Global Business Environment: PEST Analysis and Market Strategies

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Trends in the Global Business Environment
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Trends in the Global Business Environment
Executive Summary
The paper will focus on various macro-environmental factors, which helps the organization to
realize the revenant consumer behavior of the specific market segments. Further, academic
literature is illustrated to depict the impact of PEST factors in business development
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Trends in the Global Business Environment
Table of Contents
Introduction......................................................................................................................................3
a) Discovery of various macro environmental trends in globalization............................................4
Analysis.......................................................................................................................................5
Evaluation....................................................................................................................................5
d) The familiarity and impact of the macro environmental factors and sustainable learning.........6
Conclusion.......................................................................................................................................8
Reference.........................................................................................................................................9
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Trends in the Global Business Environment
Introduction
The social, political, technical and economic factors play a vital role in flourishing a business.
These macro environmental factors are uncontrollable and make a huge influence on corporate
decisions. However, if an organization discovers the relevant factors and its impact properly,
they can make effective changes in the company and thus certain competitive features can be
developed. The analysis and evaluation of macro environmental trends help to globalize a
company in an effective manner. The papers will highlight how management and marketers
perform proficient research regarding these factors and the influence of this learning
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Trends in the Global Business Environment
a) Discovery of various macro environmental trends in globalization
In term of globalization or expansion of business in various countries, the business manager
should thoroughly discover the associated macro factors. PEST trends can be described as
follows:
Political: Various countries across the globe have different local or political conditions. Some
countries high have high corruption, economic instability or terrorism issues. None of these
conditions is appropriate for developing a sustainable business in those countries (Barinova,
2017). Besides, national trading or business policies can put a drastic impact on business.
Complex investment or taxation policies often create disinterest of foreign investor and such
political factors can impinge on business. Political stability often supports the globalization and
thus competition can be easily eliminated. However, marketing executives or management
should cautiously investigate such issues before developing business.
Social: Cultural and social factors vary in different parts of the world. Each country has different
perspectives on religion, which can certainly influence the workplace as well as business. It also
influences the team engagement and various business processes. If the government or society
encourages such issues, business expansion can be drastically affected. For making a sustainable
business, the enterprises must understand the social or cultural aspects of the country and
develop products or business policies accordingly. Demographic factor, socio-economic factors
are an integral part of social factors (Sharma, 2015).
On the other hand, various social disturbances like communal riots and religious conflicts can
create a harsh impact on business development policies. Usually, food and clothing industries are
most affected by social factors. However, other businesses also can be similarly exaggerated, if
people or government of the targeted countries does not like the immigrated entrants in a positive
way. Different types of the socio-cultural environment affect the business in deferent manners.
For example, the agricultural economy and the industrial economy does not have a similar
perspective on business development (Krizanova et al. 2016).
Economic: In order to establish a business in a specific country, the economic or financial
condition must be analyzed properly. If citizens do not have sufficient income or resource to pay
for high quality products, the supply requirements will be affected. Thus, the market growth or
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Trends in the Global Business Environment
globalization policies of a firm can be severely affected. However, negative economic conditions
might increase GDP (Gross Domestic Product) rate and thus the foreign business can obtain
significant advantage (Minbashrazgah, Zarei, and Ghazvini, 2017). Besides, the taxation policies
and economic debt also play a huge impact on the business.
Technical: Availability of latest technologies like network peripherals, tablets, smart phones,
and other IoT components can help to expand business and product awareness in specific regions
of the world. However, if people of those regions do not have any idea regarding such
technologies, it can adversely influence in communication. Besides, technologies also help in
production, human resource management and other various business aspects (Feimi, Kume, and
Pulaj, 2016). Thus, the absence of technologies in a certain market segment or country can create
an adverse effect on the globalization.
Analysis
Even though PEST factors are unmanageable aspects in business, the business managers can
grasp the positive and negative impact of these factors and accordingly adjust the business or
marketing strategies. The different age group has different demands and expectation from a
certain business. The marketers or managers must realize their characteristics by examining the
social or cultural interests of the specific country (Stockil, 2016). Besides, the analysis of factors
helps to realize financial condition or affordability of the target customers, which can surely help
to determine the pricing factors. Similarly, the technological factor can either amplify business
expansion or make pessimistic blow in globalization. Besides, the political factor can also offer a
sanguine contribution to business growth, while political and local authorities support the
business.
Evaluation
Social, political, economic and technical factors can offer negative as well as a positive influence
on certain businesses. Proper study or investigation of macro factors can guide the marketers to
make an effective business decision for betterment of the business. According to the PEST
analysis outcome, the management can alter the business plans and implement new strategies or
machinery to enhance business quality (Hollins et al. 2016). Such a strategy will surely help the
business to grow its profitability ratio in a positive way.
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Trends in the Global Business Environment
d) The familiarity and impact of the macro environmental factors and
sustainable learning
Students in business schools, as well as managers, can study various kinds of the literature of
globalization and get an effective idea of macro environmental factors. For example, the
following literature is selected to realize the impact of PEST factors in globalization.
According to Krizanova et al (2016), PEST factors, Privatization, Globalisation, and
Liberalisation can make a huge impact on international trade. The author has selected the global
market to examine the relevant PEST factors and the associated influence of the automotive
industry. The paper investigates the luxury car industry and potential consumer behavior. The
author highlighted that a massive amount of the population is young, and they like economic
products, which increase the demands of such items. The social and cultural interest has
encouraged foreign and domestic brands to generate various quality cars. In the literature,
various aspects of globalization are highlighted. It is highlighted that political stability and an
appropriate legal environment can benefit business growth. If politicians of a country do not
support violence and controls such aspects in a strict manner, the business can effectively grow.
Besides, a government with no bureaucracy can support the positive expansion of the business.
On the other hand, the economic environment can be divided into various categories like the
industrial economy, agrarian economy, and export based economy. Usually, the agrarian
economy is determined as a low-level economy with fewer marketing opportunities. The export
based economy has a high opportunity for business. Similarly, the industrial economy also has
proficient business demand, which helps the business for effectual growth.
On the other hand, social and cultural factors are classified into various distinguished types like
national factors, emotional factors, demographic factors, geographical factors, and religious
factors. Such factors help the business managers to determine consumer behavior. These factors
also categorize consumers in various distinguished age groups. The technological environmental
factors define the modern facilities that intensify the market for effective business growth. The
paper has highlighted the various impact of PEST factor in various European Union counties and
certain Asian counties. Here, the relevant data of PEST factors are gathered through magazines,
periodicals, commerce publications, trade publications, newspapers, and certain business
magazines.
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Trends in the Global Business Environment
Moreover, the paper investigates a global environmental analysis, which shows various
influences of business activities and possible ways to control them. Further, various market
intermediaries, suppliers, and competitors are examined to realize the affirmative or negative
impact on business. Determining the adequate understanding of PEST factors can help the
business organizations to develop sustainable (long-term) relationships with the stakeholders,
investors or business associates (suppliers and vendors). Simultaneously, a SWOT analysis helps
to identify the revenant strength and weaknesses of the organizations and thus it can be used to
flourish marketing. Besides, recognizing the weaknesses help to improve those factors. In the
meantime, various opportunities and threats can be identified, which might help to improve
marketing policies.
Thus, the above academic literature offers a deep idea about the macro environmental factors
along with its associated impact on business development (Barkauskas, Barkauskienė, and
Jasinskas, 2015). The paper strongly focused on the globalization aspects of organizations, which
can educate students regarding potential challenges in business expansion. Besides, the papers
have also clarified the opportunities and challenges in the European countries, China and some
other parts of the world (RICART and REY, 2017). Thus, the marketers can create affective
marketing strategies to win over these segments. Similar idea can also can be used to make
sustainable consumer relations in various parts of the world and thus globalization can be
successfully accomplished.
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Trends in the Global Business Environment
Conclusion
It is realized that the PEST factor has a significant impact on business development and
determining effective marketing strategies. If the marketing managers realize the influence of
social, technological, economic, and political factors effectively, they can modify or improve the
quality of products according to the requirements. Thus, they can attract potential investor and
consumers to expand the business. It also helps to develop certain operational strategies with
proper economic scale. However, it is recommended that the manager or employees should
discuss among them while deciding certain globalization strategies. Further, appropriate market
planning and forecast is required to triumph over the competitors. Moreover, technological
factors must be properly used to draw the attention of various consumers in the global
environment.
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Trends in the Global Business Environment
Reference
Barinova, S., 2017. Influence of macro-environmental climatic factors on the distribution and
productivity of freshwater algae. Int J Environ Sci Nat Res, 4(1), pp.1-5.
Barkauskas, V., Barkauskienė, K. and Jasinskas, E., 2015. Analysis of macro environmental
factors influencing the development of rural tourism: Lithuanian case. Procedia-Social and
Behavioral Sciences, 213, pp.167-172.
Feimi, D., Kume, V. and Pulaj, E., 2016. Macro environment and innovation in the service
sector. The evidence from Albanian context. European Journal of Sustainable
Development, 5(2), pp.137-142.
Hollins, P., Riestra, R., Hernandez, M., Becker, J. and Santos, P.A., 2016. D7. 2-Summary report
of Value Chain analysis.
Krizanova, A., Majerova, J., Bugaj, M. and Madlenak, R., 2016. International environment
analysis: basic assumption for effective international marketing in a globalized economy.
Autobusy: technika, eksploatacja, systemy transportowe, 17.
Minbashrazgah, M.M., Zarei, A. and Ghazvini, H., 2017. Identifying and Prioritizing Indicators
of Macro-Environmental Factors in Entry of Semnan Plaster Plants into the Markets of
Neighboring Countries. International Journal of Environmental and Science Education.
RICART, J.E. and REY, C., 2017. Strategising for the future. The European Business Review,
pp.7-11.
Sharma, H., 2015. A Study of Demographic Characteristics Influencing Consumer Behaviour
Regarding Premium Car Brands. PACIFIC BUSINESS REVIEW INTERNATIONAL, 8(4), pp.17-
30.
Stockil, A.D., 2016. Construction and validation of a theoretically derived PEST analysis type
tool for LED community entrepreneurship programmes in South African rural
economies (Doctoral dissertation).
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