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Pest And Swot Analysis

INFORMATION PAPER Marketing Management
‘PEST’ ANALYSIS AND FIVE FORCES ANALYSIS

June 2008

Momtchil Krastev m.krastev@clusterstar.com

Profit Center Sofia London School of Economics

Information Paper The Firm and the Environment – A fictive amusement park in the UK PEST Analysis and Five Forces Analysis

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PEST Analysis
PEST analysis is concerned with the environmental influences on a business. The acronym stands for the Political, Economic, Social, and Technological issues that could affect the strategic development of a business. According to the Internet Centre for Management and Business Administration, Anon (2003), identifying PEST influences is a useful way of summarising the external environment in which a business operates. However, it must be followed up by consideration of how a business should respond to these influences. PEST analysis has the very important role to identify the opportunities and the threats from the macro environment of a business.

Political Analysis The PEST analysis of a business usually begins with examination of the political issues that may affect it. According to Doyle (1994), those issues may include: the environmental regulation and protection; corporate and consumer taxation; governmental influence on supply and demand; government legislation; and competition regulation. The political environment influences demand in several ways. Government legislation influences all that can and cannot be bought and in what circumstances. Also, government plays a role in determining the distribution of wealth and income in the country through taxation and the welfare system. On the other hand, there are three main ways in which government affects supply. Firstly, government can...