Environmental analysis of business METRO Pest analysis Political influence The political arena has a huge influence upon

n the regulation of businesses, and the spending power of consumers and other businesses. You must consider issues such as: 1. How stable is the political environment? 2. Will government policy influence laws that regulate or tax your business? 3. What is the government's position on marketing ethics? 4. What is the government's policy on the economy? 5. Does the government have a view on culture and religion? 6. Is the government involved in trading agreements such as EU, NAFTA, ASEAN, or others? Other issues also include like. Tax policies Employment laws Environment regulations METRO analysis the environmen Trade restriction and tariff

t and see how stable the political conditions of a country are, the severity to which the political conditions are more unstable and disturbed the more difficult it becomes an organization to operate in that particular area. Therefore any organization that is entering a new market must first anticipate the political aspects of that country. The following are the factors regarding the Pakistani government which influences the workings of METRO Cash & Carry. o The political instability is the major factor of low foreign investment in Pakistan. Same is the case with METRO. The management always keeps in mind the thread of change in the government. They analyzed several times before entering the market of Pakistan and also before doing further expansion in this market. Inauguration of Lahore branch was conducted by former prime minister Shakuat Aziz and the new government can create certain problems for METRO as they are not the ones who were in power which this organization was started in Pakistan. The tax rebates and certain other favors given by the previous government can be set aside by the change of the government. The ineffective control of every government regarding the prices of products and inflation creates certain problems because customers demand products at the same and low price while in such conditions prices change rapidly. Any political activity regarding labor and political matters strikes creates hurdles in the way of METROs success. The rules and policies govern by the government also change by the change of authority and which have to be followed by the organization and the worst part is that rapid change in policies are observed in Pakistan.

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Government is encouraging the new entrant in the field of departmental stores and cash and carry concept which may be the huge dilemma because wal-mart and such chains are planning to enter this market.

Economic influence Marketers need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. You need to look at: o Interest rates. o Government intervention in the free o The level of inflation Employment level market per capita. o Labor cost o Long-term prospects for the economy o Business cycle stage Gross Domestic Product (GDP) per o Inflation rate capita, and so o Skill level of workforce o on. o Exchange rates and stability of host o Type of economic system in countries of county currency operation o Infrastructure quality If we take a look at Pakistans market, its economic condition is as such: Economical changes of Pakistan affects METROO cash and carry in such a way that the interest rates charged by banks can not only restrict the spending power of customers but also in the fund raising for the company. Interest rate is about 14.5% on deposits and 17% on loans. The rapid growth in inflation rate is the major factor influencing the spending power of buyer. Inflation rate in Pakistan is about 9.3% yarely which inflation of 3rd quarter was 21.5% approximately. Devaluation of money and increasing exchange rate discourages the investors to invest in pakistans market. Policies of state bank can be influenced by the existing political party and government and every person either business or separate citizen entity holder has to follow these rules governed by the state bank. Switching cost matters a lot in buying decision behavior of customer. The switching cost can be high in terms of time and the distance competitively the other specialized wholesale markets. Unfair distribution of wealth is the key factor of purchasing and also the major characteristics of third world countries. A persons spending only shifts from necessaries to luxuries with the increase in money it does not increase his spending. Sociocultural influence The social and cultural influences on business vary from country to country. It is very important that such factors are considered. Factors include: What is the dominant religion? What are attitudes to foreign products and services? Does language impact upon the diffusion of products onto markets? How much time do consumers have for leisure? What are the roles of men and women within society?

How long are the population living? Are the older generations wealthy?

Do the population have a strong/weak opinion on green issues?

With respect to Pakistan First of all society and the culture of Pakistan and its markets in not as much adopting to the change. They do not easily accept the new arrivals in any field of the product or services. So METRO cash & carry for cash kind of product still there is not a huge market. Although departmental store concept is already good here but it will take time for people to understand and develop the kind of shopping culture that METRO is offering. It is the habit of Pakistanis to buy goods from the nearest market on the day to day basis and needs. Most of the people here do not purchase the whole month grocery and other things at once. Secondly they prefer to buy on credit and to pay in installments. Technological influence Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points: Does technology allow for products and services to be made more cheaply and to a better standard of quality? Do the technologies offer consumers and businesses more innovative products and services such as Internet banking, new generation mobile telephones, etc? How is distribution changed by new technologies e.g. books via the Internet, flight tickets, auctions, etc? Does technology offer companies a new way to communicate with consumers e.g. banners, Customer Relationship Management (CRM), etc?