The United States has the largest economy in the world, though it saw slowed growth after events like 9/11 and the recession in 2009. However, the economy has since strengthened due to increased business and consumer spending and lower unemployment. Politically, the U.S. has the oldest democracy with a federal system and three branches of government. It also has a progressive tax system and strong labor laws. Socio-culturally, an aging population and illegal immigration are concerns, though education and healthcare are highly developed. Technologically, the U.S. leads in research and development spending and innovation.
2. Introduction
What is PEST Analysis ?
This analysis is essential for an organization before beginning its market process .
Consists of internal environment and external environment .
P stands for Political Factors
E stands for Economic Factors
S stands for Socio Cultural Factors
T stands for Technological Factors
3. Political Factors
> This is the most important influence on the regulation of any business .
- How stable is the political environment ?
- Influence the Government Policy / Law on your business .
- Government’s position on Marketing ethics .
- Government’s policy on the economy.
- Government’s view on culture under region .
> Political system is responsible for Law making .
> Immediate laws which affect any business in general are Central Excise , Sales Tax / Vat ,
Corporate Income Tax , Personal Income Tax and Service Tax .
> Environmental Protection Law .
> Controls if any on Marketing Strategies
- Like Marketing / Advertising of Cigarettes , Tobacco , Alcohol etc.
4. > Control On Pricing
- like sugar , drugs etc.
> Government Policies on the Economy
- Role of Public Sector
- Role of Private Sector
- Role of Joint Sector
5. Economic Factors
> Government outlook towards
- Bank Financing
- Interest Rates
- Exchange rate Mechanism
- Incentives for Exports
- Restrictions for Imports
- Inflation
- Labor Policies
> Level Of Government Spending
> Avenues for Capital Creation
6. - Size Of The Capital Market
- Role of the Regulator
- Type of the instruments
- Nature of the Investors
> Business Cycles
> Cost Of Energy
7. Socio – cultural Factors
> Demographics and Distribution of Income
- Division of population – Male / Female
- Age group of the population
- Deposable Family Income
: Disposable Income in the hands of the different age groups.
: Education Level of the Age Groups
> Life Style Changes and Consumerism
- Attitude to Living
- Different Age Groups
- In the tune with available disposable Income.
8. - Thrust on taking care of present needs by spending than saving for the future.
- Joint living and nuclear families
- Availability of various media tools
- Reach of the media to the population
9. Technological Factors
Advantage of Technology
- In terms of economies of Scale
New Discoveries and Innovations
Speed and cost of Technology Transfer
Rate Of Obsolescence
10. PEST Analysis of U.S.A
Brief About USA
The United States of America is the third most populous country in the world, and the fourth
largest by total area.
With a population of over 318 million, the country is ethnically diverse and has the largest
economy in the world.
The country’s growth slowed down after the 9/11 attacks and the recession in 2009 added
to that as the economy contracted significantly.
However, the economy is now moving on steady course forward thanks to increase in
business investment, consumer expenditure and substantial decrease in unemployment.
11. POLITICAL system
The oldest democracy in the world
Federal System : National government and States.
National Government : Legislative , Executive and Judicial . Congress (they write U.S. Federal
Law ) Executive Branch ( Headed by president) Judicial Branch ( U.S. Supreme Court )
50 states in total , 48 locked within continental united states . Other two are Hawaii and Alaska
.
12. Taxation
The overall system of taxation in the United States is progressive.
Not only to those with higher incomes pay more in total taxes , they pay a higher rate of
taxes .
At the current time the highest total sales tax rate in the U.S. is 13.725 % in Tuba City , Airs .
(6.6% state sales tax , 1.125% county sales tax , and 6 % local sales tax ).
Federal Corporate income tax is imposed at graduated rates form 15 % to 35%.
All income subject to tax at 34% to 35 % where taxable income exceeds $ 335,000.
The average American will pay 19.8% of their income in federal taxes this year according to
the Tax Policy Centre.
13. LABOR LAWS
The Department of Labor enforces roughly 180 worker protection laws , ranging
from pay requirements to parental leave benefits.
Other Protection are supervised by agencies such as The U.S. Equal Employment
Opportunity Commission.
Some of the key federal protections offered to employees.
Minimum Wage
Health Coverage
Unemployment Benefits
Whistleblower Protections
Workplace Safety
Family Leave
Social Security
Employment Based Discrimination
14. Economic
With a GDP of over $16.760 trillion, the US is the largest economy in the world.
The economic system is well-developed and gathers its strength from its services and
manufacturing industries.
The recession in 2009 adversely affected the economy of the country and unemployment
rates soared to an alarming point.
But the economy bounced back with a growth of around 4% in the third quarter of 2014 as
consumers and businesses have stepped up spending.
However, the increasing budget deficit puts the economic prosperity of the country at grave
risk as the deficit currently amounts to a staggering $506 million.
15.
16.
17. Socio Cultural Factors
Like most developed countries, the US faces the problem of an aging population
which can lead to a serious labour shortage and rising tax rates in the future.
Nonetheless, the education and healthcare system is one of the best in the world.
A majority of the population has a liberal mind-set, but rising racial intolerance is a
serious concern.
Additionally, increasing illegal immigration is another concern, as there are
currently more than 11.7 million people living illegally in the US, further increasing
the risk of racial discrimination.
18. Technological Factors
Home to one third of the world’s scientists and engineers and accounts for one third of
global R & D expenditure .
Technological innovation within the private and educational sector has been increasing , with
each sector accounting for 70.0% and 14.0% of innovations , respectively.
The government's R&D is focused on defense ( 58.3 % of its R&D budget ) and the trend
may continue for the next couple of years .
ICT will also remain a driving force of the U.S. initiative .
