PEST stands for the analysis of the external factors which is beneficial when conducting research before beginning a new project or to help conduct market research. These factors are: * Political – Laws, global issues, legislation and regulations which may have an effect on your business either immediately or in the future. * Economic – Taxes, interest rates, inflation, the stock markets and consumer confidence all need to be taken into account. * Social – The changes in lifestyle and buying trends, media, major events, ethics, advertising and publicity factors. * Technological – Innovations, access to technology, licensing and patents, manufacturing, research funding, global communications.
Pest can also be known as PESTLE which includes other factors such as: * Legal – Legislation which have been proposed and may come into effect and any passed legislation’s. * Environmental – Environmental issues either locally or globally and their social and political factors.
These factors represent the way and the extent to which a government influences the economy and a certain business. Political factors are represented by specific areas, such as labour law, tax policy, tariffs, trade restrictions and even environmental law. When political decisions result in legislation which is not favourable to a particular company they may sometimes use astroturfing techniques in an attempt to put pressure on the government to change its mind. An example of this occurred in 2012 in the UK when the Chancellor of the Exchequer, George Osborne, announced that VAT would be applicable on all ‘hot takeaway food’. Greggs bakery quickly jumped onto the press reaction and created a very clever campaign which put a huge amount of pressure on the government to reverse its decision, which it subsequently did. Economic Factors
This refers to areas unique to the economy and directly influenced by the economy, areas such as the inflation rate, interest...
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