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Here we are analyzing the pest analysis because we want to open a new company Adidas
in Pakistan which is Actually a Football manufacturing company, a European company.
Firstly, he wants to analyze the pest analysis in Pakistan before starting their
business.
IMPORTANCE OF P EST ANALYSIS.
PEST influences are a helpful method of summarizing
the external environment in which a business operates.
ADIDAS A FOOTBALL MANUFACTURING COMPANY
We see, that Adidas is a world famous football manufacturing
company in Europe and supplies in all over the world and earned a huge amount of
profit. But not the company decided to start business in Pakistan.
PURPOSES OF ADIDAS
Adidas know that the per capita income of Pakistan is low and if we
manufactured the footballs in Pakistan then the cost will be reduced and here the labor
cost is less than Europe and the company can earn a big profit from Pakistan. But due to
some reasons Adidas Company has some problems because the company cannot know
the environmental position of Pakistan. Due to this reason he is doing the pest analysis in
Pakistan. here we see that how the pest analysis is done by Adidas?
These are four factors whose applies in pest analysis mostly, but here all factors will be discussed
with details.
POLITICAL FACTORS
Tax policy,
Labor law,
Environmental law,
Trade restrictions,
Tariffs,
Political stability.
Political factors may also include goods and services which the government
wants to provide or be provided but others there are some question in
our mind during the analysis which is…..
The political arena has a huge influence upon the regulation of businesses, and the
spending power of consumers and other businesses. You must consider issues such as:
If these factors are goes in favor of Adidas then the company will decide that the
Pakistani political environment is favorable for doing business and I thought that it is a
big opportunity for Adidas to do business and for earn profit.
ECONOMIC FACTORS
Here the Adidas analyze the economy of Pakistan and know how the
economic factors are influence on company the factors may be include of
Economic growth,
Interest rates,
Exchange rates
Inflation rate.
Employment level per capita.
Long-term prospects for the economy Gross Domestic Product (GDP) per capita,
and so on.
These factors have major impacts on 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 affect the costs of exporting goods and the
supply and price of imported goods in an economy. Here the Adidas knows that if the
majority of factors are going to his favor then the company can decide the start his
business.
SOCIOCULTURAL FACTORS.
In the sociocultural factors the Adidas company will analyze the Social
factors include the
Cultural aspects
Health consciousness,
Population growth rate,
Age distribution,
Career attitudes
Emphasis on safety.
The social and cultural influences on business vary from country to country. It is very
important that such factors are considered. Factors include:
If these are in favor of Adidas Company then will be the best environment for investing
in Pakistan for manufacturing footballs.
TECHNOLOGICAL FACTORS.
We know that, Technology is vital for competitive advantage, and is a major driver
of globalization. Consider the following points:
Does technology allow for products and services to be made more cheaply and to
a better standard of quality?
Do the technologies offer consumers and businesses more innovative products
and services such as Internet banking, new generation mobile telephones, etc?
How is distribution changed by new technologies e.g. books via the Internet,
flight tickets, auctions, etc?
Does technology offer companies a new way to communicate with consumers e.g.
banners, Customer Relationship Management (CRM), etc?
Adidas Manufacturing Company analyze the technological factors if they meet their
requirements then the company will decide it positively.
CONCLUSION
The conclusion of Adidas manufacturing footballs company will be that the company
will firstly analyzed the four factors pest analysis if these are fulfilled the company
requirements and we know that all factors never fulfilled at desired but if the majority
will favorable then the company will agree to start his business in Pakistan and
manufactured footballs and enjoyed the huge profit due to the business of company will
expand.