Importance of PEST Wrap Up for Various Businesses

 If you think that it is possible to succeed in business without making any strategic plans and continuous evaluation of co performance you're mistaken. Sure, it is possible to achieve short-term financial goals and get immediate cash but you almost certainly fail in the long term. Competitors aimed at wiping out your business and that will surely do that as long as you offer them such an opportunity. One of the most common mistakes most business owners and top managers make is that they view of their business separately from political, economic and social environment. Besides, many of them forget about technological progress. The company may be doing OK right now without using the latest technologies, but in several years it will lose competitive advantage. Thus, it is imperative to thoroughly analyze external environment the company operates in, and this is where PEST analysis is of great assistance. Now, let's see what PEST is and analyze each of its component parts.

Let's begin with political factors. We all watch news and read news stories online. Thus most of us can understand that politics plays a prominent role in our lives. This also concerns business since important statements made by influential politicians can cause serious economic changes. As known, changes in economy directly influence customer purchasing power and thus affect company financial results. It is not a secret that many big companies especially international ones have own analytical departments that deal with political trends. If a company is planning to enter in new market it should properly analyze political situation in that country to forecast possible consequences of political changes there.

No one can deny importance of financial factors. Even if a company produces the best products and offers the best services in the world it is pointless to run business in a country where consumer purchasing power is very low and the government faces serious financial problems. There are a number of economic indicators that demonstrate well being of national and international economies such as customer purchasing power, gross domestic product, rate of inflation etc. Thus, before launch in any product line and company should definitely analyze economic situation in the countries to which the chosen markets belong.

Social factors play equally important role. Every business operates in a society and it is an inseparable part of the society. That's why if a company ignores social trends, tendencies, movements and developments it is doomed to fail. Consumers should percept the company as part of their society. It is impossible to learn about consumers' needs, demands, desires and expectations without proper social analysis. Besides, we're living in the age of social media work social networks play a great role. So, a successful company should analyze social trends and make relevant decisions on how to improve products and services as per social expectations and demands.

Finally, due attention should be paid to development and use of latest technologies. Even if the company is doing OK without the latest technological know-how in several years it will feel it lacks tech support.

Thailand - Situation Update

 Having lived in Thailand for the last two years I have experienced their military coup of 2006 as well and their path back to democracy. The coup was bloodless and the only person I am aware of getting hurt was a taxi driver who rammed a tank park in the street because he was frustrated with it being in his way. The Thai people's path back to democracy was well planned and quite structured by the military who was governing Thailand after the coup. Initially a new constitution was written that afforded more protection against governmental abuses. This constitution was accepted by the Thai people through a referendum vote. After accepting this constitution, the people then had a general election where the same ruling party (renamed as the PPP Party) that was ousted by the coups was voted back in. This party was voted back in for several reasons; one being the people living outside of Bangkok was enamored with the promises of money through governmental programs and tax cuts. The second reason was, as it turns out, there was vote buying, which we found this out in a recent conviction of the leading party's leader of voting fraud.

The current Prime Minister Samak Sundaravej has made some huge political blunders both internally and internationally such as bringing Thailand close to fighting with Cambodia over the border line surrounding the Preah Vihear temple which was settled in 1962 by the World Court. The Thai People always felt cheated about this and PM Samak had "solved" the problem in a one day meeting with the Cambodian leader about six months ago. There has been a military build up on the border near this temple in the last few months...

So ... between the conviction and some actions and decisions that are not particularly cared for by the general population many Thai People are not happy with the current Prime Minister. The opposition party is staging protests and has been for the past 3 or more months (as of early September 2008). Peaceful protesting is a healthy expression of democracy, when the government allows people to express themselves in the open. The protests became unhealthy last week. The protesters were met with a rival group of "anti"-protesters supporting the current government. The two groups clashed and resulted in a death and over 40 injured people. The clash led to a "state of emergency" declaration by the government causing concern for the situation throughout the world.

But to put things into perspective, Thailand is still a very peaceful place to live, for everyone. The clash of political groups was an isolated event and seems to be remaining just that. Thai people should be commended for not allowing the situation to get out of control and allowing the violence to escalate. The emergency declaration, however, is worrying people wishing to visit and therefore hurting the economic situation here by impacting tourism. So we are all waiting to the politicians to solve their conflicts so Thailand can return to "the Land of Smiles".

Why Companies Need PESTEL Analysis

Do you know why strategic planning is so important? If 30 years ago companies only had to release high quality products at competitive prices, now the situation is so much different. Tough competition makes business owners and top management adopt very important decisions and solve problems even before they actually occurred. Sounds weird right? How can one solve a problem that does not exist and the moment? Easy! This is where strategic planning helps. Strategic planning is about forecasting problems and offering multiple solutions to these problems.

In other words the company is ready for difficulties even before they come. In such a way it can easily solve problems and gain competitive advantage in the market, which is an ultimate goal of every commercial organization or business. However, strategic planning requires very deep analysis that covers all factors influencing company performance, including those which are not dependent on the company itself. We know that business is an inseparable part of our society, and thus it is run according to certain rules and regulations. There are a number of factors that directly and indirectly influence company performance. These factors lie in different prospects. PESTEL analysis undertakes to evaluate company position according to such factors. PESTEL stands for political, economic, social, technological, environmental and legal factors. As you can see these factors cover most important environments every business is operating in. Having performed PESTEL analysis the company top managers and owners will have the most complete information on what needs to be improved to be ready to implement company strategy. Let's give a short overview of each factor stage in its importance for particular business spheres.

Political. Although many top managers do not admit the fact that economy is closely related to politics, the reality shows that political decisions directly influence economic situation, business climate and market conditions in the country. Indeed, the controversial statement made by prominent politician can turn things upside down. This may have negative consequences for major businesses. For this reason big companies maintain own departments for political analysis that make forecasts and predictions in terms of political situation both in the national and international community.

Economic. This factor requires no explanation. Such indicators as gross domestic product, national debts amount, trade balance, inflation rate, customer purchasing power and others have a great influence on company well being, cents if customers are unwilling to buy or custom of purchasing power is too low there is no sense in entering markets with expensive products.

Social. Every company should remember that it releases products for customers or part of the society. Moreover, every company is part of the society and thus it should take into account all social problems, issues and trends.

Technological. This factor requires no explanation as well. The future of business is in development of technologies. This is an axiom to be accepted by everyone.

Environmental. This factor mostly concerns production enterprises, however all industries have to consider their impact on the environment.

Legal. All businesses operate within frameworks of certain legislation's, both national and international. It is important that all business operations comply with legislative norms.

16 Factors to Consider in Determining and Establishing Monetary and Fiscal Policy

Monetary and fiscal policies have impact on the total economy. Those macroeconomic policies shape, and guide and control the behavior of the economy. The following factor needs to be considered in making monetary and fiscal policy:

1. Inflationary state of the economy:
If the economy suffers higher inflation then increasing money supply through monetary policy can be ineffective. So in making monetary and fiscal policy this factor should be considered

2. Marginal propensity to consume:
The willingness of people to consume is another factor in making those policies. Suppose if people's tendency is to consume whatever the interest rate is then monetary and fiscal policy may be ineffective

3. Govt.'s estimated GDP target:
Every govt. has specific GDP target. Govt. makes policy to achieve the estimated GDP target. So this should be taken into consideration in making monetary and fiscal policy.

4. Economic condition of a country:
When the economy is in a recession, monetary policy may be ineffective in increasing spending and income. In this case, fiscal policy might be more effective in stimulating demand.

5. Present interest rate in the market:
In setting the policies another considerable factor is the present interest rate. The present interest rate determines whether expansionary or contractionary monetary and fiscal policy should be introduced. The success of the policy depends on considering this factor.

6. Govt. revenue target:
In each and every year govt. sets specific revenue target. Through the budget govt. specifies it. So in making fiscal policy it should be considered. Suppose, in contractionary policy tax is reduced. If this happens then the policy contradicts with the aim to achieve revenue target.

7. Govt. policy toward import and export:
Sometimes govt. wants to bar against import or export, so in making fiscal policy and monetary policy this should be taken into consideration. Reducing export duty or imposing import duty to any industry can have an impact on govt. policy.

8. If the economy is in booming situation and nation is experiencing industrialization, In that situation if govt. want to reduce the pace of industrial growth monetary and fiscal policy then become a tool. So this factor can also be considered in creating new policies.

9. Govt. policy on privatization:
If govt. want to privatize and encourage private sector to grow, Govt. will take privatization policy. In this case govt. will give facilities to the private sector by lowering taxes and decreasing interest rate through monetary and fiscal policy and vice versa. So govt. perspective on privatization is another important considerable factor.

10. Balance of payment:
Balance of payment is another important factor. If the govt. wants to decrease trade deficit certainly it can encourage export and discourage imports. So, monetary policy will reflect the desire of Govt.

11. Influence of Donor institutions and countries
As a third world and developing country like Bangladesh, where we are dependent on huge loan from the international organization. The influence of those organizations sometimes can be a considerable factor in making monetary and fiscal policy. In our country IMF and EU always pressures govt. to increase the deposit rate. So in policy making this is a considerable factor for the govt.

12. Enforcement of the policy:
In making the policies, it should be determined and ensured that the policy should be in effect. Enforcement and implication is very much important here.

13. Expectations of people regarding future:
If people expect that the monetary policy and fiscal policy will create tax burden in future, then policy implication can be difficult. So it should be taken into consideration.

14.Foreign Currency reserve:
Each and every year govt. especially central bank has some specific foreign currency reserve target. In order to increase the reserve, favorable monetary policy should be introduced. So it is also important factor in consideration.

15. Political stability:
A country's political situation is another consideration for making those policies. If there exists stable political situation then any policy can be implemented easily. But in case of unstable political situation it's difficult to implement those policies.

16.Govt. spending on structural buildup:

If govt. has a policy to build up infrastructure, then govt. make fiscal policy in favor of govt. Spending. Here govt. spends much to develop the structure in transportation or other areas

Those are some factors needed to be considered in making monetary and fiscal policy.

Political Science Books

Whether you are interested in politics, you will find that, at some point in your life, you will be influenced by politics, be it at your workplace, home, or school. However, when we talk about politics, we generally refer to the political situation of the country, state, region or city we live in. Consequently, almost all political science books are written keeping these factors in mind. In fact, most courses in colleges and universities around the world also prescribe books that teach students the political situation in their country or that of the rest of the world.

There is a school of thought that says that political science can help you prepare for studying law. This is due to the fact that much of what you study in politics comes from law. You read about the laws that govern various processes in your country. Political processes, such as elections, the judiciary, procedures for appointment of the prime minister and president and various other laws, can form a part of this course. As a result, books written on this subject give a very detailed perspective of laws governing the country.

Additionally, political science books can help you compare the laws of your country with those of some other countries. For instance, you can compare the political process of two of the world's biggest democracies of the world - United States and India. Both countries follow different forms of democracies, which are successful in their own ways. If you want to study it in greater detail, then consider taking up a book related to the politics of the country and read it in detail. You will gain plenty of knowledge of the way the country functions and will learn how, despite of its fallacies, a country is successful in its political process.

If you are not planning to join law school at a later stage, you must still read books related to political science. They will help you become active citizens and help you understand how you can use the laws of your country in your favor as well as that of society. For instance, you can pick up a book on how the Freedom of Information law was enacted in Britain by the House of Commons. Similar laws are available in other parts of the word under different names. The US Department of Justice, too, has enacted its own version of the Freedom of Information act.

Reading political science books will make you an informed citizen. If you are a political journalist, you will find that books on this subject will help you find vital information that can help people know how to approach and question their leaders. If this is the case, you must set aside some time to read and understand the political process of your country as depicted by the book you read.

Getting information about the political process of your country can be a daunting task that can be simplified by the help of books on this subject matter. It is, therefore, recommended that you must read them to know your country better.

Two Cheers For Jakarta - political situation in Indonesia

Indonesia political distractions of recent times have left the country around a year behind its neighbors in the cyclical economic-recovery process. However, events have panned out as well as one might have hoped over the past six months. Most Indonesians, plus the international donor community, seem intent on giving President Abdurrahman Wahid (also known as Gus Dur) a honeymoon period of support. Some are complaining that Wahid's erratic leadership style is unsuited to running a government of 200 million people. Compared to the previous regime's policy paralysis, however, almost anything is an improvement. Besides, most people tend to learn on the job. Ongoing cabinet reshuffles and purges should also provide a clearer picture of who is running the show and the direction of policy. At least that is the bullish case.

The current situation provides some breathing space and reduced political risk, assuming separatist guerrillas in the province of Aceh and other simmering separatist groups are controlled. Unlike East Timor, the world appears to have no interest in supporting Aceh's separatist movement -- aside from Libya's Colonel Ghaddafi and a few other unsavory characters. Containing the tension will provide immense relief to many of Indonesia's neighbors -- most notably China -- who also have smouldering pockets of independence fighters. And assuming the U.S. economy holds together, broader global and regional themes suggest a strong economic upturn for Indonesia over the next 6 to 12 months.

Although Jakarta is starting from a worse position than all of its peers, the first shoots of recovery are appearing from the rubble. Imports and exports (oil and non-oil) are on the rise, supermarkets and shopping malls are seeing better business, and traffic jams have returned to the capital. Moreover, some progress has been made in addressing the black hole that is the banking sector, though one should remember that the starting point of an NPL ratio of 60 percent of GDP is around four times the level of the Mexico bust in 1995.