*Management Tools (PEST)

*PEST ANALYSIS

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*PEST ANALYSIS

Environmental InfluencesOn Business Helps to Understand

*PEST ANALYSIS

*PEST ANALYSIS

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Understanding Environment

*Why Use PEST VisionMacro Factors Brainstorming Sessions Decision MakingBusiness leaders build their vision of futureWorkshopsDiffer per continent, Pest Analysis performed per countryMarketing & business development assessment

*THREE STAGE PROCESS

*PEST SUBJECTPEST subject - clear definition of market being addressed, which might be from any of following standpoints:Company looking at its market Brand in relation to its market Local business unit Strategic option, such as entering a new market or launching a new product Potential acquisition(achievement) Potential partnership Investment opportunity

*Scoring - Scientific MeasurementPEST analysis can be converted into scientific measurement by scoring items in each sections Scoring is particularly beneficial if more than one market is analyzed for purpose of comparing which market or opportunity holds most potential and/or obstacles

*POLITICAL ARENA(ground)

*Government type and stability

Freedom of press, rule of law and levels of bureaucracy and corruption

Regulation and de-regulation trends

POLITICAL ISSUESSocial & employment laws

*Tax policy

Environmental & Consumer-protection legislation

POLITICAL ISSUES

Safety regulations

Likely changes - political environment

*How stable is political environment? Will government policy influence laws that regulate or tax your business?What is government's position on marketing ethics? What is government's policy on economy? Does government have a view on culture and religion? Is government involved in trading agreements such as EU, NAFTA (North America free trade agreement), ASEAN (Assoc of South Asian Nations), or others?Questions to be Asked

*E-ECONOMIC FACTORSEconomy situation Economy trends Overseas economies and trends Interest and exchange rates Inflation ratesGeneral taxation issues Taxation specific to product/services Seasonality/weather issues Market and trade cycles Market routes and distribution trends Specific industry factors Customer/end-user drivers

*INTERNATIONAL COMMENTARIES-(E Factors Continued)Worlds second fastest growing economy after China is no longer India. (US financial wire service Bloomberg)

Pakistans economy posts historic gains Pakistan nearly defaulted and now one of Asias five fastest growing economies (Voice of America)

*BUDGET 2005-2006 COMMENTARIES (E Factors Continued)

The growth target for the year 2005-2006 is set out 8 per cent, the same as Chinas goal. Is Pakistan ready to sustain eight per cent growth year after year ?

*STATE BANK OF PAKISTAN (E Factors Continued)Governments sound economic policies provided launching pad for a dynamic take off potential for achieving significant growth rate

The SBP chief assessed Countrys economic growth rate is very encouraging and it is poised to generate good investment activities in Pakistan and create new jobs, which ultimately would prove to be a catalyst for alleviating poverty (Dr Ishrat Hussain Governor, State Bank of Pakistan)

*S- Social/sociological Factors Social factors include demographics (age structure of population; gender; family size; changing nature of occupations) trends in the way people live, work & think cultural aspects of macro environment

These factors affect customer needs size of potential markets

*Social/sociological Factors FACTORS -ContdPopulation growth rateMedia views Law changes affecting social factors Brand, company, technology image Income distribution Living conditions (housing, pollution)

*Social/sociological Factors Factors- contd7-Consumer buying patterns 8-Buying access and trends 9-Fashion and role models 10-Major events and influences 11-Ethnic/religious factors 12-Advertising and publicity

*Research funding Associated/dependent technologies Maturity of technologyManufacturing maturity and capacity Replacement technology/solutions Information and communications

Technological Factors

*7-Consumer buying mechanisms/technology 8-Technology legislation(laws) 9-Technology access, licensing, patents 10-Intellectual property issues(that is the result of creativity, such as patents, copyrights)11-Innovation potentialTechnological Factors(Continued)Innovation = Creativity x Risk Taking

*Technological Factors(Continued)Innovation might occur in the form of:Incremental progressQuantum leap

*Activity List the PEST factors influencing our:- AgricultureCNG StationsPetrol PricesConstruction IndustryWheat prices.Sugar AvailabilityTextile Industry.