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WalesBusinessQuick questions
Business in a Changing World (A2 Unit 4)
Quick questions on PEST analysis - WJEC A-Level Business
6short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What are political factors?Show answer
Political factors are the effects of government and politics: taxation (corporation tax, VAT), regulation and legislation (employment, health and safety, environmental rules), government spending and policy, trade policy (tariffs, agreements) and political stability. A change such as a tax rise or new regulation can raise a firm's costs or open or close markets.
What are social factors?Show answer
Social factors are changes in society: demographics (an ageing population, migration), lifestyle and attitudes (health-consciousness, working patterns), culture and values, and ethical and environmental expectations. They shift what customers want and how firms are expected to behave, creating both opportunities (new products) and threats (declining demand for outdated products).
What are technological factors?Show answer
Technological factors are advances in products (new goods to sell), processes (automation, more efficient production), the internet and e-commerce (new ways to reach customers), and data and communications. Technology can lower costs, create new markets and products, and disrupt firms that fail to keep up.
What is using PEST?Show answer
PEST is used to scan the environment before making strategic decisions, sorting external forces into the four headings to reveal opportunities to seize and threats to counter (it links closely to the SWOT opportunities and threats). Its limits are that it only identifies factors (it does not decide), it dates quickly in a fast-changing world, and judging each factor's impact is uncertain - so it must be updated, prioritised and combined with judgement.
What is q1?Show answer
What do the letters in PEST stand for? [2 marks]
What is q2?Show answer
Explain how a rise in interest rates (an economic factor) could affect a business. [3 marks]
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