Business Essay

832 Words 4 Pages
PEST analysis
Political changes relate to changes in government influence and can have huge significance for companies. Changes in the priorities for public spending or the UK 's relationships with other countries can open or close major markets. European Union (EU) regulations can have similar effects while the accession of new members (eg Poland) can bring business opportunities.
Political changes are closely tied up with legal changes. Laws are continually being updated in a wide range of areas, e.g. consumer protection legislation, environmental legislation, health & safety and employment law, etc.
Economic changes are closely related to social ones. The economy goes through a series of fluctuations associated with general booms
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All industries are influenced by PEST factors. For example, some of the PEST factors affecting the airline industry in recent years include: * Political: new European Union regulations have led to greater levels of competition on European routes. But increasing concerns are being raised about the environmental impact of aviation. * Economic: rising incomes and lower interest rates have meant that people have more disposable income to spend on luxuries like long distance air travel. * Social: increased popularity of holidays abroad has led to a boom in demand for air travel. * Technological: modern aircraft are more economic to run than in the past making possible cheap air travel.

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PESTEL analysis stands for "Political, Economic, Social, and Technological, Environmental and Legal analysis". It is a part of the external analysis when conducting a strategic analysis or doing market research and gives a certain overview of the different macroenvironmental factors that the company has to take into consideration. Political factors, or how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and

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