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Pest Analysis

1680 words - 7 pages

1. Political

These factors determine the extent to which a government may influence the economy or a certain industry. For example a government may impose a new tax or duty due to which entire revenue generating structures of organizations might change. Political factors include tax policies, fiscal policy, trade tariffs etc. that a government may levy around the fiscal year and it may affect the business environment (economic environment) to a great extent.

Based on the case study given, political is about how to manage the different languages used daily in doing business and local pricing occurred in every of the transaction, taxation imposed by the government and shipping or ...view middle of the document...

Governments use taxation to encourage or discourage certain economic decisions. For example, reduction in taxable personal income by the amount paid as interest on home mortgage loans results in greater construction activity, and generates more jobs. Based on the case study given, e-tailers must able to control the market of their target before spread out the business there. Once confirm and there are finally stable, the business will running as what they planned. So, if the business occurred between local and outside countries, for sure the tax will be imposed to the e-tailers by the government.

Shipping also include in the political analysis. The term shipping originally referred to transport by sea, but is extended in American English to refer to transport by land or air (International English: "carriage") as well. While logistic is a term borrowed from the military environment where also fashionably used in the same sense. Instead of tax and local pricing, shipping also important in the political analysis. It is because of in order to operate smoothly in the market; the e-tailers need to have high knowledge in the political sites. For example, to make sure the operation successful they must be concerned on the transportation part or cost. The e-tailers need to concern on the shipping due to the area or geographical of the target market. If they are really wanted to growth up the business in the particular area, they must responsible on the area surrounding. For example, if the area is far away from each other and also the residents or any facilities and connections, of course the costs in built it up is higher rather than the area that already exist any facilities needed.

2. Economic:

Economic factors include inflation rate, interest rates, foreign exchange rates, economic growth patterns an else. It also accounts for the foreign direct investment (FDI) depending on certain specific industries that are undergoing this analysis. These factors are determinants of an economy’s performance that directly impacts a company and have long term effects. For example a rise in the inflation rate of any economy would affect the way companies’ price their products and services. Adding to that, it would affect the purchasing power of a consumer and change demand or supply models for that economy.

Based on the case study, economic here means the e-tailers need to concern on the inflation rate, interest rates, and foreign exchange rates, economic growth patterns an else. Other than that, economic is the spending time for every business where in beginning stage. So, the e-tailers need to consider many parts of business to make sure their business success in future. For example they need to look after on the price of the product whether that is reasonable for them to place on their product too. If not, they need to control all of the prices and try to more focusing on the other sector that can bring them profit and benefits. E-tailers must try and...

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