Pest analysis

PEst for mba

1. PEST ANALYSIS Made By: Subir K. Majumdar Pretam Sarkar Sanjana Lakra Srishti Dey

2. INTRODUCTION An organisation’s success is influenced by factors operating in it’s internal and external environment; an organisation can increase it’s success by adopting strategies which manipulate these factors to it’s advantage. A successful organisation will not only understand existing factors but also forecast change, so that it can take advantage of change within the environments in which it operates. PEST analysis is used to identify the external forces affecting an organisation .This is a simple analysis of an organisation’s Political, Economical, Social and Technological environment. A PEST analysis incorporating legal and environmental factors is called a PESTLE analysis.

3. PEST – AN ACRONYM P for POLITICAL FACTORS E for ECONOMIC FACTORS S for SOCIAL FACTORS T for TECHNOLOGICAL FACTORS

4. POLITICAL FACTORS Legislation such as the minimum wage or anti discrimination laws . Voluntary codes and practices Market regulations Trade agreements, tariffs or restrictions Tax levies and tax breaks Type of government regime eg communist, democratic, dictatorship

5. ECONOMIC FACTORS Home economy situation and trends Overseas economies and trends General taxation issues Market routes and distribution trends Interest and exchange rates International trade/monetary issues

6. SOCIAL FACTORS Lifestyle trends Demographics C onsumer attitudes and opinions Brand , company, technology image Consumer buying patterns Fashion and role models Ethnic/religious factors Advertising and publicity Ethical issues

7. TECHNOLOGICAL FACTORS Competing technology development Associated/dependent technologies Replacement technology/solutions Manufacturing maturity and capacity Information and communications Technology access, licencing , patents Consumer buying mechanisms/technology

8. CASE STUDY – MCDONALD’S

9. POLITICAL CHALLENGES Health and Safety Guidelines fast food consumption has been shown to increase calorie intake, promote weight gain and elevate risk for diabetes criticised for caloric content, trans fats and portion sizes Ecological/environmental issue one of the largest consumers of paper products in the US leading to millions of pounds of food packaging waste littering r oadways , clogging landfills and spoiling quality of life.

10. POLITICAL CHALLENGES contd Home market and international pressure-groups pushing for increased regulations to make companies more responsible Wars and conflicts    war between countries where the company operates s ymbol of capitalism

11. ECONOMIC CHALLENGES l ow set up costs leading to rapid expansion keeping the prices low for the customers. franchising facilitates set ups McDonald’s corporation provides financing assistance and training for new franchise owners to manage cash flow and keep businesses profitable.

12. SOCIAL CHALLENGES Health fears customers now opting for more healthier options like SUBWAY which offers more variety for health conscious customers. Emphasis on food safety

13. TECHNOLOGICAL ADVANTAGES Streamlining of processes to improve efficiency through technology enhancements such as FPI's Help Desk Service, network and application consolidation and other technology implementations, operations of the company are greatly improved Marketing done by means of television advertisements Implemented technology to improve supply chain management

14. STRATEGIES ADOPTED McDonalds changed its image vastly by evaluating the current menu and making changes to it from using organic products to revising the whole menu entirely by offering salads and vegetarian burgers. The accurate and accessible nutrition information help guests make informed menu choices. Incorporated safety management systems, including Good Manufacturing Practices (GMP), a verified Hazard Analysis Critical Control Point (HACCP) plan and crisis management, food security and other applicable programs

15. STRATEGIES ADOPTED Increase presence in Asian countries When the first McDonald's opened in Beijing more than a dozen years ago, 40,000 people lined up to observe a Big Mac. It is growing faster in China than in the United States. It owns & operates more than 600 stores across 105 cities in China. More than 100 more McDonald's stores will be added annually to Chinese cities within the coming years . Locally focused menu choices In India – McAloo Tikki , Paneer Salsa Wrap, McVeggie In China - Szechwan-style spicy chicken wings, seafood soup, oriental sauces etc

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