Using PEST analysis, show how each factor can provide opportuinties for business oraganisations?

Question

Its an assignment am doing, i did mine am not sure whether am wrong or correct please help, or correct me where you guys can.

PEST Analysis is a macro environmental framework used to understand the impact of the external factors on the organization and is used as strategic analytical technique. PEST stands for "Political, Economic, Social, and Technological” factors.
We look at PEST analysis of AIR NAMIBIA.

• Political: new SADC regulations have led to greater levels of competition on SADC routes. Consistently government bailout plans has seen the Air Namibia growing.


• Economic: As a country’s GDP grows, so does the desire of its residents for travel and more and more will be able to afford to pay the cost of air travel. Currently, only 10% of Africans travel by air but given the current rate of economic growth and emergence of the middle class, there will be high demand for services linked to air transportation.

• Social: increased popularity of holidays abroad has led to a boom in demand for air travel.

• Technological: modern aircraft are more economic to run than in the past making possible cheap air travel. The new Airbus A330-200s will break the long history of Air Namibia operating quad powered aircraft (four engines) with twin-powered aircraft on its long haul operations between Namibia and Europe. These planes come with improved operating technologies which offer way much better savings on operating costs.

Answer 1

You do have a good understanding of the subject. PEST, PESTE (Adding Environment), or PESTEL (Adding Legal) is basically a model to understand 'marketing environment ' of a firm. In Airline industry, global warming, shortage of infrastructure capacity etc have all impacted the marketing environment, therefore PESTE is somewhat commonly used model. Here are some quick suggestions:



POLITICAL: You are on right track. You may also want to analyze the terrorism fears or threats if any.

ECONOMIC:Because airline policies are based on overall 'economic' environment, it is important to keep an eye on the 'trade cycle' in your region. Otherwise if airline focuses on GDP growth, than whatever policy/strategy they come up with, will work well during the growth only. So, if you have resources, then glance through the trade publication in Namibia and try to understand the ups and down for analysis purposes.

SOCIAL: This is quite a significant component of analysis from marketing perspective. Airline analysts pay lot of attention to the average ages of population as it helps them design service strategies.For example, if airline region has 'aging' population, they will prefer to fly airlines offering meet and assist/wheel chair/special assistance etc. If the population is young, then airline will focus more on enticing technologies etc to lure them. You wont believe, but we even analyze 'family structure' of population to design strategies. For example there is a lucrative segment of gay & lesbian travelers, single parents, women business travelers etc.

TECHNOLOGICAL: You covered good points regarding operating technology. It would be good to mention about internet, social media, inflight entertainment trends, and analyze how airlines are utilizing these technologies and how air Namibia can benefit by adopting those technologies.

ENVIRONMENT: If you want to include it, then you can analyze the effect of global warming on certain markets of your airline. For example, airlines flying to US/Caribbean are concerned about rising sea surface temperature causing hurricanes and storms in certain regions and airlines are reluctant to fly to those regions due to very low load factor.



Overall, you are doing good. I shared with you what I do, but it is purely optional. Do what makes more sense to your specific scenario. All the very best.

Answer 2

P stands for political E stands for economic S stands for social T stands for technology Each one of the above mentioned change all the time, so if you are up to date with all the updates through researches you will highlight the opportunities and quickly you benifit from them in your marketing strategy and in your targeting policy depending on your product. On the contrary you will be aware of disadvanteges of the recent changes and so plan a protection policy. This analysis is not enough you should also go for portfolio analysis. BCG is usually used.

Answer 3

It sounds to me like you are on the right general path (although if it had been up to me, I would have moved the letters around to name it STEP; PEST analysis sounds like something an exterminator would do). You might want to check and see if a need for business travel might come in; the focus on tourist air travel sounds a little off to me, but I'm not in Africa.