PESTEC Flashcards
What does PESTEC stand for
Political
Economic
Socio- Cultural
Technology
Environmental
Competition
What does a Law do
Makes a business change its policies
What are examples of laws
Minimum wage act
Equality act
health and safety at work act
What are the 2 parts of the Political part of PESTEC
Laws
Taxes
What are taxes?
The percentage of profit given to the government to fund public sector services e.g. NHS, Schools, Fire brigade
What is disposable income?
Money left to spend after tax
What are the 3 parts of the Economic part of PESTEC
Interest Rates
Exchange Rates
Unemployment
What are interest rates?
The percentage added to loans when repaid and the percentage added to money when it is saved
What are exchange rates?
The cost of buying a foreign currency
What is unemployment
The number of citizens unemployed
What happens if there is a high amount of citizens unemployed?
There is more choice during selection, You can pay lower wages which equals a higher profit, more competition for jobs
What happens if there is a low amount of citizens unemployed?
Less choice during selection, you will have to pay higher wages which equals less profit, less competition for jobs
What are the 3 parts in the Socio-cultural part of PESTEC
Tastes and trends, culture and demographics
What happens if a business is in trend?
higher demand, higher prices, higher profit, higher competition
What happens if a business is out of trend?
Wasted stock, have to lower prices, product enters decline phase of product life cycle
What happens if there is higher costs and lower profits?
The business needs to find a new product or service
What are the benefits of a business adapting its products or services for traditions or beliefs?
You can charge higher prices, you get high profits.
What is demographics?
The ways to categorise different groups in a geographical area.
What do demographics help to identify
Products/services, prices, promotion, places (stores, markets, online etc.)
What are examples of demographic groups and give product examples?
Gender - Clothes, sanitary products, hair tools
Age - Children toys, alcohol, baby food
Employment status - job centres, charity shops, food banks
What are the 4 parts in the Technology part of PESTEC
Research and development, automation, ICT, E-Commerce
What are the benefits of ICT
It allows for virtual meeting making it easier to work internationally and easier to communicate with suppliers and customers.
What are the benefits of E-Commerce?
It allows for 24/7 business, huge potential worldwide market, no need for potential premises or lots of staff, practically limitless “shelf space”
What is a negative of E-Commerce?
the business may lose employees, there will be lower employee motivation when functions are automated, it is expensive to set up and maintain
What are the 2 parts in the Environmental part of PESTEC
Weather and Protest groups
What is a negative of weather and give a solution?
Temperature, rain and snow can delay growth or spoil crops SOLUTION: poly tunnels
What are negatives of protest groups and try give a solution?
it stops production, lower public opinions, and block applications. SOLUTION: compromise, get involved in local community and local sponsorship.
What are the 4P’s?
Product, Price, Place, Promotion
What is a negative of competition?
Changes in any of the 4P’s by a competitor can make customers leave or buy less
What is a solution for changes in any 4P’s?
Achieve the same as competition(BENCHMARK)
Become better than competition
