- Political factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law,trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation
- Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy
- Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers).
- Technological factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.
- Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.
- Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.
To analyse our company in accordance to PEST.
Political -
We are an Ethical business based in the culture sector, which is owned by the Government. As we are based primarily in Leeds and the surrounding areas, we boost the local economy.
Being in a tough economic climate, it is a hard time for small businesses to run and become successful. Its also tough for those paying for our work, what their able to pay will be affected by how much they earn as a company themselves, as whether the work, produced by ourselves, will in return be profitable. The labour law needs to be taken into consideration too, it will determine the legal right and restrictions of working people; there will need to be fair working contracts set in place. As Graphic Designers, employers can be all over the world, but with working with people overseas, you will need to take into account trade restrictions between certain countries.
Economic - Government funded - secure business, wont apply - interest rates, exchange rates and the inflation rate. Creative industries contribute almost 3% of the UK’s Gross Value Added per year, Exchange rates?
We as a business need to be aware of the economic growth within the UK. This will help us understand and identify goods and services that need to be promoted in order to boost a healthy economy, for example new and innovative products which need branding for. There needs to be a fine line between compromise and ensuring ourselves a wage to live from.
Work produced by our business
Understanding inflation rates will mean I understand my clients needs, alongside my own needs in regard to living costs and how it could possibly effect my wages.
Social - Trends will effect any design work we produce, and how we operate and management strategies. Our company consists of just 4 employers of the same age range, as were a starting business we don't intend on employing any more workers to save on costs, so as of yet, there will be little social change in accordance to employment, and management strategies regarding social trends.
Design factors which need to be considered are religion, ethnicity, education, economic status and nationality. Especially when working with over seas jobs, language will be a main factor to consider. Being sure you don't offend people (unless that is the objective) is obviously another large factor, which relates to knowing about all the above design factors to consider.
Technological -
Technology as a massive effect of time, on how long we take to produce, make, print and distribute our products. The more up to date with technology, the more efficient our production rate.
The way we work and approach briefs also relies on technology, we need to stay up to date and have constant upgrades on software and hardware, which will effect finance. This will effect costs as upgrades can be expensive, especially with being a Graphic Design company which work primarily on Apple Software. For our company to keep up to date with social trends, we need such software upgrades, as it effects the quality of our products and outcomes.
Environmental -
Workload may increase during the winter period as it is a peak period in the entertainment sector in accordance to theatre.
We are an ethical company, it will effect the products we offer. Cost of paper good and stock will be of more expense due to its ethical nature, but this may not effect us directly as work sold and pricing could reflect this.
There is a new market based on making people aware of climate change; this offers us, as creatives, a new line of work and potential. Many existing companies want to promote their selves in this way, we could be the designers to make this happen.
Legal -
Copyright, this can massively effect how the company operates as it can effect cost, this also effects our work in the sense we can't do what's been done before (with a copyright symbol). Solicitor fees etc. Accountancy (taxes), also as a partnership you don't register with company house.
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