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learnppt.com PowerPoint Diagram Pack PEST Analysis Check out our site for all your PowerPoint needs! http://learnppt.com – Find our eBook on creating effective and professional presentations. Covers basic to advanced concepts, including storyboarding, diagramming, and the Consulting Presentation Framework. http://learnppt.com/powerpoint -- Shop our catalog of Diagram Packs. We try to add more Packs monthly. All of our diagrams are professionally designed by ex-management consultants from top firms. PEST (Political, Economic, Social, and Technological) analysis is a framework evaluating macro-environmental factors used in the environmental scanning component of strategic management. The PEST analysis framework has become increasingly popular and relevant as the first decade of the 21st century have given rise to green business and environmental concerns from the public. Government and Regulatory Intervention Technological and Social Change Macroeconomic Influences

PEST (Political, Economical, Social, Technological) Analysis

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PEST (Political, Economic, Social, and Technological) analysis is a framework evaluating macro-environmental factors used in the environmental scanning component of strategic management. The PEST analysis framework has become increasingly popular and relevant as the first decade of the 21st century have given rise to green business and environmental concerns from the public. This is a partial preview of the document. View and download the full PowerPoint here: http://learnppt.com/powerpoint/35_PEST-Analysis.php

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Page 1: PEST (Political, Economical, Social, Technological) Analysis

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PowerPoint Diagram Pack

PEST Analysis

Check out our site for all your PowerPoint needs!

• http://learnppt.com – Find our eBook on creating effective and professional presentations. Covers basic to advanced concepts, including storyboarding, diagramming, and the Consulting Presentation Framework.

• http://learnppt.com/powerpoint -- Shop our catalog of Diagram Packs. We try to add more Packs monthly. All of our diagrams are professionally designed by ex-management consultants from top firms.

PEST (Political, Economic, Social, and Technological) analysis is a framework evaluating macro-environmental factors used in the environmental scanning component of strategic management. The PEST analysis framework has become increasingly popular and relevant as the first decade of the 21st century have given rise to green business and environmental concerns from the public.

Government andRegulatoryIntervention

Technologicaland Social

Change

MacroeconomicInfluences

Bargaining

Power of

Customers

Direct Rivalry

Among

Competitors

Threat of

Potential

Entrants

Bargaining

Power of

Suppliers

Threat of

Substitutes

Page 2: PEST (Political, Economical, Social, Technological) Analysis

2Questions & feedback? Email me – [email protected] diagrams in this pack are to be used by the original buyer only.

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PEST analysis—introduction

Introduction

• Determines the influence of macro-environmental trends in markets where the firm competes

• There are four primary macro-environmental trend categories:

• Political trends determine the likely outcome from a legislative body

• Examples: industry regulation or deregulation, environmental or tax legislation, monetary policy (tight vs. loose), tariffs, domestic-content rules, and legal opinions

• Economic trends include broad measures of economic health

• Examples: GDP growth, unemployment levels, inflation, foreign currency exchange rates, balance of trade, availability of labor and raw materials

• Social trends reflect cultural and demographic influences

• Examples: culture includes clothing fashions, buying habits, etc.; demographics includes the age, income, education, and geographic location of customers and employees

• Technological trends include innovations that impact products and manufacturing processes of client

• Examples: technologies in design of physical product or information flow surrounding the physical product, design of production processes

• The PEST framework:

– Presents the characteristics of each of these forces (as well as their evolutions).

– Explains how those forces affect:

• Competitive environment (as described by Porter through his five forces).

• Industry value chain.

• Industry financials.

Introduction to PEST Analysis

THIS IS A PARTIAL PREVIEW

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Page 3: PEST (Political, Economical, Social, Technological) Analysis

3Questions & feedback? Email me – [email protected] diagrams in this pack are to be used by the original buyer only.

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PEST analysis—introduction

Why We Use It

• Complement other industry analysis frameworks.

• Explain ongoing changes in the industry.

Strengths & Limitations

Benefits:

• Provides a framework for conducting a scan of the macro-environment in the initial stages of strategic planning and analysis engagements

• Contributes to the identification of value drivers and critical success factors in an industry

• Provides valuable input to game theory analyses or other strategy development efforts

• Can be conducted at varying levels of detail

• Supports scenario-based strategic planning efforts

Limitations:

• Qualitative and subjective nature of the results can lead to vague, incomplete or inaccurate plans

• Requires considerable data collection and trend verification efforts that can be time-consuming

Further Details

THIS IS A PARTIAL PREVIEW

You can preview the full PowerPoint document and download it at http://learnppt.com/powerpoint/

Page 4: PEST (Political, Economical, Social, Technological) Analysis

4Questions & feedback? Email me – [email protected] diagrams in this pack are to be used by the original buyer only.

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Macro-environmental Trends Influence All Industry Players Equally*

Macroeconomic Influences

Government andRegulatoryIntervention

Technological andSocial Change

Source: Adapted from George Day, Market Driven Strategy, 1990

BargainingPower ofCustomers

Direct RivalryAmongCompetitors

Threat ofPotentialEntrants

BargainingPower ofSuppliers

Threat ofSubstitutes

* Macro-environmental trends are represented by the sides of the triangle

Environmental Trend Analysis

PORTER’S 5 FORCESTHIS IS A PARTIAL PREVIEW

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Page 5: PEST (Political, Economical, Social, Technological) Analysis

5Questions & feedback? Email me – [email protected] diagrams in this pack are to be used by the original buyer only.

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The approach to complete Environmental Trend Analysis* has 3 key components

* Environmental Trend Analysis is an iterative process. Data collection leads to research, which raises additional questions and leads to additional research. This process continues until the analyst is confident the major macro-environmental trends have been identified.

DataCollection

IndustryTrend Analysis

TrendQuantification

1 2 3

• Conduct both primary and secondary research

• Understand and evaluate the industry structure

• Analyze the competitive environment

• Analyze data from clients and competitors (e.g. sales, growth)

• Determine trends in data

Approach to Environmental Trend Analysis

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Page 6: PEST (Political, Economical, Social, Technological) Analysis

6Questions & feedback? Email me – [email protected] diagrams in this pack are to be used by the original buyer only.

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Trend analysis begins with Data Collection

Environmental trend analysis is basically a massive data collection effort

To focus trend analysis, begin with an analysis of competitor trends

– Limit the number of competitors analyzed to a relevant sample to ensure the necessary level of detail is reached*

– Identify the number, size, consolidation, vertical integration and rivalry of competitors in the markets under analysis

– For each competitor, focus on the relevant performance characteristics:

Production capabilities (technologies)

Capacity utilization

Cost structure

Strategy (low cost versus differentiation)

Stated versus implied intentions

Joint venture/alliance strategies

“Reaction profile”

Then, search for macro-environmental trends to explain competitors strategic actions (e.g. political, economic, social, technological)

DataCollection

IndustryTrend Analysis

TrendQuantification

1 2 3Data Collection (1 of 2)

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Page 7: PEST (Political, Economical, Social, Technological) Analysis

7Questions & feedback? Email me – [email protected] diagrams in this pack are to be used by the original buyer only.

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An effective tool for presenting the results of trend quantification is the Trend Summary Matrix

Trend Summary Matrix TemplateData

CollectionIndustry

Trend AnalysisTrend

Quantification

1 2 3

#KEY MARKET

TRENDS

EVICENCE OF OBSERVATIONS

OF TRENDS OPPORTUNITIES THREATS

STRATEGIC HYPOTHESES

COMPETITIVE ADVANTAGE GAINED?

1. e.g. Historically fragment industry is beginning to consolidate

e.g. Top three competitors have taken a combined 60% market share

e.g. Acquisition of smaller companies

e.g. Vertical integration may increase supplier power

e.g. Should create long-term arrangements with customers

e.g. Can erect strong barriers to entries—also, many smaller players cannot compete in consolidation stage of industry growth

2.

3.

4.

5.

IMPLICATIONS

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Page 8: PEST (Political, Economical, Social, Technological) Analysis

8Questions & feedback? Email me – [email protected] diagrams in this pack are to be used by the original buyer only.

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END OF PARTIAL PREVIEW

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Page 9: PEST (Political, Economical, Social, Technological) Analysis

9Questions & feedback? Email me – [email protected] diagrams in this pack are to be used by the original buyer only.

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