PEST factors refer to the political factors, economic factors, societal factors and technological aspects that determine the outcome of business prospects in organizations. It is always important for a business entity to carry out an assessment and evaluation of its market positioning strategies. Indeed, all aspects of marketing planning should always be representative of the true reflection of the current external environment of the organization. This evaluation focuses on the significant aspects of microenvironment and macro-environment and their impact on organizational strategic plans.
External marketing environment of an organization refers to those factors from outside which determine the organization's day to day activities. The environment consists of different factors that combine to form other elements of marketing that are not controllable thus forming limits on the parameters within which marketing strategists are able to execute their plans.
[...] Implications of the Microenvironment in Organizational Marketing Audits The microenvironment factors of a business organization hold the significance of being the factors that are close to the company that bear direct consequences over the company's ability to manage and maintain its markets. The evaluation of an organization's microenvironment can be achieved through the Porters five forces analysis approach. The five forces approach is a viable tool for evaluating business strategy development. The analysis of porter's five forces enables marketing strategists to identify and pursue competitive environments (Porter, 1980). [...]
[...] The PEST analysis identifies nature changes, radical changes, gradual changes, policy changes, and changes in foreign governments to be the key political factors that influence marketing and business planning in organizations. Whereas a company may enjoy peaceful political environment in the home country, the international scene myriads of challenges and business uncertainties that are posed by political factors such as terrorism and human rights issues. The Impact of Economic Factors The execution of marketing plans in an organization should always take into account the elements that characterize a trading economy with focus short- term based and long-term-based interests (Wilson & Gilligan, 1999). [...]
[...] Significance of the Macro-Environment Forces in Marketing Audit The macro-environment refers to the key aspects of the organization that are most affected and determined by the status and direction of the PEST factors Hunger & Wheelan (2003). PEST is a synonym that stands for political forces, economic forces, social forces and technological forces in a business organization's environment. As such, the macro-environment forces are the main determinants that influence of PEST factors in business organizations. Proper evaluation and analysis of the macro environmental forces in the organization's external environment goes along way in determining the success or failure of the marketing strategies adopted by an organization (Wilson, 1982). [...]
[...] Conclusion The PEST factors evidently bear very significant influence over the strategic approaches towards marketing and planning in organizations. This demonstrates how important it is for companies to take into account all the important aspects of the environment whenever undertaking organizational planning and environmental audits. Each and every element of the organizational strategies should always be accorded full attention in order to ensure successful achievement of the set goals and objectives (Peters & Waterman, 1982). Factors such as the stakeholders, partnerships and industry life cycles must also be tailored to suit the strategic needs in business organizations as situations may demand. [...]
[...] M. (2005). Contemporary strategy analysis. Oxford: Blackwell Publishing Ltd. Hunger, J. D. & Wheelan, T.L. (2003). Essentials of strategic management. NJ: Pearson Education Inc. Kaplan, R.S. & Norton, D.P. (1992). The balanced scorecard: Measures that drive Performance. Harvard Business Review 71-83. Kotler, P. (1997). Marketing management analysis, planning, implementation and control, (9th Ed.). Upper Saddle River, NJ: Prentice Hall. [...]
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