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Pest Analysis of a Returant

By maulana123 May 06, 2013 715 Words
Restaurant PEST Analysis:
A PEST analysis is a business tool that can help determine the macroeconomic factors that will impact a business. Specifically a PEST analysis measures the political, economic, social and technological factors that impact a business. A PEST analysis of a restaurant can be useful for determining if the environment is appropriate for such a business. Political Factors

* Political factors deal with the degree to which the government influences and controls businesses. For a restaurant, the most important factors will be health regulations relating to food preparation. A restaurant will be affected by factors that affect other businesses as well, such as tax rates and labor laws. Economic Factors

* Economic factors are extremely important to a restaurant. This is because restaurants are a luxury, not a necessity; people must have the disposable income to spend at a restaurant. Economic growth is, therefore, extremely important for restaurants. A restaurant will also be affected by the economic factors that affect most businesses such as the cost of capital and inflation. Social Factors

* The social factors of a market will have a huge impact on a business. For example, in a very health-conscious market, a restaurant should offer healthy foods, while in a market where people prefer high fat foods, they should not. Another important social factor is the attitude that people have toward restaurants and eating out; a restaurant stands a much better chance in a market where people prefer to eat out than in one in which people prefer to stay at home. Technological Factors

* In general, the restaurant industry is a low-technology industry. If there are strong technological demands in a market, this may make it difficult to enter the market. In the restaurant industry, specialized equipment is the largest technological factor. For example, if all the pizzerias in a market use specialized ovens to cook their pizzas quickly, then it will likely be necessary to acquire such an oven to compete with these restaurants. -------------------------------------------------

P: Political environmental factors such as:

stability of the government, government type, economic policy of the government, trade policy and events in surrounding countries.

E: Economical environmental factors:
* Higher interest rates may deter investment because it costs more to borrow. This could be a problem at the moment when we are trying to find people to invest in the project. * Inflation may provoke higher wage demands from employees and raise costs. * Increasing costs of material, storage or services used in the elaboration of the final product or service may make it more expensive. S: Social environmental factors:

* Increasing Health Awareness.
* Increasing change of eating habits towards healthier food. * Changing Attitude from Diet products to healthy products. * Increasing Working women. (Nobody cooking at home)
* Increasing Media attention and incentives towards "healthy living" from governments and organization.

T: Technological environmental Factors:
· Technological Innovations attracts people attention.
· Modernist-Technological themed places are getting more importance in consumer's mind. -------------------------------------------------

* Political, Economic, Social and Technological

I haven’t even heard of Aruba restaurant. Maybe u should have picked something easier like McDonalds of KFC.

* Political is generally to do with regulations and laws that can affect the business. It can also be concerned with political issues and their development. Generally political is split into regional, national and international.

* Economic
There are a variety of factors which can impact a business. They can be consumer’s activity. Their confidence can affect the business because if consumers lose confidence with the business.

The economy has a huge influence on businesses. Boom, recession, interest and tax levels.

* Social changes taking part outside of the business is usually birth and death rates, immigration and pressure groups. The business needs to know about the social changes because with the changing birth rates and deaths rates etc. they will need to change their potential customers. Another is Trends and fashion, e.g. everybody is concerned about eating healthily if the restaurant isn’t selling healthy food people may not go if people start thinking about obesity issues etc.

* Technological
Businesses operate rapid technological change. This can impact on making production. New machineries are usually very expensive so this would affect the companies finance function. That restaurant you’re talking may have outdated ovens and fryers etc. They may need to buy new ones to produce better quality and faster food.

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