PEST of Alibaba A PEST analysis helps you to know how those factors willaffect the performance of the company in the long-term. It was created by Harvardprofessor in 1967 to determine a company’s overall performance.
This PEST analysis provides a great detail about thechallenges Alibaba will face and each explain each one of the four names. Political: These factors determine to what extent thegovernment has an influence on the economy or an industry. Political factors playan important in the factors that can affect the company long term profit in certainmarkets or countries.
Alibaba operates as a specialty retail, in some countriesit exposes itself to different political environmental and political risks In more than 200 countries.Political stability and importance of specialty retainTrade regulations & tariffs related to services (Brexit tariffs)Anti-trust laws related to specialty retailPricing regulationsTaxation- tax rates and incentivesWage legislation – to comply with minimum wage and overtimeMandatory employee benefitsIndustrial safety regulationsProduct labelling in speciality retailE-commerce development plans Economic: factors such inflation rate, saving rate, interestrate can be taken into account. Alibaba can use the country’s economic factorssuch as growth rate, inflation and industry economic indicators.
Brexit –UK market very importantExchange rates and stability of the country currencyThe efficiency of the financial marketInfrastructure standard quality in speciality retailLevel of skill in the workforce in speciality retailThe education level in the economyThe cost of labour and productivity in the economyBusiness cycle stages such as prosperity, recession orrecoveryEconomic growth rateUnemployment rateInflation rateInterest ratesGDP per capital Social factors: shared beliefs and attitudes of thepopulation have an important role in how marketers at Alibaba will understand thecustomers of a market. Demographics and the skill level of the populationInternet access and knowledge The class structure, power structure in the societyThe education level as well as education standard in theAlibaba industryCulture (Gender roles, social conventions)Attitudes towards health and safety, environmental and consciousnessLeisure interestsTrust in the businessLatest trends and fashion Technological factors: Technology is important as everycompany relies on technology analysis as well efficiency of the technology. Recent technological development by competitorsThe technology impact on product offering The impact on cost structure in speciality retailThe impact on value chain structureThe rate of technological diffusionSecurity of the productsCredit card safetyRapid development of high speed network serviceThird party payment system such as PayPal