Essay on PEST analysis

Topics: Economics, Macroeconomics, Airline Pages: 2 (563 words) Published: December 28, 2013
What factors would you include in a PEST analysis and how might you collect the data necessary to conduct one? A market is composed of individuals or organisations who are interested in and willing to buy a good or service to obtain benefits that will satisfy a particular need or, who want and have the resources to engage in such a transaction. Therefore, it is important for a company to understand market attractiveness. Assessing market attractiveness requires that important macro environmental trends be noticed and understood. The PEST analysis can be used as a framework for assessing market attractiveness at a macroeconomic level. The elements that would be included in a PEST analysis are: political (focusing on regulatory), economics, sociocultural (including demographics and social trends) and technological (including the natural environment). There are various methods to collect the necessary data such as conducting market research or using internal records. In every country and across some countries – those that are members of the EU, for example – there is a regulatory environment within which local and multinational firms operate. Political, legal and regulatory trends can have a powerful impact on market attractiveness. The power of deregulation to influence market attractiveness is now well-known. Government, business, and the general public throughout much of the world have become increasingly aware that overregulation protects inefficiencies, restricts entry to new competitors, and creates inflationary pressure. In the United States, airlines, trucking, railroads, telecommunication, and banking have been deregulated. Markets are also being liberated in Western and Eastern Europe, Asia and many developing countries. Trade barriers are crumbling due to political unrest and technological innovation. Deregulation has typically changed the structure of the affected industries as well as lowered prices, creating rapid growth in some markets as a result....
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