In this study, we are going to analyze the internal and external market environment of Zara and sharing some suggestions that the company should consider continuing their success. For the purpose of the study, the data presented here, is collected from various published sources and different case studies conducted on Zara.
Political factors are basically how the government intervenes in the economy. Specifically, political factors have areas including tax policylabour lawenvironmental lawtrade restrictionstariffsand political stability.
Political factors may also include goods and services which the government aims to provide or be provided merit goods and those that the government does not want to be provided demerit goods or merit bads.
Furthermore, governments have a high impact on the healtheducationand infrastructure of a nation. Pestle analysis in egypt factors include economic growthinterest ratesexchange ratesinflation rate.
These factors greatly affect how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates can affect the costs of exporting goods and the supply and price of imported goods in an economy.
Social factors include the cultural aspects and health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety.
High trends in social factors affect the demand for a company's products and how that company operates. For example, the ageing population may imply a smaller and less-willing workforce thus increasing the cost of labour. Furthermore, companies may change various management strategies to adapt to social trends caused from this such as recruiting older workers.
These can determine barriers to entryminimum efficient production level and influence the outsourcing decisions. Furthermore, technological shifts would affect costs, quality, and lead to innovation.
Legal factors include discrimination lawconsumer lawantitrust lawemployment lawand health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.
Environmental factors include ecological and environmental aspects such as weather, climate, and climate changewhich may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.
Other factors for the various offshoots include: Demographic factors include gender, age, ethnicity, knowledge of languages, disabilities, mobility, home ownership, employment status, religious belief or practice, culture and tradition, living standards and income level.
Regulatory factors include acts of parliament and associated regulations, international and national standards, local government by-laws, and mechanisms to monitor and ensure compliance with these.
Inter-cultural factors considers collaboration in a global setting. The security environment may include either personal, company, or national security.
Other business-related factors that might be considered in an environmental analysis include Competition, Demographics, Ecological, Geographical, Historical, Organizational, and Temporal schedule.
For example, consumer and B2B companies tend to be more affected by the social factors, while a global defense contractor would tend to be more affected by political factors. Additionally, factors that are more likely to change in the future or more relevant to a given company will carry greater importance.
For example, a company which has borrowed heavily will need to focus more on the economic factors especially interest rates. Furthermore, conglomerate companies who produce a wide range of products such as Sony, Disney, or BP may find it more useful to analyze one department of its company at a time with the PESTEL model, thus focusing on the specific factors relevant to that one department.
A company may also wish to divide factors into geographical relevance, such as local, national, and global.Egypt has been the main mediator in the political rapprochement between Hamas and the Palestinian Authority.
The country also sided with Saudi Arabia, one of its allies in the Qatar crisis since it was part of the Arab countries other than those of the Gulf Cooperation Council having boycotted the Emirate.
PEST is an acronym for four sources of change: political, economic, social, and technological.
PEST analysis is a powerful and widely used tool for understanding strategic risk. It identifies the. PESTLE - Macro Environmental Analysis. The PESTLE Analysis is a framework used to scan the organization’s external macro environment.
The letters stand for Political, Economic, Socio-cultural, Technological, Legal and timberdesignmag.com approaches will add in extra factors, such as International, or remove some to reduce it to PEST.
The PESTLE analysis will help to analyze the impact of political, social economic, legal, environmental and technological factors of UK economy on the operating process Sainsbury in the competitive market. Science Direct contains abstracts and full-text articles from scientific, technological, and medical scholarly journals and reference books.
Subjects covered include. a PEST analysis is helpful prior to completing a SWOT analysis (a SWOT analysis - Strengths, Weaknesses, Opportunities, Threats - is based broadly on half internal and half external factors). A PEST analysis measures a market; a SWOT analysis measures a business unit, a proposition or idea.