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CONTINUING PROFESSIONAL DEVELOPMENT
1. Which of the following statements
regarding the PEST model is
a) The PEST model is useful in analysing
strengths and weaknesses of specific
internal business operations.
b) Political forces include tax policy
and legislation, deregulation and
c) Demographical, economical and
technological factors are examples of
external forces that influence business
d) An ageing population and attitudes to
health are examples of sociocultural
forces within a business’s operating
a) Can be internal or external to a business
and directly affect business operations.
b) Stakeholders can be affected by internal
forces however not external forces.
c) Have an interest in an organisation and
are affected by its performance.
d) Both b and c are correct.
3. Which of the following statements is
a) The PEST and SWOT models are
both useful in analysing operating
environments and can be used
b) Managers should aim to feed
information gained from a PEST analysis
into a SWOT analysis.
c) Sociocultural forces create passive and
more evolutionary changes.
d) Both b and c are correct.
4. Which of the following statements is
a) It is easy for businesses to gain
advantages over their competition
through technological advances.
b) Consumers who are more educated are
an example of a force within the E of the
c) Pharmacy owners shouldn’t worry
about economic forces as consumers
will always need medicine.
d) Political forces are very relevant to
pharmacy given it is a highly regulated
model he comes up with a number
of influences relevant to his business
within his operating environment and
shortlists the most influential and hence
the ones to apply focus. His shortlist
focuses on political issues as these seem
to be the largest influence and what he
can see will have more long lasting or
permanent impact on his business.
The political landscape within his
PEST analysis highlights PBS reform,
deregulation and changes to pharmacy
ownership and location laws as the big
potential influences on his business. PBS
reform has already affected his business
particularly as most of his revenue
and profit derives from the dispensary
business of his pharmacy.
Deregulation is a threat for Ken’s
business particularly as a medium size
supermarket has been opened next to
his business. Having a local supermarket
offer the products Ken does, and
potentially at a lower price given its
buying power, poses a business risk
Pharmacy ownership laws and location
laws pose a threat should current
legislation be opened up. Should a
pharmacy be allowed to open up within
the new adjacent shopping centre, Ken
risks losing a portion of his customers and
Ken realises that these political threats
identified through his PEST and SWOT
analysis are not controllable. He realises
he needs to develop some contingencies
within his strengths and opportunities to
minimise the impact of potential political
changes which threaten the status quo of
It is critical that business owners and
managers thoroughly understand the
internal and external environments
in which they operate.2,3,6 The SWOT
and PEST models provide frameworks
for managers and business owners in
understanding such environments and
to plan and prepare for business success
amongst the ever changing business
Business owners and managers also
need to be comfortable with change that
continues to be a feature of everyday
organisational life – new technologies,
new legislation and policies, evolving
economical climates, new services,
Effective business owners and managers
are able to live with change, look to the
future, see change as an opportunity,
develop their own coping strategies and
accept that nothing is permanent.
1. Education Portal. Internal and external environments of
business: lesson and quiz. . At:
3. Kotler P, Adams S, Brown L, et al. Principles of marketing.
2nd edn. China: Pearson Education; 2003
4. Hill CWL, Jones GR, Galvin P. Strategic management: an
integrated approach. Milton,QLD: John Wiley and Sons;
5. Henry A. Understanding strategic management. 2nd edn.
New York: Oxford Publishing; 2011
6. Jurevicius O. PEST and PESTEL analysis. 2013 At:
8. Walker OC, Boyd HW, Mullins J, et al. Marketing strategy – a
decision based approach. 4th edn. New York: McGraw-Hill
9. PESTLE - Macro environmental analaysis. 2009–2012.
10. Flanagan N, Finger J. The management bible. Toowong
QLD: Plum Press; 2003
11. Robbins S, Millett B, Cacioppe R. Organisational behaviour
3rd edn. Sydney: Prentice Hall; 2001
12. Stone RJ. Human resource management. 5th edn. Milton,
Queensland: John Wiley and Sons; 2005
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