PEST Mark & Spencer

PEST Analysis

To successfully operate, an organization needs awareness of the environmental influences and trends that encircle it. PEST analysis can achieve this objective and provide an overall picture of the variety of forces at work around an organization. PEST analysis measures a business’s market and potential according to external factors; Political, Economic, Social and Technological.

Political Factors

The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers. It is imperative that an organization considers certain political issues before beginning the marketing process as the entire marketing strategy of the organization is dependent upon the prevailing political environment in the country. These issues are:

• How stable is the political environment?

• Will government policy influence laws that regulate or tax your business?

• What is the government’s policy on economy?

• Are there any threats to the existing government?

Marks & Spencer is based in the UK which has a stable political scenario and there are no serious threats to it. Terrorist attacks in July 2005 did raise concern over the political situation; however, due to tight security measures things have been under control since then. The current Labour administration, which is serving its third consecutive term, has generally proved to be efficient and effective.

The tax system in the United Kingdom is among the most attractive in the developed world with low corporate and personal taxes.

Economic Factors

The United Kingdom has an open economy and ranks among the fourth largest in the world. Properly managed fiscal and monetary policies have produced an expanding economy in the country with low inflation and strong government finances.

Marks & Spencer needs to conduct a thorough economic analysis. It is vital to consider the state of economy in the short- and long-terms. Issues such as interest rates, inflation, GDP, employment levels, etc. need to be encompassed in the marketing plan so that the strategies adopted encounter all such issues and ensure sustainability of competitive position. Current economic situation in the UK is favourable with low-to-moderate interest rates which signal a healthy economy. A healthy economy is a sign of increasing disposable income which, in turn, is good for the business. Marks & Spencer needs to concentrate more in the fashion arena as younger generation spends most of their disposable incomes on clothing.

Social Factors

Social and cultural influences on business vary from country to country. Marks & Spencer has operations not only in UK but across 30 territories worldwide which places it a diverse socio-cultural arena. Marks & Spencer management needs to address social factors such as consumer’s tastes and preferences, attitudes to foreign products and services, the amount of time that consumers can

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