Case:
Ali and Hassan are Master of Business Administration
degree holders and they want to establish a new business in Fast Food
Industry in partnership with the name AH Hot & Spicy Fast Foods. For
this purpose, they made analysis of different market situations of this
Industry; also for their business they analyzed different environments
in which a business works that social, technological, political and
economic. They are full of team spirit and having good technical skills
and abilities to work and run the business.
After analyzing the market internal and external factors, they received basic knowledge important for any new enterprise. Finally they decided to start the business in Islamabad.
Requirement:
Perform a PEST analysis for AH Hot & Spicy Fast Food.
Solution:
PESTLE stands for “Political, Economic, Social, Technological, Legal
and Environmental” and is used for business and strategic planning,
marketing planning, organizational change, business and product
development and research reports.
By understanding these external environments, organizations can maximize the opportunities and minimize the threats to the organization.
PEST Analysis AH Hot & Spicy Fast Foods
The various Political, Economic, Social and Technical factors that a
firm needs to consider and research in order to enter the restaurant
business in a new environment may be depicted as follows:-
Political Factors:
Government regulations regarding hygiene, health and food regulations, food standards, etc.
Economic policies of government regarding the restaurant industry and
running eating joints; these may include licenses, inspections by Health
and Food Ministry departments, etc.
Economic Factors:
Interest rate would impact the cost of capital, the rate of interest being directly proportionate to the cost of capital.
Rate of inflation determines the rate of remuneration of employees and
directly affects the price of the restaurant’s products. Again, the
proportion between the inflation rate and wages/prices is direct.
Economic trends act as an indicator of the sustenance and profitability
of your business in the chosen region and help you in deciding your
marketing strategy.
Social Factors:
Certain cultures abhor certain foods. For instance, Hindus will not eat
beef and Muslims would not even touch pork. Therefore knowledge of these
cultural facts about your business environment will help you decide whether or not you’ll be able to do any business there.
Eating habits of the people in your chosen business environment may, and certainly will, affect your marketing decisions.
Ratio of people preferring to eat out regularly.
MGT211 Introduction To Business Assignment 1 Solution
