IB Business and Management External Environment IB Business and Management

Learning Outcomes Prepare a PEST analysis for a given situation and use it to analyse the impact of the external environment on a firm Evaluate the Impact on a firm’s objectives and strategy of a change in any of the PEST factors Explain how external opportunities and threats can impact on business decision-making and SWOT Analysis

Business Activity External Factors External Factors Finance Marketing Outputs Goods and services Inputs/ resources Land Labour Capital Enterprise The organisation People Production External Factors

Achieving business objectives…. In the pursuit of achieving their aims and objectives businesses face challenges and opportunities from outside the organisation…… We can call these PEST Factors (Or PESTLE, LEPEST)

So…. What does PESTLE mean? P E S T L A.K.A PEST, LEPEST, STEEPLE

PEST Analysis A PEST analysis of an audit of the external environment of a firm. External influences are outside of the control of the firm It involves trying to identify any potential Opportunities or Threats that the firm may be presented with

Why do a PEST Analysis? ‘Forewarned is forearmed’ What is the meaning of this saying? PEST may be done at any time but is particularly useful at times when strategic decisions are being made Could be done in general or for a specific industry

Task - Brainstorm What might these external factors be? Political Technological Social Economic

Political How and to what degree a government intervenes in the economy. Specifically, political factors include areas such as: Tax policy (Consumer and Corporate) Employment law Environmental law International trade restrictions Competition legislation Consumer protection Law Government attitude and procedures Political stability

Economic Economic Growth Monetary Policy (interest rates) Government Spending Unemployment Exchange rates Inflation Trade Cycle Consumer Confidence

Social Income Distribution Demographics (Age, Gender, Family Size, Occupations) Social Mobility Lifestyle Attitudes to Work and Leisure Fashions and Fads Attitude to work Living conditions

Technological Government spending on research R&D activity Speed of technology transfer New discoveries Rates of obsolescence Energy use and costs New materials Developments and availability of ICT Internet

Your Task…. We don’t have time to cover all of these PEST factors in detail. Over half term please read the ‘What you need to know’ document Add any questions you might have to the google doc ‘PEST Questions’ We will go through any questions after the holidays.