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  1. business-and-its-environment

    enterprise
    6 主题
  2. business-structure
    6 主题
  3. size-of-business
    3 主题
  4. business-objectives
    3 主题
  5. stakeholders-in-a-business
    2 主题
  6. external-influences-on-business
    12 主题
  7. business-strategy
    10 主题
  8. human-resource-management
    human-resource-management-hrm
    8 主题
  9. motivation
    4 主题
  10. management
    2 主题
  11. organisational-structure
    5 主题
  12. business-communication
    5 主题
  13. leadership
    2 主题
  14. human-resource-strategy
    3 主题
  15. marketing
    the-nature-of-marketing
    7 主题
  16. market-research
    3 主题
  17. the-marketing-mix
    6 主题
  18. marketing-analysis
    5 主题
  19. marketing-strategy
    3 主题
  20. operations-management
    the-nature-of-operations
    3 主题
  21. inventory-management
    2 主题
  22. capacity-utilisation-and-outsourcing
    1 主题
  23. location-and-scale
    2 主题
  24. quality-management
    1 主题
  25. operations-strategy
    4 主题
  26. finance-and-accounting
    business-finance
    2 主题
  27. sources-of-finance
    3 主题
  28. forecasting-and-managing-cash-flows
    1 主题
  29. costs
    4 主题
  30. budgets
    1 主题
  31. financial-statements
    4 主题
  32. analysing-published-accounts
    6 主题
  33. investment-appraisal
    2 主题
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Conducting a PEST analysis

  • PEST analysis examines the external factors that are likely to impact the activities and outcomes of a business

    • Political

    • Economic

    • Social

    • Technological

  • PEST analysis can support effective decision-making by senior managers

    • It helps them to better understand the complex context within which the business operates

    • Understand the potential threats to the businesses’s performance

    • Identify future difficulties so that appropriate strategies can be implemented

PEST factors

Factor

What is considered

Example strategy

Political

  • Government stability, trade rules, taxes, minimum-wage laws and health and safety regulations

  • A higher sugar tax pushes soft-drink makers to launch low-sugar recipes.

Economic

  • Inflation, exchange rates, GDP growth, unemployment, cost of living

  • Rising fuel prices raise delivery costs for online retailers.

Social

  • Demographics, lifestyle trends, ethics, climate concerns, recycling culture

  • More eco-conscious shoppers boost sales of refillable toiletries.

Technological

  • New production methods, R&D, digital platforms, automation and communication tools

  • Faster 5G networks let video-streaming firms offer higher-quality content on mobile devices.

Using the information from a PEST analysis

Case Study

Airbnb’s external influences

Illustration showing Airbnb logo concept: places pin, people, heart for love, letter 'A', forming a stylised Airbnb logo on a yellow background.

Airbnb connects travellers with hosts who rent out spare rooms or whole homes in over 190 countries. In 2022 it still made nearly US $2 billion in profit, and hosts in cities like New York generated over US $1 billion and thousands of full-time-like jobs. Rapid growth has led to fines in Barcelona, New York and New Orleans for unregistered rentals and unpaid tourist taxes, and political events—such as the Ukraine war—forced Airbnb to suspend services in Russia and Ukraine while waiving fees and offering free stays to displaced Ukrainians.

Despite a travel slump in 2020–21, the platform remains popular because guests prefer cheaper, home-style stays, and Airbnb promotes “social impact” experiences that donate proceeds to charity. Its app and website—used by over ten million people—handle bookings, reviews, automated messaging and host training, so any technical glitch or data breach could quickly erode trust.

Airbnb also highlights environmental benefits: sharing existing homes uses less energy than hotels, and guests are more likely to take public transport, walk or cycle. Still, some neighbourhoods complain about noise and fewer long-term rentals, prompting Airbnb to tighten host rules and improve compliance with local regulations.

PEST Analysis for Airbnb

Factor

Key points

Political

  • Local tourism rules differ widely

  • Fines in Barcelona, New York and New Orleans show the cost of breaking them

  • Wars or sanctions can close markets (e.g. Russia)

Economic

  • COVID-19 and the global slowdown cut travel in 2020-22

  • The platform still earned US $2 bn profit in 2022

  • Extra income for hosts boosts local spending

Social

  • Guests like cheaper, home-style stays
    Company supports causes (e.g. free rooms for refugees)

  • Complaints are received if rentals disturb neighbours or dodge taxes

Technological

  • App and website handle all bookings and reviews

  • Automation answers messages; webinars train host

  • Trust relies on star ratings and secure payments.

Strategies for Airbnb

  • PEST analysis helps managers develop strategies to capitalise on positive external influences and minimise the impact of negative external influences

  • In this case, Airbnb may choose to adopt one or more of the following strategies

    • Add automatic rule checks

      • Ask hosts to enter their licence numbers when they list a property, and then collect any required tourist taxes automatically

      • This would help Airbnb avoid fines by making sure every host follows local laws before a booking is confirmed

    • Encourage longer stays for remote workers

      • Offer special discounts and set up homes that have desks and reliable Wi-Fi so people working from home feel comfortable

      • This way, Airbnb still earns steady income even when fewer people are travelling for short vacations

    • Give eco-friendly hosts a boost

      • Mark homes that save energy or cut waste with a special badge, and make these listings appear higher in search results

      • Guests who care about the environment will spot these homes first, which encourages more hosts to follow green practices

    • Use AI to improve trust and safety

      • Let computer programs learn to spot fake or risky listings, delayed host replies and suspicious behaviour

      • When the system catches problems early, guests feel safer and the Airbnb brand is stronger