External Factors (PESTEC)

• External Factors (PESTEC)

  Political Factors

  Economic Factors

  Social Factors

  Technology Factors

  Environmental Factors

  Competitive Factors
• External Challenges - Political

  • Introduce new taxes
  • Change Tax
  • Changes to funding
  • Government Initiatives e.g. PPI
• External Challenges - Economic

  • Inflation
  • Exchange Rates
  • Interest Rates
  • Recession
• External Challenges - Social

  • Changing fashions and attitudes
  • More women working
  • Increase in Vegetarian/Veganism
  • Demographics
• External Challenges - Technology

  • Keeping up-to-date with technology
  • AI
• External Challenges - Environmental

  • Climate change
  • Recycling
  • Renewable energy
  • Floods
  • Storms
• External Challnges - Competition

  • Keeping up with competition
• External Influences and their Impact - Political

  • Change in law e.g health and safety which may mean the organisation has to retrain staff, this increases expenses.
  • Increase in National Minimum Wage which may mean the organisation has a higher wage bill this affects profits.
• External Influences and their Impact - Economic

  • If the economy is in recession it will force an organisation to downsize/pay staff.
  • Rising interest rates will mean that customers have to spend more on mortgage payments so spend less on other things, leading to reduced demand.
• External Influences and their Impact - Social

  • Changing trends and fashions will mean businesses must continually carry out market research to identify what consumers want.
  • Ageing population will mean businesses must respond to the needs of older people and provide products for this age group.
• External Influences and their Impact - Technological

  • Increase use of social media/e-commerce will mean businesses must be kept up-to-date with new technology by adapting the way they sell/market their products to stay ahead of competition and this may increase costs.
• External Influences and their Impact - Environmental

  • Reduce Packaging can result in the business reducing costs.
  • Bad weather/flooding which may mean businesses will be unable to open and therefore lose sales and have to replace damaged equipment and stock.
  • Seasonal Changes will lead to changes in customer demand/shopping habits.
• External Influences and their Impact - Competition

  • Competitors bring out a cheaper product will mean the business may have to reduce prices to compete and therefore profits will be affected and this may increase costs.