Question

Do a full pestel analysis on Alienware computers please.
Explain the impacts of demographic, political, economical, social/cultural, technological and legal trends.

Answer 1

A PEST analysis is an analysis of the external macro-environment that affects all firms. P.E.S.T.is an acronym for the political, Economic, Social, and technological factors of the externalmacro-environment. Such factors

usually are beyond the firm’s control and sometimes presentsthemselves as threats. For this reason, some say that “PEST” is an appropriate term for these

factors. However, changes in the external environment also create new opportunities and theletters sometimes are rearranged to construct the more optimistic term of STEP analysis.

Many macro-environmental factors are country-specific and a PEST analysis will need to beperformed for all countries of interest. In the following, the analysis of the political, economic,social and technological factors leads to a description of the macro environment of Dellcomputers. Like in all markets, DELL computers is also subject to laws that regulate virtually all aspects of their business, including such areas as health safety, pollution, and advertising and labelingrequirements. Problems can arise in countries where political stability is not guaranteed, nomatter whether companies operate production facilities or if they do business with that countrythrough exports. Many countries still have restrictive policies which are maintained to protectdomestic manufacturers and production. Such policies often hinder foreign companies fromentering into these markets. The only possibility to do business in those countries is to establishpartnerships with local companies, where they are additionally forced to accept minority sharesand to provide money and technological know-how. However, DELL computers sees greatpotential in those countries which loose their restrictions.

Economic Environment

Economic environment refers to the aggregate of the nature of the economic system of thecountry, the structural anatomy of the economy to economic policies of the government, theorganization of the capital market, the nature of factor endowment, business cycles, thesocioeconomic infrastructure etc. The economic environment includes factors and trends relatedto income levels and the production of goods and services. The economic environment consists

Political Environment

The political environment of a country is influencedby the political organisations such as philosophy of political parties, ideology of government or party inpower, nature and extent of bureaucracy influence of primary groups etc. Political factors includegovernment regulations and legal issues determiningthe conditions under which companies have tooperate. In this field, DELL computers has to facecertain restraints.

PEST analysis includes four factors:

• Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.
• Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

Other factors for the various offshoots include:

• Demographic factors include gender, age, ethnicity, knowledge of languages, disabilities, mobility, home ownership, employment status, religious belief or practice, culture and tradition, living standards and income level.
• Regulatory factors include acts of parliament and associated regulations, international and national standards, local government by-laws, and mechanisms to monitor and ensure compliance with these.

More factors discussed in the SPELIT Power Matrix include:

• Inter-cultural factors considers collaboration in a global setting.
• Other specialized factors discussed in chapter 10 of the SPELIT Power Matrix include the Ethical, Educational, Physical, Religious, and Security environments. The security environment may include either personal, company, or national security.
• Other business-related factors that might be considered in an environmental analysis include Competition, Demographics, Ecological, Geographical, Historical, Organizational, and Temporal (schedule)

Impacts of demographic, political, economical, social/cultural, technological and legal trends are:

Political

• Government type and stability
• Freedom of press, rule of law and levels of bureaucracy and
  corruption
• Regulation and de-regulation trends
• Social and employment legislation
• Tax policy, and trade and tariff controls
• Environmental and consumer-protection legislation
• Likely changes in the political environment

Economic

• Stage of business cycle
• Current and project economic growth, inflation and interest rates
• Unemployment and labour supply
• Labour costs
• Levels of disposable income and income distribution
• Impact of globalisation
• Likely impact of technological or other change on the economy
• Likely changes in the economic environment      

Socio-cultural

• Population growth rate and age profile
• Population health, education and social mobility, and attitudes to
  these
• Population employment patterns, job market freedom and attitudes
  to work
• Press attitudes, public opinion, social attitudes and social
  taboos
• Lifestyle choices and attitudes to theseSocio-Cultural changes

Technological

• Impact of emerging technologies
• Impact of Internet, reduction in communications costs and
  increased remote working
• Research and Development activity
• Impact of technology transfer

Examples:

Ecological factors – Air quality, transportation, parking, pollution discharge, water quality, waste management, land use, coastal resources etc.

Legislative requirements – Primary and secondary legislation in relation to Health Bills e.g. employment laws, contracts over rights of staff, rights of patients, direct payments etc.

Industry analysis – Demand, liaison and selection for services, products and/or component parts on the basis of price, quality, delivery times and services support; market knowledge, forecasting, purchasing strategies, liaising with users, business
efficiency;