VALLE ADDED CRITIQUE The PEST or PESTLE analysis tool has been widely used since it helps firms

understand the different angles in the environment where they are operating; could be for market growth or decline, business position, potential and direction for operations. This has become a starting point for the analysis of an organizations external environment and the forces at work here. It has been used by leaders and managers globally to build their vision of the future. This tool seems to be an essential element for firms to succeed with their objectives. This helps them direct the path towards their goals. effectiveness of this analysis depends on the way it is used. The effective use of this tool ensures that the activities of the firm are still positively aligned with the powerful forces of change that are affecting the surrounding environment and even the world. It has made firms realized that taking advantage with the changes is more likely to contribute success than opposing to the changes. Likewise, the proper use of this tool also helps the firm avoids taking actions that are destined to fail for reasons beyond the firms control. Thus, firms become cautious of the situations that may contribute to the failure of their business. More importantly, this type of analysis is most preferably used when firms enter a new market or country. Firms can already avoid hasty and insensible assumptions which may just ruin the goal especially when assumptions become illusory. With the presence of these diverse changes in the world, firms can take advantage of the opportunities and minimize threats that lie within the environment they are operating. The can fully utilize this advantage in order for the company to obtain a context which will help them with gain a more detailed planning. The meaning that each letters in the PEST or PESTLE bears differs on its meaning and the subject of its analysis. Despite of these differences, their subjects however, has roles for each one of them. Like, Political Analysis affects the Economic analysis. All of them are significant in the organizations success. However, the inclusion of the legal and ecological factors received doubts from literatures. The importance of these two factors certainly just differs from industry to industry. If such factors have high relevance on the industry, then must be analyzed separately. Otherwise, the firm can just allocate them to other categories in the analysis. However, the real value and the

PEST and PESTLE analysis main aspects focuses mainly on how th organization cope up with their changing environment. Economic conditions affect how easy or how difficult it is to be successful and profitable at any time because they affect both capital availability and cost, and demand. The timing and qualified success of particular strategies can be influenced by economic conditions. When the economy, as a whole or certain sectors of the economy, are growing, demand may exist for a product or service which would not be in demand in more depressed circumstances. Similarity, the opportunity to exploit a particular strategy successfully may depend on demand which exists in growth conditions and does not in recession. Although a depressed economy will generally be a threat which results in a number of organizations going out of business, however, some may consider them as their opportunity..

Economic conditions are influenced by political and government policy. These conditions are he major influence affecting government decisions. Say for example, imported and exported products can be seen expensive or inexpensive depending only on the currency exchange rates. The sociocultural environment summarizes demand and tastes, which vary with fashion and disposable income, and general changes can again provide both opportunities and threats for particular companies. As time pass by, products change from being a novelty to making the market saturate.,When this happens pricing and promotion strategies have to change. Organizations should be aware of demographics changes as the structure of the population by ages, affluence, regions, numbers working and so on can have an important bearing on demand as a whole and on demand for particular products and services. Threats to existing products might be increasing: opportunities for differentiation and market segmentation might be emerging. Technology is widely recognised by various literature on strategic management (Capron and Glazer, 1987; Johnson and Scholes, 1993; Jan, 2002), as part of the organization and the industry part of the model as it is used for the creation of competitive advantage. However, technology external to the industry can also be captures and used, and this again can be influenced by government support and encouragement. Technological breakthroughs can create new industries which might prove a threat to existing organizations whose products or services might be rendered redundant, and those firms which might be affected in this way should be alert to the possibility. Equally, new technology could provide a useful input, in both

manufacturing and service industries, but in turn its purchase will require funding and possibly employee training before it can be used.