Business Studies


───▄▀▀▀▄▄▄▄▄▄▄▀▀▀▄─── ───█▒▒░░░░░░░░░▒▒█─── ────█░░█░░░░░█░░█──── ─▄▄──█░░░▀█▀░░░█──▄▄─ █░░█─▀▄░░░░░░░▄▀─█░░█ █▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀█ █░░╦─╦╔╗╦─╔╗╔╗╔╦╗╔╗░░█ █░░║║║╠─║─║─║║║║║╠─░░█ █░░╚╩╝╚╝╚╝╚╝╚╝╩─╩╚╝░░█ █▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄█ : Presillyn Tan Jie Yin, Fairview International School . recent update : Production Location Economies of Scale Production Opportunity Cost Determinant of Demand and Supply Price Elasticity of Supply and Demand Demand and Supply How to decide?	PEST Analysis written by Presillyn Tan ✈ Pest Analysis As soon as the organization ha set its vision, mission and goals, the next stage in strategy formulation is the strategic analysis. This analysis encompasses the analysis of the external environment, organizational analysis, industry analysis and competitive portfolio analysis. The external or environmental factors are those forces outside the control of a single organization. PEST analysis is categorized into four board areas: Political, Economic, Social and Technological forces. Each of these forces has an impact on the key stakeholders of the organization, and subsequently provides favorable impact or unfavorable impact to the organization. For example, a change in the social trends like demographic patterns or baby boom may have implications to the existence of new consumers like new born babies. Political Forces Political forces are those factors have governmental relations or dealings, whether it is at the federal level, state level or the local government level. The political forces can refer to the laws and legislation or policies adopted by the government in power. These are factors that can provide favorable or unfavorable impact on the organization One of the main concerns in political forces is political stability. This refers to the extent in which the country has strong political support from the people or not. Political stability can provide strong foundations for business organizations to grow in the long run. One way of ensuring political stability is to get the voters mandate in the general elections, and reduce extreme political ideologies that can create instability. For example, the succession of Datuk Seri Abdullah Ahmad Badawi as Prime Minister of Malaysia from Tun Dr Mahathir Mohamed is important in assuring political stability in the succession of the nation’s leadership. The increasing number of terrorists and related activities in a country can also cause political upheaval and thereby reduce attractiveness of businessmen to invest in the region or country. Another impact area of concern in the political factors is the government regulations and deregulations policies. This is reflected by the new laws and legislations introduced to curtail the unhealthy activities in the business community. The introduction of special tariffs and by-laws also has an impact on business operation, like the service tax reforms introduced to all service organizations with a minimum sales volume. Economy Forces Economic forces are those factors that are related to the economic development and growth of a particular country. These are factors like gross national product (GNP) or gross domestic product (GDP) trends and growth rates, interest rates, money supply, inflation rates, unemployment rates, wage and price controls, level of disposable income, stock market trends, import and export factor, worker productivity, government budgets and many others. Figure 1 : Key Economic Forces Social Forces The social forces cover a broad spectrum of factors including cultural, demographic, and environmental factors. The social and cultural factors may refer to those forces like societal values, norms, culture, religion, language and attitudes, that may change or show preferences of one type over another. In a country where there are many ethnic groups for example Malaysia, which comprises ethnic groups like Malays, Chinese, Indians, Iban, Bidayuh, Kadazan, Bajau, and many others, social factors can pose difficulty when trying to cope with the changes in the environment. The social values of these ethnic groups are different to the extent that in trying to cope with the diverse cultures can be a challenging exercise. For example, the Malays are mainly Muslims, while the Chinese can be a Buddhist, Taoist, Christian or even Muslims. Similarly the Indians can be Hindus or Muslims or Christians. In this respect, when there is a greater awareness among the Muslims for the need to consume ‘halal’ products, business organizations have to respond effectively to this trend. Figure 2: Key Social Forces Technological Forces Changes in technology create new marketing opportunities when they are noticed by customers. Technology can influence marketing activities by making them more efficient and effective, such as computers tracking inventory. Advances in communication technology have made sales representatives more efficient and effective in their dealings with managers and customers, and the internet has become the backbone of today’s e-commerce system. In the last decade, the rate of technological changes has rapid. This is attributed to the many innovations and invention developed in an effort to improve the work and life of the community. Technological advancement as dramatically affected business organizations in terms of their products and services offered, and also their relations with other stakeholders and business practices. One major revolution in technology is the development of the internet. The internet has created the demand for e-business or e-commerce and the revolution on education through e-learning. The internet has also demonstrated the borderless way of doing business and created the development of the multimedia industry. The technological revolution is changing the lifestyles and the face of businesses and competition. Figure 3: Key Technological Forces 0 comment[s] \| back to top	PEST Analysis written on Sunday, January 13, 2013 @ 10:31 AM ✈ Pest Analysis As soon as the organization ha set its vision, mission and goals, the next stage in strategy formulation is the strategic analysis. This analysis encompasses the analysis of the external environment, organizational analysis, industry analysis and competitive portfolio analysis. The external or environmental factors are those forces outside the control of a single organization. PEST analysis is categorized into four board areas: Political, Economic, Social and Technological forces. Each of these forces has an impact on the key stakeholders of the organization, and subsequently provides favorable impact or unfavorable impact to the organization. For example, a change in the social trends like demographic patterns or baby boom may have implications to the existence of new consumers like new born babies. Political Forces Political forces are those factors have governmental relations or dealings, whether it is at the federal level, state level or the local government level. The political forces can refer to the laws and legislation or policies adopted by the government in power. These are factors that can provide favorable or unfavorable impact on the organization One of the main concerns in political forces is political stability. This refers to the extent in which the country has strong political support from the people or not. Political stability can provide strong foundations for business organizations to grow in the long run. One way of ensuring political stability is to get the voters mandate in the general elections, and reduce extreme political ideologies that can create instability. For example, the succession of Datuk Seri Abdullah Ahmad Badawi as Prime Minister of Malaysia from Tun Dr Mahathir Mohamed is important in assuring political stability in the succession of the nation’s leadership. The increasing number of terrorists and related activities in a country can also cause political upheaval and thereby reduce attractiveness of businessmen to invest in the region or country. Another impact area of concern in the political factors is the government regulations and deregulations policies. This is reflected by the new laws and legislations introduced to curtail the unhealthy activities in the business community. The introduction of special tariffs and by-laws also has an impact on business operation, like the service tax reforms introduced to all service organizations with a minimum sales volume. Economy Forces Economic forces are those factors that are related to the economic development and growth of a particular country. These are factors like gross national product (GNP) or gross domestic product (GDP) trends and growth rates, interest rates, money supply, inflation rates, unemployment rates, wage and price controls, level of disposable income, stock market trends, import and export factor, worker productivity, government budgets and many others. Figure 1 : Key Economic Forces Social Forces The social forces cover a broad spectrum of factors including cultural, demographic, and environmental factors. The social and cultural factors may refer to those forces like societal values, norms, culture, religion, language and attitudes, that may change or show preferences of one type over another. In a country where there are many ethnic groups for example Malaysia, which comprises ethnic groups like Malays, Chinese, Indians, Iban, Bidayuh, Kadazan, Bajau, and many others, social factors can pose difficulty when trying to cope with the changes in the environment. The social values of these ethnic groups are different to the extent that in trying to cope with the diverse cultures can be a challenging exercise. For example, the Malays are mainly Muslims, while the Chinese can be a Buddhist, Taoist, Christian or even Muslims. Similarly the Indians can be Hindus or Muslims or Christians. In this respect, when there is a greater awareness among the Muslims for the need to consume ‘halal’ products, business organizations have to respond effectively to this trend. Figure 2: Key Social Forces Technological Forces Changes in technology create new marketing opportunities when they are noticed by customers. Technology can influence marketing activities by making them more efficient and effective, such as computers tracking inventory. Advances in communication technology have made sales representatives more efficient and effective in their dealings with managers and customers, and the internet has become the backbone of today’s e-commerce system. In the last decade, the rate of technological changes has rapid. This is attributed to the many innovations and invention developed in an effort to improve the work and life of the community. Technological advancement as dramatically affected business organizations in terms of their products and services offered, and also their relations with other stakeholders and business practices. One major revolution in technology is the development of the internet. The internet has created the demand for e-business or e-commerce and the revolution on education through e-learning. The internet has also demonstrated the borderless way of doing business and created the development of the multimedia industry. The technological revolution is changing the lifestyles and the face of businesses and competition. Figure 3: Key Technological Forces 0 comment[s] \| back to top

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