By Jason Winicki, Joseph Reid, Britney Mui, and Akrem Mohammed

*PEST Analysis

*What Is a PEST Analysis

PEST analysis is one tool of strategic

management which scans the business and

market environment to enable the firm to

understand the surroundings it is operating or

which it intends to enter.

*PEST

is an acronym for Political, Economic, Social, and Technological.

PESTEL- LEGAL AND ENVIRONMENTAL

*Political Environment

Refers to all those things pertaining to and committed by the government that affect the economy and business in general. Government regulations and policies that impact the business environment the most may include trade and labour laws, tax policies, environmental laws and regulations, trade restrictions, health restrictions, commercial tariffs, infrastructure and development policies, and so on. 

*Economic environment

Refers mostly to the macroeconomic factors as they may have a high impact on the business environment. Although, a firm does not have any control over them. The most it can do is modify and adapt its business strategies and various commercial and financial policies accordingly to make the most of the economic situation. These economic factors may include the currency exchange rate, interest rate, economic growth rate, rate of inflation.

*Social environment

Refers to the social, religious and cultural aspects of the business environment that may be affected by, and may react to, the firm's transitional strategies either positively or negatively. These may include demographic aspects like age distribution, population growth rate, employment and income statistics, education and career trends, religious beliefs and social stigmas, overall general attitude (conservative or liberal), etc.

*Technological environment

Refers to the technical aspects of the business environment and may include the level of automation available in the current times, technical facilities and infrastructure, rate of technological progress and research and development activities. These factors may assume decisive proportions and may impact the cost, quality and scope of innovation for a product, service or commercial utility. 

*PEST Analysis Case (Deli Delight)

*Political

*Government regulations regarding hygiene, health and food regulations, and food standards*Economic policies of government

regarding the restaurant industry and running eating joints; these may include licenses, inspections by Health and Food Ministry departments

*Economic

*Interest rate would impact the cost of capital, the rate of interest being directly proportionate to the cost of capital*Rate of inflation determines the rate of remuneration

of employees and directly affects the price of the restaurant's products. Again, the proportion between the inflation rate and wages/prices is direct*Economic trends act as an indicator of the

sustenance and profitability of your business in the chosen region and help you in deciding your marketing strategy

*Social *Certain cultures abhor certain foods. For instance,

Hindus will not eat beef and Muslims would not even touch pork. Therefore knowledge of these cultural facts about your business environment will help you decide whether or not you'll be able to do any business there*Eating habits of the people in your chosen business

environment may, and certainly will, affect your marketing decisions*Ratio of people preferring to eat out regularly

*Social-continued

*Trends in society right now, sandwiches are a big thing in the fast food industry with subway as the number 1 fast food restaurant*We live in a more health conscious society

therefore more people would tend to eat a sandwich as opposed to perhaps a burger and fries*Demographics: who will you target?*Perhaps a language/culture barrier. From what

ethnic background do most of your customers come from?

*Technological

*A good technical infrastructure would lead to better production, procurement and distribution logistics, resulting in reduced wastage and lower costs*Sound technology may be a decisive factor for food

technology innovation, better presentation, more effective business marketing.

*The End

Thank you for your time and participation. We greatly appreciate it. Have a great day!