Loda

Pest Analysis, (2010) “Pest analysis is for Political, Economic, Social, and Technological analysis and helps to set a framework of macro-environmental factors used in the environmental scanning component of strategic management”.

Williams and Curtis (2007) that political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Specifically, political factors areas such as tax policy, labor law, advertising law, environmental law, trade restrictions, tariffs, and political stability Government plays an important role in the economy as well as in taxes to be charged to the company”. These factors also play an important role in the employment law, competition regulations as the company can not make specific prices as they have to follow the competition regulations.

“Economic factors have economic growth, interest rates, exchange rates and the inflation rate”. Pest Analysis, (2010) the factors have major impacts on how business works and decision making, example, interest rates affect a firm's cost of capital and therefore it affects the business and how will grow and expand. Exchange rates affect the costs of exporting goods and the supply and price of imported goods”. Economic factors affect the purchasing power of potential customers as the power to buy the product.

Social factors include the demographic and cultural aspects of the external microenvironment. Pest Analysis, (2010) social factors affect customer needs and the size of market as well on the demand for a company's products and how that company will perform. Companies change various management strategies to adapt to these social trends (such as recruiting older workers). Social factors affect the needs and wants of the customer and the way they buy a particular product, as the demand may decline with the new product which offered to the wrong age sector.

Pest Analysis, (2010) Technological factors can reduce the barriers to...