PEST ANALYSIS 19.01.11 - EXTERNAL ENVIRONMENT ANALYSIS 1...

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EXTERNAL ENVIRONMENT ANALYSIS 1. INTRODUCTION 2. MACRO ENVIRONMENT / PEST ANALYSIS 3. MICRO ENVIRONMENT ANALYSIS- INDIAN PRACTICE 4. INDUSTRY ANALYSIS / PORTERS’S FIVE FORCES MODEL 5. COMPETITION & HYPER COMPETITION
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PEST ANALYSIS (a) POLITICAL ANALYSIS 1. Political Stability 2. Risk of military invasion 3. Legal framework of contract enforcement 4. IPR protection 5. Trade regulations & tariffs 6. Favored trading partners 7. Anti – trust laws 8. Pricing regulations 9. Taxation – tax rates & incentives 10. Wage legislation – minimum wage & O.T. 11. Work week – no of working hours 12. Mandatory employee benefits 13. Industrial safety regulations 14. Product labeling requirements 15. Environment laws & regulations
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(a) ECONOMIC ANALYSIS 1. Type of economic system in countries of operation 2. Govt. intervention in the free market 3. Comparative advantages of host country 4. Exchanges rates and stability of host country currency 5. Efficiency of financial markets 6. Infrastructure’s quality 7. Skill level of work force 8. Labour costs 9. Business cycle stage (e.g. Prosperity, recession, recovery) 10. Economic growth rate 11. Discretionary income 12. Unemployment rate 13. Inflation rate 14. Interest rates
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(a) SOCIAL ANALYSIS 1. Demographics 2. Class structures 3. Education 4. Culture ( Gender roles, etc) 5. Entrepreneurial spirit 6. Attitudes (health, environmental consciousness, etc) 7. Leisure interests
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(a) TECHNOLOGICAL ANALYSIS 1. Recent technological developments 2. Technology’s impact on product offering 3. Impact on cost structure 4. Impact on value – chain structure 5. Rate of technological diffusion
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ENVIRONMENT SECTORS INDIAN COs FOCUS UPON ENVIRONME NT SECTORS DIXIT (1987) (N=24) SUBRAMANIA M (1989) (N=16) SHAH (1996) (N=61) OVERALL RANKING Market 1 1 1 1 Supplier 2 nc 2 2 Technological nc 2 3 3 Economic 4 3 4 4 Regulatory 3 4 5 5 Political 6 5 6 6 Socio- cultural 6 6 7 7 International 5 nc 8 8
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1 FACTORS RELATED TO MARKET ENVIRONMENT 1. CUSTOMER OR CLIENT FACTORS; 2. PRODUCT FACTORS; 3. MARKETING INTERMEDIARY FACTORS; & 4. COMPETITOR RELATED FACTORS.
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2 FACTORS RELATED TO SUPPLIER ENVIRONMENT 1. COST, AVAILABILITY & SUPPLY OF RAW MATERIALS, SUB ASSEMBLIES, PARTS & COMONENTS. 2. COST & AVAILABILITY OF FINANCE 3. COST , AVAILABILITY & RELIABILITY OF ENERGY 4. COST , AVAILABILITY & QUALITY OF HUMAN RESOURCES 5. COST & SOURCES FOR SUPPLY OF PLANT & MACHINERY, SPARE PARTS & AFTER – SALES SERVICE. 6. INFRASTRUCTURAL SUPPORT , AVAILABILTY OF DIFFERENT FACTORS OF PRODUCTION, BARGAINING POWER OF SUPPLIERS & THE EXISTENCE OF SUBSTITUTES.
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3 FACTORS RELATED TO TECHNOLOGICAL ENVIRONMENT 1. SOURCES OF TECHNOLOGY; 2. TECHNOLOGICAL DEVELOPMENT; 3. IMPACT OF TECHNOLOGY; & 4. COMMUNICATION & INFRASTRUCTURAL TECHNOLOGY
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