Social factors are demographic and cultural considerations that affect potential market size and customer needs. A demographic map may reveal a change in the composition of certain age groups like an increase in the retirement age population and this in turn may affect future supply of manpower. A nation with a large immigrant population may discover that certain products or brand names may be taboo to them and if strategic planning fails to identify it sooner, a product or brand name may be launched and may be a disaster due to the cultural factor.
Health consciousness is a social factor that is sweeping across the world. What formerly fat was considered healthy, not anymore. Business or organizations in any industry are in one way or another affected by this. Their strategic planning has to incorporate this social factor. This social factor affects the food industry food labels may have to contain certain health information, if affects the fitness industry “exercise and health enhancing equipment has to be designed and redesigned for this emerging factor and it affects certain kinds of spending “people may decide to ride on bicycles instead of driving their cars.
The population growth rate is another social factor worthy of attention. Producers of infant products: toys, clothes and food may find themselves struggling when the national birth rate drops. Advance information on this social factor may help strategic planning decide when and where to go. In a scenario of a substantial drop in national birth rate, the wisest thing to do might be to concentrate on nations and markets where the birth rate is high and has the potential to go higher.
Age distribution and career attitudes are other social factors that affect business or organizations. Nations that experience a rise in the young working population are apt to the challenge for more business and industry openings because it can provide the necessary manpower. The attitude of many young workers to switch workplaces frequently due to compensation factors may be a wake up call to business or organizations that their salary standards may need revision and recalculation.
Technological factors are those that affect the industry and workplace. Factors like increased efficiency due to automation or increased dependency of computerization may well be interesting as it is brought to strategic planning. Since our world is technologically driven these factors affect the entire nation as a whole not just industry or the workplace.
Research and development activity is a must to keep up with technology and the workplace. This factor may influence the workplace in that research and development may develop intelligent automation to perform certain things and so start getting rid of people or it may develop gadgets that will allow anyone to work anywhere depending on which industry you belong.
Technological change is by far the single factor that may affect everything. Technology has been changing so rapidly it is changing the way we live, the way we work and the way we direct our lives. People, workers and organizations in the west pride themselves in the technology connection; they are connected to one another via wireless technology, computer technology, satellite technology and so on. However, those in the east and those in the third world countries are not far behind. Mobile phones are not luxuries but necessities in Asia and Africa. Equipment manufacturers are even testing their equipments in Asia, knowing that technological change is these areas would mean long-term profits for business or organizations.
The PEST factors of political, economic, social and technological combined with the macro environmental are external factors that strategic planning must not fail to consider. These factors may alter certain perceptions in the SWOT analysis; factors strategic planning must not miss to increase its rate of success.