PEST analysis is a tool used to identify opportunities and threats in different environment. It aids in analyzing economic, political, technological and socio-cultural changes in a given environment. According to Bensoussan, & Fleisher, (2012), these factors are considered to go beyond the direct influence of an individual. They also add that key to effective management is to make good decisions. The decisions should bring positive outcome. This paper will concentrate on the PEST analysis for USA. This paper will explain an analysis of each of the factors mentioned above.
Under economic factors there are a number of things that are put into consideration. We first look at the USA market and distribution trends. These determine the economic situation of the Country. This will bring us to the home economy situation. This will deal with consumers’ views on what they consume. These are the end users for goods and can give their views on this issue. If they feel the prices are fair then the economy is good. This also leads us to look at taxation issues. We focus on taxation on specific services and products. The economy trends of the USA also matters here. The economy of the USA has been positive according to Teller-Elsberg, Folbre, & Heintz (2006). Under economic factors we also take a look at the interest and exchange rate of the USA dollar. This brings about the market cycles. If most of the products are mostly exported that is a good indication of good trade cycles. According to Teller-Elsberg, Folbre, & Heintz (2006) this shows a positive development in the economy. In international and monetary trade the USA is in a good position.
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Secondly, under political factors we look at a number of things. The first thing to look at is environmental issues. If the environment is well sustained then political situation of USA is good. International legislation also affects the politics of the USA. This is mostly by looking at the superpower countries. USA government policies also affect the politics of the land. According to Rosati, & Scott, 2010 trading policies are in the category of political factors. The trading policies in the USA are the ones that dictate the existing relationship between the USA and other countries. This leads us to think about the current legislation in the home market. This will influence the policies that will be made. The current legislation will influence the future legislation. In the USA lobbying groups are free to air their views. There is freedom of expression. In the USA the regulatory bodies and processes are well managed. Rosati, & Scott (2010) also say that funding grants initiatives are mostly managed by politicians. The USA government has ways of dealing with conflicts and wars. This can be either internal or external.
The third factor is social trends and how it affects USA. According to Marsden (2012), social trends dictate work patterns, attitude, consumer tastes and the demand of a product or service. Through the monitoring of social trends the USA will be able to reposition its goods and services. Lifestyle trends aids in determining if the social life of the citizens is good. This may include increased healthcare consciousness among the US citizens. Customers’ opinions and attitudes towards a particular product or service fall under social trends. In USA the opinion of a customer about a product or service will highly influence another customer. This will lead to specific customer buying patterns. This is another way of advertising the products and services (Marsden, 2012). Through this it will be easier to determine the products to be sold locally and the ones to be imported. Thus, leads to the branding of a company. Media views also influence a good number of people in the USA. This is evident in the reactions of people after getting information from the media. Religious factors are included in social trends. In USA there is freedom of worship for every citizen.
Lastly there are the technological factors. Innovation has led to the increase of technological change. In USA the introduction of the internet has made away with many intermediaries especially in the trade sector. This has brought about new consumer buying mechanisms for both the seller and buyer. Technology has also improved the way information is gotten. Technology change brings about replacement technology solutions. In the USA when a new technology replaces the existing one, the demand for the existing one drops. Technology brings about manufacturing maturity. High end products will be produced. This forces USA to be vigilant in any technological development.
- Bensoussan, B., & Fleisher, C. (2012). Analysis without paralysis (1st ed.). New York: FT Press.
- Teller-Elsberg, J., Folbre, N., & Heintz, J. (2006). Field guide to the U.S. economy (1st ed.). New York: New Press.
- Rosati, J., & Scott, J. (2010). The politics of United States foreign policy (1st ed.). New York: Harcourt Brace College Publishers.
- Marsden, P. (2012). Social trends in American life (1st ed.). New York: Princeton University Press.