority of technology professionals work in other industry sectors, such as healthcare, finance, media, or government.
Political, Economical, Social & Technological (PEST) Analysis of IT Sector in India by Nitesh Singh Patel, IMT Nagpur.Pest analysis technology industry