PEST Analysis:
“PEST Analysis is a technique for identifying and listing the political-legal, economic, socio-cultural and technological factors in the general environment most relevant to an organisation at that time.” – ()
P - OLITICAL
E - ECONOMIC
S - OCIAL
T – ECHNOLOGICAL
Each of these factors are considered and analysed. The results are used to influence the businesses in the long-term plans.
POLITICAL
A recession is an economic slowdown, which we have been facing recently. The government tries to cushion the blow of effects in several ways. Due to the recession people have not been able to afford debts they owe to banks and businesses. The government has put money into banks to help them to try and prevent businesses from stopping operating because of debts. They have encouraged banks to cut interests rates, from 5.5% to 0.5%. This was done so that more people could afford to borrow money and resulting in being able to spend more. If money is moving between banks, people and businesses it stimulates the economy and helps it grow rather than slowing it down. Lower interests rates benefits Cadbury, as they do not have to pay as much interest on their loans. It also benefits customers, as they will have to spend less money paying back loans and more money to spend. However people have been become cautious about loosing their jobs, as businesses are unable to afford all of their staff. This would lead to more people saving their money, instead of buying small luxuries, meaning Cadbury would suffer from sales. The government has also cut Value Added Tax from 17.5% to 15%. Less tax means chocolate prices have gone down and even more affordable and appealing to customers. However VAT is looking to go up in January 2010.
