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PRESENTATION

ON
PEST ANALYSIS AND ETOP

Presented By:
Manpreet Singh
Jyoti
Navpreet Kaur
Khusvir Singh
Manpreet Singh

( 14MBA 1172 )
( 14MBA 1128 )
( 14MBA 1190 )
( 14MBA 1138 )
( 14MBA 1173 )

INTRODUCTION
An organisations success is influenced by factors operating
in its internal and external environment; an organisation
can increase its success by adopting strategies which
manipulate these factors to its advantage. A successful
organisation will not only understand existing factors but
also forecast change, so that it can take advantage of
change within the environments in which it operates.
PEST analysis is used to identify the external forces
affecting an organisation .This is a simple analysis of an
organisations Political, Economical, Social and Technological
environment. A PEST analysis incorporating legal and
environmental factors is called a PESTLE analysis.

P.E.S.T

P
E
S
T

for
for
for
for

POLITICAL FACTORS
ECONOMIC FACTORS
SOCIAL FACTORS
TECHNOLOGICAL FACTORS

POLITICAL FACTORS

Legislation such as the minimum wage or


anti discrimination laws.
Market regulations .
Trade agreements, tariffs or restrictions .
Tax policies.
Type of government regime eg.
democratic, dictatorship etc.

ECONOMIC FACTORS

Home economy situation and trends


Overseas economies and trends
General taxation issues
Market routes and distribution trends
Interest and exchange rates
International trade/monetary issues

SOCIAL FACTORS

Lifestyle trends
Demographics
Consumer attitudes and opinions
Brand, company, technology image
Consumer buying patterns
Fashion and role models
Ethnic/religious factors
Advertising and publicity
Ethical issues

TECHNOLOGICAL FACTORS

Competing technology development


Associated/dependent technologies
Replacement technology/solutions
Manufacturing maturity and capacity
Information and communications
Technology access, licencing, patents
Consumer buying
mechanisms/technology

CASE STUDY
MCDONALDS

POLITICAL CHALLENGES

Health and Safety Guidelines

fast food consumption has been shown to increase


calorie intake, promote weight gain and elevate risk
for diabetes
criticised for caloric content, trans fats and portion
sizes

Ecological/environmental issue

one of the largest consumers of paper products in


the US leading to millions of pounds of food
packaging waste littering roadways, clogging landfills
and spoiling quality of life.

POLITICAL CHALLENGES CONTD

Wars and conflicts

war between countries where the company


operates

ECONOMIC CHALLENGES
low set up costs leading to rapid
expansion
keeping the prices low for the
customers.
Requirement of specific raw material.
Local market cannot maintain the
supply of
material thats the reason
MacDonald import beef and patato to
fullfill its demand.

SOCIAL CHALLENGES

Health fears

customers now opting for more healthier


options like SUBWAY which offers more
variety for health conscious customers.

Emphasis on food safety

TECHNOLOGICAL CHALLENGES

Streamlining of processes to improve


efficiency

through technology enhancements such as FPI's Help


Desk Service, network and application consolidation
and other technology implementations, operations of
the company are greatly improved

Marketing done by means of television


advertisements

Implemented technology to improve


supply chain management

STRATEGIES ADOPTED

McDonalds changed its image vastly by


evaluating the current menu and making
changes to it from using organic products to
revising the whole menu
entirely by offering salads and vegetarian
burgers. The accurate and accessible nutrition
information help guests make informed menu
choices.

STRATEGIES ADOPTED

Increase presence in Asian countries

When the first McDonald's opened in Beijing more


than a dozen years ago, 40,000 people lined up to
observe a Big Mac. It is growing faster in China than in
the United States. It owns & operates more than 600
stores across 105 cities in China. More than 100 more
McDonald's stores will be added annually to Chinese
cities within the coming years.

Locally focused menu choices


In India McAloo Tikki, Paneer Salsa Wrap, McVeggie
In China - Szechwan-style spicy chicken wings,
seafood soup, oriental sauces etc

ENVIRONMENTAL
THREAT
AND
OPPORTUNITY PROFILE
(ETOP)

WHY ETOP??

Helps organization to identify Opportunities-Threats.

To consolidate and strengthen organizations position.

Provides the strategists of which sectors have a favourable


impact on the organization.

Organization knows where its stands with respect to its


environment.

Helps in formulating appropriate strategy

ETOP ANALYSIS

Technological factors:

Economic factors:

General economic condition.

Source of technology.

Rate of inflation.

Technological development.

Interest rate/Exchange rate.

Impact of technology.

ETOP ANALYSIS

Socio cultural factors :

Environmental factors:

Weather change

Climatic change.

Demand related factors.

Suppliers related factors.

Demographic characteristics.
Social attitudes.
Education level , awareness, and
consciousness of rights.

ETOP ANALYSIS

Legal factors :

Political factors :

Policies related to licensing ,


monopolies.

Political structure , its goals


and stability.

Policies related to export and


import.

Government policies , degree


of intervention

Policies related to distribution and


pricing.

Political system.

FACTORS

COULD INCLUDE

Political

international trade, taxation policy

Economic

interest rates, exchange rates, national


income, inflation, unemployment,
Stock Market

Social

ageing population, attitudes to work,


income distribution

Technological

innovation, new product development,


rate of technological obsolescence

Environmental

global warming, environmental issues

Legal

competition law, health and safety,


employment law

THREAT MATRIX
HIGH

rr
o
j
o
aaj attss
M
M reea
r
TThh

ATTRACTIVENESS

LOW

ttee
a
rra s
e
ts
e
oodd reeaat
M
M Thhr
T

HIGH

ttee
a
rra tss
e
e
oodd reeaat
M
M Thhr
T

oorr s
n
iin atts
M
M reea
r
TThh

LOW

PROBABILITY OF OCCURENCE

OPPURINITY MATRIX
HIGH

rryy iivvee
e
V
Ve aacctt
rr
t
t
t
aat

ATTRACTIVENESS

LOW

llyy
e
tte e
a
a
r
vve
r
i
e
i
t
e t
oodd raacc
M
M Attttr
A

HIGH

llyy
e
e
t
aat ivee
r
r
ee cttiv
d
ood raac
M
M Attttr
A

ssss ivvee
e
LLe cctti
aa
r
r
t
tt
A
At

LOW

PROBABILITY OF OCCURENCE

PREPARING ETOP

Dividing the environment in


different sector.

Analyzing the impact of each


sector on the organization.

Subdividing each environmental


sector into sub factor.

Impact of each sub sector on


organization in form of a
statement.

ETOP: PROS AND CONS

Cons

Pros

Help to determine the key factor of


threats and opportunities.

It doesnt show the interaction


between the factors.

Good tool to qualify the factors


related to companys strategy.

It cant reflect the dynamic


environment.

Can consider many factors for each


special case.

Case study : MILLIPORE

About Millipore
Millipore is a multinational, high technology bioscience company that
provides technologies, tools and services for the development and
production of new therapeutic drugs. The company, headquartered in U.S.A
serves the worldwide life science research, biotechnology and
pharmaceutical industries. It has its existence in INDIA since 1967 with the
name MERCK and it was asias first to establish pharmaceutical business in
the country.
Mission and Vision
Millipore exists to provide technology, tools and services for the
development and production of new therapies and drugs that will enable
people to live longer, healthier lives. Our vision is to become the partner of
choice for critical tools, technology and services used in the discovery,
development and manufacture of new therapeutic compounds.

MILLIPORE PRODUCT LINE


1. Life science.
2. Drug discovery.
3. Sample preparations.
4. Lab water.
5. Process development.
6. Bio production.
7. Process monitoring.

Factors

Impact of each Sector

Economic

Fluctuation in exchange rate


Increasing rate of inflation
Worsening economic conditions

Technological

Strong R&D program


Market Leaders
Better solution providers

Political

No significant change.

Legal

Following FCPA (Foreign corrupt


practices act).
Strict IPR laws(Intellectual properties
rights)

Socio cultural

No significance change.

E
T
O
P
O
F
M
I
L
L
I
P
O
R
E

Factors
Competitive

Demand related

Governmental policies

Impact of each sector


Competition particularly from
low priced products .

Downfall in demand due to low


priced products .
Containment of rising healthcare cost.

No excise duty only vat for


product manufactured in India.

E
T
O
P
O
F
M
I
L
L
I
P
O
R
E

OPPORTUNITY MATRIX
Market leaders brand value and brand

Provide customized protocol support.

awareness.

Dedicated service team.(Toll Free numbers).

Large installation base.

Saturation point of market is far away

New low budget product lines.

New markets are opening

THREAT MATRIX
Competition particularly from low priced

IPR laws are not so strong in INDIA.

products.

Switching over form process patent to product

Concentration majorly on Big companiess.

patent
Patent law not well defined

Expensive products.

Lack of geographical division (remote areas).

Bad rapport with customers (unsatisfied

Poor dealer network.

customer).

Low investment in marketing.

THANK YOU

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