Question: pest analysis quotpolitical economic social and technologicalquot there are many...
PEST analysis ("Political, Economic, Social and Technological"). There are many benefits for companies who use this analysis. Only resource that is needed to complete this is time. This could be a cost savings for companies and also provide them leverage in the market by keeping up with trending changes that will impact their business. There are also disadvantages to doing this especially when companies do not invest in doing this routinely for the best effectiveness. Companies also make the mistake of over simplifying or not involving all necessary parties which could negatively effect the results. Quicken Loans the company I have been reviewing has many things to review when determining the external factors potentially impacting their business. Below are specific areas and factors that should be reviewed.
Political changes such as federal or state regulations that impact banking institutions will impact them greatly. With the continued focus on consumers and fairness many law makers have voted for stricter laws protecting the consumers. Although this has benefits it also puts additional pressure and requires additional resources for businesses to ensure they are staying compliant with the laws.
Economic factors such as interest rates, inflation and employment rates needed to be evaluated and watched at what potential impact they will have on the business. For Quicken Loans it is very important to have lower interest rates and unemployment rates as this drives more volume of mortgage being originated or refinanced. The more volume of activity that occurs the more profitable the company is, however the downside to this is being conservative to ensure you are not lending massive amounts of funds that potentially no profit will be made or to consumers who will default on their obligations.
Social factors that are external which would impact a business would be the area the business is located in, employee population being hired and also the business involvement within the community. Quicken Loans has an established community involvement and is actively working with members of the community in non-profit areas to assist in an increased positive culture. Family, friends, colleagues, neighbors and the media are social factors. These factors can affect our attitudes, opinions and interests. So, it can impact sales of product and revenues earned.
Technological factors has been something that Quicken Loans has been able to capitalize on and make benefit them. They launched Rocket Mortgage which is a online based application process and continue to develop additional technology to streamline the origination process for consumers.
Quicken Loans must continue to do PEST analysis on their business to ensure they are keeping themselves out in front of the market trend and competition despite the externally challenges that might occur.
For Zookal: Please provide feedback to the above post and ask question if needed. I was advised to Discuss the PEST technique with respect to at least one each of the political, economic, social, and technical factors. Explain how this knowledge could be used in the strategic planning process within a company.