Introduction
In the world of print media, the external environment surrounding any given organization or media house is very significant to its operations and general existence. Women are known to be very fashion-savvy hence any lack of relevant information in the world of women’s fashion may mean a lack of business to this firm in particular. As an executive sales and marketing officer, I have been assigned the role of researching to find out the external factors that affect our operations as the printers and publishers of “Modern Diva”, a women’s weekly magazine. Apart from the internal environment that relates to the management of the organization itself, the general external environment determines the policies that the organization is going to adapt in making day-to-day decisions. This paper discusses the external environment of the magazine.
External environment
An external environment in this context does not involve the physical surroundings literally but rather the relevant business environment of the organization. The environment may impact the business positively or negatively depending on the relationship. The best way to capture the influence of the external environment on any business entity is to carry out the PEST analysis test based on facts alone to give the test credibility. (David and George, 2004)
PEST analysis test
The word PEST is an acronym for various factors as follows
- Political,
- Economic,
- Socio-cultural
- Technological factors.
The test is aimed at looking at the various factors and how they influence the organization’s operations. Recommendations are also made to counter the negative effects of the factors or to fully utilize the benefits facilitated by any of the factors. All these factors are not constant as they keep on changing from time to time and thus this test should be carried out continuously to channel information to all aspects of planning. (David and George, 2004)
Political factors
Politics in a given region or country determine the absence or presence of war or peace in the most basic terms. Government policies on various issues also have a direct effect on the performance of the magazine in the market or the organization itself.
In the most literal terms, a war interrupts almost every sector of the economy in that business firms cannot carry on their operations without fear of their staff and investments’ security. In our case, the project of going international with the distribution of the magazine will be affected in that it would be expected that our distributors may close down their businesses thus hampering with the circulation and sales in case of war in the new market.
Another aspect is the government’s policy on taxation, view on religion and culture, marketing ethics, economic performance, and trading regulations. Of the mentioned issues taxation is most significant since it has a direct effect on the profits of the organization. Taxation may be directed to the company itself or the input materials of the company such as paper and printing machines. In this case, a better understanding of the taxation policies upheld by the government is necessary which can be achieved by conducting a study on the subject before the actual entry into this business is made. Sudden uncalled-for changes in taxation policies should be discouraged by partnering with the government in the formulation of such policies or lobbying against such.
Modern Diva is primarily involved in fashion wear for women and as such, some fashion depictions by our magazine may not be parallel to the government’s stand on culture and religion. Clothes designers and clothing stores make up around 40% of our total revenue sources through advertisements and sponsorship deals. Some of their advertisements may be considered morally offending by some governments depending on their religious and cultural inclinations. Cuba has been openly against western influences on their masses by limiting the amount of western contact that their citizens have as facilitated by mass media. Others and especially the Islamic states are against the exposure of the female body very common in our line of duty. To avert the possibility of encountering such a problem the company should be selective in where to market our product.
Economic factors
The economic factors are mainly related to our target market more than the company itself. Modern Diva primarily targets the modern working woman who is fashion conscious and is financially enabled to move with the changing fashion. It is therefore rational to concentrate our marketing energy in a country that has a high employment rate that will guarantee the same for women. This is a major consideration on our part as the company is planning on officially going international at the beginning of next year as one of our many expansion programs. In doing so the economic performance of the target countries is under heavy scrutiny to help us understand the projected economic paths that the current situation promises. The inflation rates will also determine the pricing criteria used in the case of going international. (Kinnear, 2003)
The best way forward for the company is to restrict our operations in countries and regions that have conducive working conditions for the operation of our business. The interest rates of such countries should be fair enough to allow for distributors and our partners to obtain financing to expand and carry out their operations smoothly.
Socio-cultural factors
These factors are mostly religious and cultural practices of a given people or society. We look at how these practices impact our business. Operation in some countries may be limited due to such religious beliefs of the people in question. One of the major hurdles that the company experienced in the marketing of Modern Diva is the perpetual discrimination of women in the workplace and society. The result of this is that women have lost their confidence in a male-dominated world where they find it offensive to treat themselves to our magazine without the consent of their male partners. As an English-only magazine, our operations are limited to only English-speaking countries as the attempts to make translated versions have been met with technical difficulties. (Trochim, 2001)
More investment and goodwill should be employed in the realization of this dream.
Technological factors
Technology is a major driver in the growth of an economy and globalization at large. The level of our technology in our operations has not been moving at the same speed as universal standards. The lagging behind in technology employment is responsible for the failure of the company to produce translated versions of Modern Diva. Communication between the parent company and the distributors may experience some problems given that not all regions develop equally in technology. Internet communication may not be available in some regions. The level of technology available determines the methods applied in promoting and advertising the said product. The available method of communication should be utilized fully with the prospect of the company making its arrangements on how to carry out communication within its organs. Lack of internet communication can be attributed to lower levels of unit sales due to a lack of internet marketing. (Trochim, 2001)
Business Intelligence sources
Knowledge is the power they say. In the business world, information is power likewise. For the best bargain of power therefore we have to seek reliable sources of information on which our decision as a company is going to be based. Business intelligence refers to technologies, applications, and practices employed in the collection, integration, analysis of information to suit the application in business. Many companies prefer to conduct their researches to obtain information regarding their position in the market or their competitors or to identify the performance of their products in the market. For this case, the information used in carrying out this PEST analysis test was from my research as one of the company staff. In gathering this information I made use of the company’s key performance indicators pitting them against a background of expected and prevailing political, economic, socio-cultural, and technological factors that the company is expected to meet.
Information can also be obtained from relevant government authorities to provide information relating to the government’s policy on different issues that may influence the performance of the company and the magazine in the market. Sociologists should also be sought to provide their input in analyzing the behavior of women to give a sneak preview of the situation.
References
David Aeker, V. Kumar & George Day Marketing research 6th Ed, New York: Wiley & sons, 2004.
Kinnear, T. & Taylor, J. Marketing research: an applied approach London: McGraw-Hill, 2003.
Trochim, William. The research methods knowledge base 2nd Ed New York: Prentice Hall, 2001.