Chapter 3.1: Situational Analysis
The PEST analysis is a useful tool for understanding market growth or decline, and as such the position, potential and direction for a business. A PEST analysis is a business measurement tool. PEST is an acronym for Political, Economic, Social and Technological factors, which are used to assess the market for a business or organizational unit. In brief the PEST analysis describes a framework of macro-environmental scanning component of strategic management. Royal Platinum Travel PEST analysis is illustrated in the table below Fig 3.1 POLITICAL FACTORS
TECHNOLOGICAL FACTORS Trade restrictions
Population growth rate
Research and development activity Tax policy
Technological Shifts Environmental laws
Automation Labour laws
The table above shows Royal Platinum Travel’s PEST analysis even though some of the factors were not stated and can be addressed in a PESTEL analysis where the extra “E” stands for Environmental factors such as weather and climate and these have affected Royal Platinum Travel in divisions such as Sales since unanticipated rains hinder travelling to desired destinations which could have been successfully held by the division. “L” stands for legal and these are Government driven laws which may restrain a company from engaging in all business it is capable of since there will be strict and tough requirements. Employment laws have affected Royal Platinum Travel in some departments with growth potential.
This refers to the level or degree in which government intervenes in the economy. These factors include political instability and this is mainly of unit government. This negatively...
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