What u think would be the major environmental factors impacting the expansion and contraction of the organization??
From Bahrain, Manama
From Bahrain, Manama
SOME USEFUL MATERIALS.
PESTEL ANALYSIS
-is also known as PEST in some places
-is also known as STEEPLE in some places.
IT IS A MATTER OF HOW MUCH DEPTH YOU WANT TO REACH.
The STEEPLE Analysis:
-Social/demographic,
-Technological,
-Economic,
-Environmental (natural),
-Political,
-Legal
-and Ethical factors.
-Also Geographical factors may be significant.
The STEEPLE factors play an important role in the value creation opportunities of a strategy. However they are usually outside the control of the corporation and must normally be considered as either threats or opportunities.
Below you will find examples of each of these factors.
Political (incl. Legal) [ [Poltical] EST[Environment][Legal] ]
-Environmental regulations and protection
[what are the government regualtions/ protection laws that must be observed ]
-Tax policies
what tax hinder the business and what taxes incentives are available]
-International trade regulations and restrictions
[ does the government encourage exports / with high tariffs on imports]
-Contract enforcement law/Consumer protection
[does the government enforce on consumer protection ]
-Employment laws]
[ is the government encouraging skilled immigrants with temp. permits]
-Government organization / attitude
[ does the government have a very positive attitude towards this industry]
-Competition regulation
[ are there regulation for limiting competition]
-Political Stability
[ politically , does the government have a very stable government ]
-Safety regulations
[ has the government adopted some of the modern safety regulations]
================================================== ===============
Economic [P[Economics][Social]TEL ]
-Economic growth
[ what is the economic growth rate / what are the reasons ]
-Interest rates & monetary policies
[ are the interest rates under control / is there a sound monetary policies]
-Government spending
[is government spending is significant and is it under control ]
-Unemployment policy
[what is the employment / unemployment policies of the government ]
-Taxation
[ has the taxation encouraged the industry ]
-Exchange rates
[ is there well managed exchange controls and is it helping the industry]
-Inflation rates
[ is the inflation well under control ]
-Stage of the business cycle
[ is your industry is on the growth pattern]
-Consumer confidence
[ is the consumer confidence is high/ strong and if not, why ]
==================================================
Social [ PE[Social]TEL ]
-Income distribution
[is there balanced income distribution policy ]
-Demographics, Population growth rates, Age distribution
[ what is population growth and why ]
-Labor / social mobility
[ what are the labor policies and is there labor mobility]
-Lifestyle changes
[ are there significant lifestyle changes taking place--more modernization/ why ]
-Work/career and leisure attitudes
[ are the population career minded and are seeking better lifestyle]
-Education
[ what are the education policies / is it successful ]
-Fashion, hypes
[are the people becoming fashion conscious ]
-Health consciousness & welfare, feelings on safety
[ are the people becoming health consciousness]
-Living conditions
[ is the living conditions improving fast and spreading rapidly]
================================================== =======
Technological [ PES [Technology] EL]
Government research spending
[is the government spending on research and development]
Industry focus on technological effort
[are the industries focused on using improved technology]
New inventions and development
[ are new inventions being encouraged for developments]
Rate of technology transfer
[ is the rate of technology transfer is speeding up ]
(Changes in) Information Technology
[ is the information technology rapidly moving and is there government support]
(Changes in) Internet
[ is the internet usage rapidly increasing and why]
(Changes in) Mobile Technology
[is the Mobile technology rapidly developing and is there government support]
FOR EACH OF THE ELEMENTS, YOU CAN ASK MORE QUESTIONS
AND SEEK THE FACTUAL SITUATION.
REGARDS
LEO LINGHAM
From India, Mumbai
260PESTEL ANALYSIS
-is also known as PEST in some places
-is also known as STEEPLE in some places.
IT IS A MATTER OF HOW MUCH DEPTH YOU WANT TO REACH.
The STEEPLE Analysis:
-Social/demographic,
-Technological,
-Economic,
-Environmental (natural),
-Political,
-Legal
-and Ethical factors.
-Also Geographical factors may be significant.
The STEEPLE factors play an important role in the value creation opportunities of a strategy. However they are usually outside the control of the corporation and must normally be considered as either threats or opportunities.
Below you will find examples of each of these factors.
Political (incl. Legal) [ [Poltical] EST[Environment][Legal] ]
-Environmental regulations and protection
[what are the government regualtions/ protection laws that must be observed ]
-Tax policies
what tax hinder the business and what taxes incentives are available]
-International trade regulations and restrictions
[ does the government encourage exports / with high tariffs on imports]
-Contract enforcement law/Consumer protection
[does the government enforce on consumer protection ]
-Employment laws]
[ is the government encouraging skilled immigrants with temp. permits]
-Government organization / attitude
[ does the government have a very positive attitude towards this industry]
-Competition regulation
[ are there regulation for limiting competition]
-Political Stability
[ politically , does the government have a very stable government ]
-Safety regulations
[ has the government adopted some of the modern safety regulations]
================================================== ===============
Economic [P[Economics][Social]TEL ]
-Economic growth
[ what is the economic growth rate / what are the reasons ]
-Interest rates & monetary policies
[ are the interest rates under control / is there a sound monetary policies]
-Government spending
[is government spending is significant and is it under control ]
-Unemployment policy
[what is the employment / unemployment policies of the government ]
-Taxation
[ has the taxation encouraged the industry ]
-Exchange rates
[ is there well managed exchange controls and is it helping the industry]
-Inflation rates
[ is the inflation well under control ]
-Stage of the business cycle
[ is your industry is on the growth pattern]
-Consumer confidence
[ is the consumer confidence is high/ strong and if not, why ]
==================================================
Social [ PE[Social]TEL ]
-Income distribution
[is there balanced income distribution policy ]
-Demographics, Population growth rates, Age distribution
[ what is population growth and why ]
-Labor / social mobility
[ what are the labor policies and is there labor mobility]
-Lifestyle changes
[ are there significant lifestyle changes taking place--more modernization/ why ]
-Work/career and leisure attitudes
[ are the population career minded and are seeking better lifestyle]
-Education
[ what are the education policies / is it successful ]
-Fashion, hypes
[are the people becoming fashion conscious ]
-Health consciousness & welfare, feelings on safety
[ are the people becoming health consciousness]
-Living conditions
[ is the living conditions improving fast and spreading rapidly]
================================================== =======
Technological [ PES [Technology] EL]
Government research spending
[is the government spending on research and development]
Industry focus on technological effort
[are the industries focused on using improved technology]
New inventions and development
[ are new inventions being encouraged for developments]
Rate of technology transfer
[ is the rate of technology transfer is speeding up ]
(Changes in) Information Technology
[ is the information technology rapidly moving and is there government support]
(Changes in) Internet
[ is the internet usage rapidly increasing and why]
(Changes in) Mobile Technology
[is the Mobile technology rapidly developing and is there government support]
FOR EACH OF THE ELEMENTS, YOU CAN ASK MORE QUESTIONS
AND SEEK THE FACTUAL SITUATION.
REGARDS
LEO LINGHAM
From India, Mumbai
whats the effect of these factors in the expansion or contraction of company ????????/
These factors exist in the socio-economic-political systems in most
countries. They keep changing too. The organization
-if it does nothing,and it will be left standing still/ perhaps left behind.
-if it uses these factors and make adaptable policies, it can expand.
-if it too cautious/does nothing, it could contract.
IT IS A MATTER FOR THE ORGANIZATION HOW IT
-IS ADAPTABLE TO THE SITUATIONS
-STRATEGIES ITS OPTIONS
-EXPLOITS THE OPPORTUNITIES.
ETC ETC
=======================================
It is often difficult to identify the relevant factors in the external, marketplace environment which are likely to affect an individual enterprise. There are many external influences. They tend to be constantly changing in our turbulent environment, and may present potential opportunities at one point in time and potential threats at another. Relevant examples are government economic policy and cyclical changes in the economy.
The following checklist presents a number of external factors that may be considered relevent.
I. Social factors
*Fashion trends
-changes in lifestyle of the population segment could affect the demand for products/services.
If the organizations do not respond to these demand, it will be facing loss of revenue/ profit.
*organization which meets the change demand will expand.
*organization which do change to meet the demand,it will decline.
-----------------------------------------------------------------------------------------------------------------------
*Consumer values
-people have their individual values and they associate it with organization/products/services,
if that perceived values do exist, organization could lose the sales and hence revenue/profit.
*organization which meets the consumer values will expand.
*organization which will not meet the demand,it will decline.
-----------------------------------------------------------------------------------------------------------------------
*Changing attitudes of society
-society attitude change with time/education/more information etc. Organization must listen
and respond to these attitudes. Otherwise people could protest against the organization.
An example is the pollution of the air.
*organization which meets the society attitude will expand.
*organization which will not meet the society attitude,it will decline.
-----------------------------------------------------------------------------------------------------------------
*Organised consumer groups and pressure groups
-organized consumer groups and pressure group activists are engaging organizations
selling / promoting fatty foods etc. Organizations which are invovled in such activities
must take action , otherwise it would affect their results.
*organization which meets the consumer needs/wants will expand.
*organization which will not meet the consumer needs /wants ,it will decline.
-----------------------------------------------------------------------------------------------------------------
================================================== =======
2. Economic factors
*Cyclical fluctuations
-cyclical / seasonal trends affect the demand for products, like ice-cream are
in great demand in summer and hence organizations , which are involved in
cyclical / seasonal products must gear themselves for the period or lose
out on the opportunities of sales / profit.
*organization which meets the consumer needs/wants will expand.
*organization which will not meet the consumer needs /wants ,it will decline.
-------------------------------------------------------------------------------------------------
Population trends
-population trends / the changes within it affect the demand for products/services.
A classical example is the greying population , where a significant proportion of
the population moves into the bracket of +55 and above. Here the organization
must respond to the changing demands or otherwise miss out on the revenue/profit.
*organization which meets the changing consumer needs/wants will expand.
*organization which will not meet the changing consumer needs /wants ,it will decline.
---------------------------------------------------------------------------------------------------------------
Industry sector trends
-industry sector trends also affect the organization . Take the industry like
the construction industry, which goes through the boom/gloom every four
years. The building supplies organization faces the same trends and hence
need to organize themselves to meet the highs and the lows.
*organization which meets the industry sector trends will expand.
*organization which will not meet the industry sector trends ,it will decline.
----------------------------------------------------------------------------------------------------------
Productivity and labour cost trends
-higher labor costs affects the price of the products/services and hence
the organization seeks productivity improvements to match the labor cost rise.
Otherwise the organization would lose sales and hence revenue / profit.
*organization which meets the labor trends will expand.
*organization which will not meet the labor trends ,it will decline.
--------------------------------------------------------------------------------------
Availability of staff
-shortage of staff affects the skill availability, which means the organization
have to pay higher wages to attract the labor.higher labor costs affects the price of the products/services and hence
the organization seeks productivity improvements to match the labor cost rise.
Otherwise the organization would lose sales and hence revenue / profit.
--------------------------------------------------------------------------------------------------------
Availability of materials
-availability of materials affect the demand of the product. If there is a shortage of
materials, the price goes up , which affects the sales and hence the revenue / profit.
---------------------------------------------------------------------------------------------------------------
*Average disposable incomes
-as the average disposable incomes go up, the demand for products/services go
up, as people lift their lifestyle. If the organization do not respond to these
changes , it will lose out on the opportunities to make sales and hence the
revenue / profit.
--------------------------------------------------------------------------------------------
*Competitiveness compared with overseas companies
-as the overseas companies competitiveness increases, the demand for products/services
become competitive, as people make choices. If the organization do not respond to these
changes , it will lose out on the opportunities to make sales and hence the
revenue / profit.
--------------------------------------------------------------------------------------------
*Relative inflation rates
-if the relative inflation goes up, the demand for products/services go down.
if the relative inflation goes down, the demand for products/services go up.
If the organization do not respond to these changes , it will lose out
on the opportunities to make sales and hence the revenue / profit.
--------------------------------------------------------------------------------------------
3. Technology
New products being developed
-organization must feel the pulse of the people continuously to satisfy the
needs/wants of the people and satisfy them with new products/services.
If the organization do not respond to these changing demands , it will lose out
on the opportunities to make sales and hence the revenue / profit.
--------------------------------------------------------------------------------------------
New manufacturing processes
-to meet the changing needs/wants, new products etc organization must
look for new manufacturing processes.
If the organization do not respond to new challenges , it will lose out
on the opportunities to make sales and hence the revenue / profit.
--------------------------------------------------------------------------------------------
Changes affecting end use of products
-in the same manner, the organization must monitor the new end use
applications of products/services,If the organization do not respond to these
changing demands , it will lose out on the opportunities to make sales
and hence the revenue / profit.
-------------------------------------------------------------------------------------------- Risk of obsolescence
-organization must watch their market reactions to products/services
otherwise, due to obsolescence, it will lose out to competiton
on the opportunities to make sales and hence the revenue / profit.
--------------------------------------------------------------------------------------------
4. Government ---Federal
Industry assistance programs
-these are government assistance provided at the point of entry
into the market. Organizations which are eligible should use it
to establish itself in the market. It enables the organization to
market the product and raise revenue / hence profit.
-----------------------------------------------------------------------------
Tariffs and industry protection policies
-these are government tax concessions provided at the point of entry
into the market. Organizations which are eligible should use it
to establish itself in the market. It enables the organization to
market the product and raise revenue / hence profit.
-----------------------------------------------------------------------------
Trade practices
-these are government controls over companies who
employ mal-practices to gain monoploy in the market.
These controls helps the organization to play in
the level field for all. So that, every organization has
equal opportunities.
---------------------------------------------------------------------------------------
Balance of payments
-If the balance of payments are positive, it is a good news for the
organization, as there will be no government action on the business
sector.
If the balance of payments are negative, it is possible to have
some government action, which could harm some organizations.
-------------------------------------------------------------------------------------------
Foreign trade policies
-foreign trade policies could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
Regulation of companies and securities
-Regulations could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
Regulations regarding foreign companies
-Regulations regarding foreign companies could have both
negative / positive reactions. Positive actions could help the
organization to improve their performance and Negative actions
could hamper the organization growth in revenue/ profit.
-----------------------------------------------------------------------------
Taxation
-Taxation policies could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
Subsidies
-Subsidies policies could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
Commercial regulations
-Commercial regulations could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
================================================== =======
5. The industry sector
Growing or declining industry
GROWTH TREND could help the organization to improve their
performance and DECLINING TREND could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
Cost of entry into and exit from the industry
Lower cost of entry/exit could help the organization to improve their
performance and Higher cost of entry/exit could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------
Trade unions
Healthy trade union relations could help the organization to improve their
performance and Unhealthy trade union relations could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------------------------------------
Specific industry assistance programs
Industry assistance programs could help the organization to improve their
performance and hence the organization's
growth in revenue/ profit.
--------------------------------------------------------------------------------------------------------------
================================================== ==========
6. Demographic factors
*Changes in the structure of the population (e.g. impact of declining birthrate and an ageing population)
-population trends / the changes within it affect the demand for products/services.
A classical example is the greying population , where a significant proportion of
the population moves into the bracket of +55 and above. Here the organization
must respond to the changing demands or otherwise miss out on the revenue/profit.
---------------------------------------------------------------------------------------------------------------
*Population drift to and between capital cities
-population drift also affect the demand for products/services.
Here the organization must respond to the changing demands or
otherwise miss out on the revenue/profit.
---------------------------------------------------------------------------------------------------------------
7. Customers and suppliers
*Their perceptions of the enterprise
POSITIVE picture could help the organization to improve their
performance and NEGAGTIVE picture could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
8. Competitors
Competitor strengths and weaknesses
*Finance and financial strength
- weak competitor could help the organization to improve their
performance and strong competitor could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
* Product range
- weak competitive product range could help the organization to improve their
performance and strong competitive product range could hamper the organization
growth in revenue/ profit.
--------------------------------------------------------------------------------------------------------
* Product quality
- poor competitive quality could help the organization to improve their
performance and strong competitive could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
* Marketing and channels of distribution
- weak competitive marketing/ distribution could help the organization to improve their
performance and strong competitive marketing/distribution could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
* Price structure
- weak competitive pricing could help the organization to improve their
performance and strong competitive pricing could hamper the organization
growth in revenue/ profit.
IN ALL THE FACTORS, THE ORGANIZATION WHICH RESPONDS
TO THE INTERNAL /EXTERNAL FACTORS,
WITH TIMELY ACTION PLAN, WILL SURVIVE / EXPAND.
WHILE THE ONES WHICH DO NOT RESPOND
TO THE INTERNAL/EXTERNAL FACTORS,
WITH TIMELY ACTION PLAN, WILL CONTRACT/ PERHAPS DEMISE.
================================================== =========
regards
LEO LINGHAM
From India, Mumbai
These factors exist in the socio-economic-political systems in most
countries. They keep changing too. The organization
-if it does nothing,and it will be left standing still/ perhaps left behind.
-if it uses these factors and make adaptable policies, it can expand.
-if it too cautious/does nothing, it could contract.
IT IS A MATTER FOR THE ORGANIZATION HOW IT
-IS ADAPTABLE TO THE SITUATIONS
-STRATEGIES ITS OPTIONS
-EXPLOITS THE OPPORTUNITIES.
ETC ETC
=======================================
It is often difficult to identify the relevant factors in the external, marketplace environment which are likely to affect an individual enterprise. There are many external influences. They tend to be constantly changing in our turbulent environment, and may present potential opportunities at one point in time and potential threats at another. Relevant examples are government economic policy and cyclical changes in the economy.
The following checklist presents a number of external factors that may be considered relevent.
I. Social factors
*Fashion trends
-changes in lifestyle of the population segment could affect the demand for products/services.
If the organizations do not respond to these demand, it will be facing loss of revenue/ profit.
*organization which meets the change demand will expand.
*organization which do change to meet the demand,it will decline.
-----------------------------------------------------------------------------------------------------------------------
*Consumer values
-people have their individual values and they associate it with organization/products/services,
if that perceived values do exist, organization could lose the sales and hence revenue/profit.
*organization which meets the consumer values will expand.
*organization which will not meet the demand,it will decline.
-----------------------------------------------------------------------------------------------------------------------
*Changing attitudes of society
-society attitude change with time/education/more information etc. Organization must listen
and respond to these attitudes. Otherwise people could protest against the organization.
An example is the pollution of the air.
*organization which meets the society attitude will expand.
*organization which will not meet the society attitude,it will decline.
-----------------------------------------------------------------------------------------------------------------
*Organised consumer groups and pressure groups
-organized consumer groups and pressure group activists are engaging organizations
selling / promoting fatty foods etc. Organizations which are invovled in such activities
must take action , otherwise it would affect their results.
*organization which meets the consumer needs/wants will expand.
*organization which will not meet the consumer needs /wants ,it will decline.
-----------------------------------------------------------------------------------------------------------------
================================================== =======
2. Economic factors
*Cyclical fluctuations
-cyclical / seasonal trends affect the demand for products, like ice-cream are
in great demand in summer and hence organizations , which are involved in
cyclical / seasonal products must gear themselves for the period or lose
out on the opportunities of sales / profit.
*organization which meets the consumer needs/wants will expand.
*organization which will not meet the consumer needs /wants ,it will decline.
-------------------------------------------------------------------------------------------------
Population trends
-population trends / the changes within it affect the demand for products/services.
A classical example is the greying population , where a significant proportion of
the population moves into the bracket of +55 and above. Here the organization
must respond to the changing demands or otherwise miss out on the revenue/profit.
*organization which meets the changing consumer needs/wants will expand.
*organization which will not meet the changing consumer needs /wants ,it will decline.
---------------------------------------------------------------------------------------------------------------
Industry sector trends
-industry sector trends also affect the organization . Take the industry like
the construction industry, which goes through the boom/gloom every four
years. The building supplies organization faces the same trends and hence
need to organize themselves to meet the highs and the lows.
*organization which meets the industry sector trends will expand.
*organization which will not meet the industry sector trends ,it will decline.
----------------------------------------------------------------------------------------------------------
Productivity and labour cost trends
-higher labor costs affects the price of the products/services and hence
the organization seeks productivity improvements to match the labor cost rise.
Otherwise the organization would lose sales and hence revenue / profit.
*organization which meets the labor trends will expand.
*organization which will not meet the labor trends ,it will decline.
--------------------------------------------------------------------------------------
Availability of staff
-shortage of staff affects the skill availability, which means the organization
have to pay higher wages to attract the labor.higher labor costs affects the price of the products/services and hence
the organization seeks productivity improvements to match the labor cost rise.
Otherwise the organization would lose sales and hence revenue / profit.
--------------------------------------------------------------------------------------------------------
Availability of materials
-availability of materials affect the demand of the product. If there is a shortage of
materials, the price goes up , which affects the sales and hence the revenue / profit.
---------------------------------------------------------------------------------------------------------------
*Average disposable incomes
-as the average disposable incomes go up, the demand for products/services go
up, as people lift their lifestyle. If the organization do not respond to these
changes , it will lose out on the opportunities to make sales and hence the
revenue / profit.
--------------------------------------------------------------------------------------------
*Competitiveness compared with overseas companies
-as the overseas companies competitiveness increases, the demand for products/services
become competitive, as people make choices. If the organization do not respond to these
changes , it will lose out on the opportunities to make sales and hence the
revenue / profit.
--------------------------------------------------------------------------------------------
*Relative inflation rates
-if the relative inflation goes up, the demand for products/services go down.
if the relative inflation goes down, the demand for products/services go up.
If the organization do not respond to these changes , it will lose out
on the opportunities to make sales and hence the revenue / profit.
--------------------------------------------------------------------------------------------
3. Technology
New products being developed
-organization must feel the pulse of the people continuously to satisfy the
needs/wants of the people and satisfy them with new products/services.
If the organization do not respond to these changing demands , it will lose out
on the opportunities to make sales and hence the revenue / profit.
--------------------------------------------------------------------------------------------
New manufacturing processes
-to meet the changing needs/wants, new products etc organization must
look for new manufacturing processes.
If the organization do not respond to new challenges , it will lose out
on the opportunities to make sales and hence the revenue / profit.
--------------------------------------------------------------------------------------------
Changes affecting end use of products
-in the same manner, the organization must monitor the new end use
applications of products/services,If the organization do not respond to these
changing demands , it will lose out on the opportunities to make sales
and hence the revenue / profit.
-------------------------------------------------------------------------------------------- Risk of obsolescence
-organization must watch their market reactions to products/services
otherwise, due to obsolescence, it will lose out to competiton
on the opportunities to make sales and hence the revenue / profit.
--------------------------------------------------------------------------------------------
4. Government ---Federal
Industry assistance programs
-these are government assistance provided at the point of entry
into the market. Organizations which are eligible should use it
to establish itself in the market. It enables the organization to
market the product and raise revenue / hence profit.
-----------------------------------------------------------------------------
Tariffs and industry protection policies
-these are government tax concessions provided at the point of entry
into the market. Organizations which are eligible should use it
to establish itself in the market. It enables the organization to
market the product and raise revenue / hence profit.
-----------------------------------------------------------------------------
Trade practices
-these are government controls over companies who
employ mal-practices to gain monoploy in the market.
These controls helps the organization to play in
the level field for all. So that, every organization has
equal opportunities.
---------------------------------------------------------------------------------------
Balance of payments
-If the balance of payments are positive, it is a good news for the
organization, as there will be no government action on the business
sector.
If the balance of payments are negative, it is possible to have
some government action, which could harm some organizations.
-------------------------------------------------------------------------------------------
Foreign trade policies
-foreign trade policies could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
Regulation of companies and securities
-Regulations could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
Regulations regarding foreign companies
-Regulations regarding foreign companies could have both
negative / positive reactions. Positive actions could help the
organization to improve their performance and Negative actions
could hamper the organization growth in revenue/ profit.
-----------------------------------------------------------------------------
Taxation
-Taxation policies could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
Subsidies
-Subsidies policies could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
Commercial regulations
-Commercial regulations could have both negative / positive reactions.
Positive actions could help the organization to improve their
performance and Negative actions could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------
================================================== =======
5. The industry sector
Growing or declining industry
GROWTH TREND could help the organization to improve their
performance and DECLINING TREND could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
Cost of entry into and exit from the industry
Lower cost of entry/exit could help the organization to improve their
performance and Higher cost of entry/exit could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------
Trade unions
Healthy trade union relations could help the organization to improve their
performance and Unhealthy trade union relations could hamper the organization
growth in revenue/ profit.
-----------------------------------------------------------------------------------------------------------
Specific industry assistance programs
Industry assistance programs could help the organization to improve their
performance and hence the organization's
growth in revenue/ profit.
--------------------------------------------------------------------------------------------------------------
================================================== ==========
6. Demographic factors
*Changes in the structure of the population (e.g. impact of declining birthrate and an ageing population)
-population trends / the changes within it affect the demand for products/services.
A classical example is the greying population , where a significant proportion of
the population moves into the bracket of +55 and above. Here the organization
must respond to the changing demands or otherwise miss out on the revenue/profit.
---------------------------------------------------------------------------------------------------------------
*Population drift to and between capital cities
-population drift also affect the demand for products/services.
Here the organization must respond to the changing demands or
otherwise miss out on the revenue/profit.
---------------------------------------------------------------------------------------------------------------
7. Customers and suppliers
*Their perceptions of the enterprise
POSITIVE picture could help the organization to improve their
performance and NEGAGTIVE picture could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
8. Competitors
Competitor strengths and weaknesses
*Finance and financial strength
- weak competitor could help the organization to improve their
performance and strong competitor could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
* Product range
- weak competitive product range could help the organization to improve their
performance and strong competitive product range could hamper the organization
growth in revenue/ profit.
--------------------------------------------------------------------------------------------------------
* Product quality
- poor competitive quality could help the organization to improve their
performance and strong competitive could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
* Marketing and channels of distribution
- weak competitive marketing/ distribution could help the organization to improve their
performance and strong competitive marketing/distribution could hamper the organization
growth in revenue/ profit.
----------------------------------------------------------------------------------------------------------
* Price structure
- weak competitive pricing could help the organization to improve their
performance and strong competitive pricing could hamper the organization
growth in revenue/ profit.
IN ALL THE FACTORS, THE ORGANIZATION WHICH RESPONDS
TO THE INTERNAL /EXTERNAL FACTORS,
WITH TIMELY ACTION PLAN, WILL SURVIVE / EXPAND.
WHILE THE ONES WHICH DO NOT RESPOND
TO THE INTERNAL/EXTERNAL FACTORS,
WITH TIMELY ACTION PLAN, WILL CONTRACT/ PERHAPS DEMISE.
================================================== =========
regards
LEO LINGHAM
From India, Mumbai
Dear Leo,
Thank you. your explanation was infact quite exhaustive.
I feel more comfortable using the "Porters model", which is a more comprehensive model to read the structure of the industry and assess the competitive position of the company in that particular industry. though PEST and the STEEPLE or SPECTACLE analysis do the same job, mapping of different variables seem more logical when using the "Poters model".
Thank you once again for giving us a refresher on the company PEST analysis which i read some 3 years back in the college.
Regards
Srikanth Ch.
From India, Hyderabad
Thank you. your explanation was infact quite exhaustive.
I feel more comfortable using the "Porters model", which is a more comprehensive model to read the structure of the industry and assess the competitive position of the company in that particular industry. though PEST and the STEEPLE or SPECTACLE analysis do the same job, mapping of different variables seem more logical when using the "Poters model".
Thank you once again for giving us a refresher on the company PEST analysis which i read some 3 years back in the college.
Regards
Srikanth Ch.
From India, Hyderabad
Below you will find examples of each of these factors.
Political (incl. Legal) [ [Poltical] EST[Environment][Legal] ]
==========================================
-Tax policies
what tax hinder the business and what taxes incentives are available]
[ if the tax policies are liberal / incentivated, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
========================================
-International trade regulations and restrictions
[ does the government encourage exports / with high tariffs on imports]
[ if the exports policies are liberal / incentivated, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
------------------------------------------------------------------------------------------
[ if the import policies are liberal / incentivated, local mfg. businesses will
contract , which means the impact on HR
-less RECRUITMENT/ SELECTION
-MORE TRAINING to improve efficiency / productivity
================================================== ====
-Employment laws]
[ is the government encouraging skilled immigrants with temp. permits]
[if the government relaxes the rules on skilled migrants,
which means the impact on HR
-EMPHASIS WILL BE ON FOREIGN RECRUITMENTS.
-DEVELOPMENT OF OVERSEAS CONTRACTS
-TRAINING FOR THE INCOMING STAFF ON LOCAL CULTURE.
-TRAINING FOR MANAGERS TO MANAGE DIVERSITY
================================================== =====
Economic [P[Economics][Social]TEL ]
-Economic growth
[ what is the economic growth rate / what are the reasons ]
[ if the economy is on growth path, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
-COMPENSATION NEEDS REVISION
--------------------------------------------------------------------------------
[ if the economy contracts/demand drops, businesses will reduce
volume , which means the impact on HR
-less RECRUITMENT/ SELECTION
-MORE TRAINING TO IMPROVE EFFICIENCY/PRODUCTIVITY
-MORE INCENTIVATES FOR PRODUCTIVITY GAIN
================================================== =
-Interest rates & monetary policies
[ are the interest rates under control / is there a sound monetary policies]
[ if the interest rate goes down/ the monetary policies are liberal,
as the demand goes up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
----------------------------------------------------------------------------
[ if the interest rate goes up , the demand will go down
businesses will downsize / cut cost
which means the impact on HR
-less RECRUITMENT/ SELECTION
-MORE TRAINING for efficiency / productivity improvements
-EMPHASIS WILL BE FOR ''PAY FOR PERFORMANCE''.
================================================== =
-Government spending
[is government spending is significant and is it under control ]
[ if the government increases the spending on infrastructures etc,
the demand goes up , businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
==================================================
-Unemployment policy
[what is the employment / unemployment policies of the government ]
================================================== ===
-Taxation
[ has the taxation encouraged the industry ]
[ if the taxation policies encouraged the industry, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =====
-Consumer confidence
[ is the consumer confidence is high/ strong and if not, why ]
[ as the consumer confidence goes up, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
==================================================
Social [ PE[Social]TEL ]
-Income distribution
[is there balanced income distribution policy ]
[ as the income level goes up and income distribution improves,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
==================================================
-Demographics, Population growth rates, Age distribution
[ what is population growth and why ]
[ as the population level goes up and age distribution improves,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== ==
-Lifestyle changes
[ are there significant lifestyle changes taking place--more modernization/ why ]
[ as the life style goes up and more modernization improvements,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =======
-Work/career and leisure attitudes
[ are the population career minded and are seeking better lifestyle]
[ as the income level goes up and workers attitudes changes,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
==================================================
-Education
[ what are the education policies / is it successful ]
[ as the education level goes up and income distribution improves,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =====
-Living conditions
[ is the living conditions improving fast and spreading rapidly]
[ as the income level goes up and living conditions improves,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =======
Technological [ PES [Technology] EL]
==================================================
Industry focus on technological effort
[are the industries focused on using improved technology]
[ as the industry focuses on technology, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== ======
New inventions and development
[ are new inventions being encouraged for developments]
[ as more inventions are brought out, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== ====
Rate of technology transfer
[ is the rate of technology transfer is speeding up ]
[ as the rate of technology transfer speeds up, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =====
(Changes in) Information Technology
[ is the information technology rapidly moving and is there government support]
[ as the IT usage increases, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =========
FOR EACH OF THE ELEMENTS,
-I HAVE SHOWN THE POSITIVE SIDE OF THE POLICIES,
THE BUSINESS POSITIVE IMPACT
-THE POSITIVE HR REACTIONS.
IN THE SAME MANNER,
-ALL NEGATIVE SIDE OF THE POLICIES, WILL HAVE
THE BUSINESS NEGATIVE IMPACT
WHICH MEAN HRM WILL HAVE TAKE RATIONAL
ACTION PLAN TO SUIT THE SITUATIONS, WHICH COULD INCLUDE
-downsizing of employees nos.
-restructuring of the organization
-re training
-multiskilling
-jobs re organization
-more skill training
-pay for performance
etc etc etc.
========================================
regards
LEO LINGHAM
From India, Mumbai
Political (incl. Legal) [ [Poltical] EST[Environment][Legal] ]
==========================================
-Tax policies
what tax hinder the business and what taxes incentives are available]
[ if the tax policies are liberal / incentivated, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
========================================
-International trade regulations and restrictions
[ does the government encourage exports / with high tariffs on imports]
[ if the exports policies are liberal / incentivated, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
------------------------------------------------------------------------------------------
[ if the import policies are liberal / incentivated, local mfg. businesses will
contract , which means the impact on HR
-less RECRUITMENT/ SELECTION
-MORE TRAINING to improve efficiency / productivity
================================================== ====
-Employment laws]
[ is the government encouraging skilled immigrants with temp. permits]
[if the government relaxes the rules on skilled migrants,
which means the impact on HR
-EMPHASIS WILL BE ON FOREIGN RECRUITMENTS.
-DEVELOPMENT OF OVERSEAS CONTRACTS
-TRAINING FOR THE INCOMING STAFF ON LOCAL CULTURE.
-TRAINING FOR MANAGERS TO MANAGE DIVERSITY
================================================== =====
Economic [P[Economics][Social]TEL ]
-Economic growth
[ what is the economic growth rate / what are the reasons ]
[ if the economy is on growth path, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
-COMPENSATION NEEDS REVISION
--------------------------------------------------------------------------------
[ if the economy contracts/demand drops, businesses will reduce
volume , which means the impact on HR
-less RECRUITMENT/ SELECTION
-MORE TRAINING TO IMPROVE EFFICIENCY/PRODUCTIVITY
-MORE INCENTIVATES FOR PRODUCTIVITY GAIN
================================================== =
-Interest rates & monetary policies
[ are the interest rates under control / is there a sound monetary policies]
[ if the interest rate goes down/ the monetary policies are liberal,
as the demand goes up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
----------------------------------------------------------------------------
[ if the interest rate goes up , the demand will go down
businesses will downsize / cut cost
which means the impact on HR
-less RECRUITMENT/ SELECTION
-MORE TRAINING for efficiency / productivity improvements
-EMPHASIS WILL BE FOR ''PAY FOR PERFORMANCE''.
================================================== =
-Government spending
[is government spending is significant and is it under control ]
[ if the government increases the spending on infrastructures etc,
the demand goes up , businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
==================================================
-Unemployment policy
[what is the employment / unemployment policies of the government ]
================================================== ===
-Taxation
[ has the taxation encouraged the industry ]
[ if the taxation policies encouraged the industry, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =====
-Consumer confidence
[ is the consumer confidence is high/ strong and if not, why ]
[ as the consumer confidence goes up, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
==================================================
Social [ PE[Social]TEL ]
-Income distribution
[is there balanced income distribution policy ]
[ as the income level goes up and income distribution improves,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
==================================================
-Demographics, Population growth rates, Age distribution
[ what is population growth and why ]
[ as the population level goes up and age distribution improves,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== ==
-Lifestyle changes
[ are there significant lifestyle changes taking place--more modernization/ why ]
[ as the life style goes up and more modernization improvements,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =======
-Work/career and leisure attitudes
[ are the population career minded and are seeking better lifestyle]
[ as the income level goes up and workers attitudes changes,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
==================================================
-Education
[ what are the education policies / is it successful ]
[ as the education level goes up and income distribution improves,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =====
-Living conditions
[ is the living conditions improving fast and spreading rapidly]
[ as the income level goes up and living conditions improves,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =======
Technological [ PES [Technology] EL]
==================================================
Industry focus on technological effort
[are the industries focused on using improved technology]
[ as the industry focuses on technology, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== ======
New inventions and development
[ are new inventions being encouraged for developments]
[ as more inventions are brought out, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== ====
Rate of technology transfer
[ is the rate of technology transfer is speeding up ]
[ as the rate of technology transfer speeds up, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =====
(Changes in) Information Technology
[ is the information technology rapidly moving and is there government support]
[ as the IT usage increases, more jobs are created,
demand for product/services will go up, businesses will add
expansion , which means the impact on HR
-MORE RECRUITMENT/ SELECTION
-MORE INDUCTION / ORIENTATION
-MORE TRAINING
================================================== =========
FOR EACH OF THE ELEMENTS,
-I HAVE SHOWN THE POSITIVE SIDE OF THE POLICIES,
THE BUSINESS POSITIVE IMPACT
-THE POSITIVE HR REACTIONS.
IN THE SAME MANNER,
-ALL NEGATIVE SIDE OF THE POLICIES, WILL HAVE
THE BUSINESS NEGATIVE IMPACT
WHICH MEAN HRM WILL HAVE TAKE RATIONAL
ACTION PLAN TO SUIT THE SITUATIONS, WHICH COULD INCLUDE
-downsizing of employees nos.
-restructuring of the organization
-re training
-multiskilling
-jobs re organization
-more skill training
-pay for performance
etc etc etc.
========================================
regards
LEO LINGHAM
From India, Mumbai
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