Pest analysis is used to describe a framework of macro-environmental factors which are Political, Economic, Sociocultural and Technological. This is a part of external analysis when doing the market research. It gives a company an overview of the different factors in the overall environment in order to understand the market growth or decline, also understanding the situation, potential and operational direction of the company.
In 2001, McDonald’s Switzerland CEO planned to operate a hotel which is closed to the Zurich as Switzerland is already a potential market. However, there are lots of competitors and it was a big challenge for this project.
Expansion of Zurich Airport (Political factor)
The Golden Arch Hotel is located close to the Zurich Airport, thus the target market is business traveler. In 2001, Zurich was on the way of upswing. The occupancy of Hotels around Zurich was high and gained benefit from this market growth. Furthermore, Swissair acquired many small European airlines. Both of the business, leisure traveler and airline crews was increasing rapidly thereby it increased the demand of accommodation. Simultaneously, Zurich became a well-developed city by high investment of facilities and infrastructure from the Swiss government.
Government tax (Political factor)
According to the corporate tax rate in Switzerland was around 20% which is a high tax rate. The profit of golden arch hotel can be affected.
Employment laws (Political factor)
Due to the employment law in Switzerland, there are some regulation between the employer and employee(s). Employer has to ensure the employee’s health and safety and their working hour.
Currency exchange rates (Economic factor)
The frequent individual travelers are the main target market of Golden arch Hotel and they are mainly from Europe, the United States. As the exchange rate between USD and CHF was low in 2001, the individual travelers increased because of this.
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