Restaurant pest analysis
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A PEST analysis is a business tool that can help determine the macroeconomic factors that will impact a business. Specifically a PEST analysis measures the political, economic, social and technological factors that impact a business.
A PEST analysis of a restaurant can be useful for determining if the environment is appropriate for such a business.
Political factors deal with the degree to which the government influences and controls businesses. For a restaurant, the most important factors will be health regulations relating to food preparation. A restaurant will be affected by factors that affect other businesses as well, such as tax rates and labour laws.
Economic factors are extremely important to a restaurant. This is because restaurants are a luxury, not a necessity; people must have the disposable income to spend at a restaurant. Economic growth is, therefore, extremely important for restaurants. A restaurant will also be affected by the economic factors that affect most businesses such as the cost of capital and inflation.
- Economic factors are extremely important to a restaurant.
- Economic growth is, therefore, extremely important for restaurants.
The social factors of a market will have a huge impact on a business. For example, in a very health-conscious market, a restaurant should offer healthy foods, while in a market where people prefer high fat foods, they should not. Another important social factor is the attitude that people have toward restaurants and eating out; a restaurant stands a much better chance in a market where people prefer to eat out than in one in which people prefer to stay at home.
In general, the restaurant industry is a low-technology industry. If there are strong technological demands in a market, this may make it difficult to enter the market. In the restaurant industry, specialised equipment is the largest technological factor. For example, if all the pizzerias in a market use specialised ovens to cook their pizzas quickly, then it will likely be necessary to acquire such an oven to compete with these restaurants.
- In general, the restaurant industry is a low-technology industry.
- If there are strong technological demands in a market, this may make it difficult to enter the market.
Wendel Clark began writing in 2006, with work published in academic journals such as "Babel" and "The Podium." He has worked in the field of management and is completing his master's degree in strategic management.