As we know in today’s business oriented era, every enterprise owner aspires to excel in his organization in terms of achieving objectives, meeting deadlines, market analysis, organizational structure & strategies, quality work, financials and building healthy professional relations between employees as well as his patron. As an entrepreneur, you can try to predict how your products or we can say services will resonate with the public.
On that account, “The P.E.S.T Analysis”, the acronym for political, economic, socio-cultural and technological analysis, is one and widely used tool amongst the various techniques to measure the graph of your business performance.
Have you ever noted the factors on which the business growth relies?
Well, according to me, the political, economic, social and technological environments are the major factors that determine one’s commercial activity status. The P.E.S.T approach is carried out to speculate the forthcoming opportunities and threats. It makes it easier to understand and adapt to your future business environment and helps you to shape what you are doing so that one can work with that change rather than against it.
What constitutes the above four factors? Make a wild guess!
Political factors comprise the tariffs, tax policies, labor law, etc. The political environment analysis is done to check what politics is doing to the business world. Apart from taxes, government regulations and legal issues affect an organization’s ability to be profitable and successful, and this parameter looks at how that can happen. Issues that must be considered include tax guidelines, copyright, and property law enforcement policy, employment laws and safety regulations. Organizations should also consider their federal and local power structure & discuss how anticipated shifts in power could affect their business.
Economic factors consider rates of interest, cost of capital, exchange rates, inflation rates, and economic growth. This analytic parameter examines out the economic issues that can play a crucial role to determine your business’s success rate. One should look at interest rates, unemployment, gross domestic product, exchange inflation, rise & fall of the middle class and credit availability.
After all, “this is what your pocketbook/wallet lives on every day”…
Social factors comprise safety, population growth rate, demographics, demand of a company’s products, health, age distribution, cultural aspects, and job market trends. To understand how consumer needs are shaped and what brings them to the market for a purchase socioeconomic environment is checked of the given industry’s market. The very significant change is the growing popularity of social media. Social networking portals such as eCommerce sites have become very popular almost among every age group. All people have grown used to mobile phones. So, one should look at what cultural and social changes are taking place.
Technologic factors comprise R&D activity, minimum efficient production level and the rate of technological change. The technology chosen plays a huge part in business. Particular items that need to be scrutinized include, but are not limited to, the funds which government is spending on technological research, how changes to it may play out and the impact of potential information technology changes.
A certain marketplace can have tough times adjusting hence it’s conspicuous to survey technologies that are being used by an organization in each aspect. The life cycle of current technology needs to be examined too.
At this point, I’m going to hand over this analysis to you all with the hope that you guys will think and act how well you can organize and evaluate your work areas.
So, how are you evaluating your marketing fashion? Are you too following an analytical technique?
Embark on your business journey by taking the first proactive step.