Evaluate PESTEL factors in Beatles store in London Essay

Evaluate PESTEL factors in Beatles store in London - Essay Example However, later, analysts decided to extend it and include the last two factors as well, giving rise to PESTEL. A PESTEL analysis essentially measures a market. It can be used in conducting marketing and business development related assessments, and can assist in the decision making process of an organization(Hall,2008). It must be noted that the Beatles’ store in London, is a real treat for all the diehard fans of the infamous UK based band called â€Å"the Beatles’ of the 1960s. A large range of memorabilia, ranging from clothing, bags, mugs, and magnets, to miniature guitars, drum kits, old and new records, various autographed items and figurines, everything Beatles related can be found at the store. The store is located at baker street, which was an area originally high class residential, but now is mainly occupied by commercial premises. To gain a better understanding, each factor must be broken down and each component needs to be analyzed separately. Political fac tors address the degree to which a government can intervene in an economy. These factors primarily include tariffs, tax policy, trade restrictions, provision of merit goods, restrictions on demerit goods etc(Middleton,2007). it may also include education, health and a nations infrastructure, all of which are greatly influenced by government intervention. One basic legal legislation that may hamper sales for the store is the decision of the government to impose a GST of 20% (increased from the initial 17.5%) in January 3 2011(Jones,1998). Economic factors include the basic economic ideals such as interest rate, exchange rates, inflation rates, unemployment rate and economic growth. These factors have a massive impact on a businesses operating activities. For example, the inflation rate can determine whether or not people will consume certain goods and services given their real incomes at current inflation rate. Economic conditions affect the feasibility of success and profit at any g iven time, as they have an impact on capital availability, demand and cost. If the demand is extremely high and coupled with low economic cost, it will be profitable for the firm to invest in such a business(Libecap, 1996). The kind of strategy implemented depends on the economic conditions prevailing at the time. If the economy as a whole, or certain sectors of the economy for that matter are expanding, products and services may have more expansive markets and higher demands than during recessionary times. If employment level is high and income levels in turn are high, people in general will demand more as they will have more money to spend in disposable terms. In relation to the store, the fact that the UK economy has just come out of the credit crunch may help in keeping intact the fear of the last economic recession that was not too long ago, which in turn may also hamper growth of sales for the store. Consumption growth has slowed down after the credit crunch of 2008-2009 and i s expected to grow by only 0.6% in 2011 and 1.3% in 2012. By 2015 growth is expected to increase by 2.3% if the government abides by its current economic policies and the spending is continuously financed by extra debt (REFERENCE:  Larry Elliott Economics editor, The Guardian, Monday 4 April 2011). However, this may be a reason to worry in the longer run as spending is financed as a result of economic policies through which