Pestel Report Essay Example | Topics and Well Written Essays - 1000 words

Pestel Report - Essay Example Several mechanisms exist to study and audit the external environment and one of them is PEST. PEST Analysis, which stands for Political, Economic, and Social and Technological factors, is an important tool used for solving problems and for coming up strategies based on the market factors and also helps in understanding market growth thus aiding in the determination of the position, potential and direction of a business. This analysis is used to review strategy or position, a proposition or an idea. It â€Å"encourages proactive thinking rather than relying on habitual or instinctive reactions.† (Agarwal and Ramaswami). Among these factors, technological factors in the external environment could play a major impacting role in the functioning of the organization. Technology is something, which cannot be ‘static’, and will keep on evolving and upgrading. That is, new and new advanced technologies will be invented and developed throughout the world, without any satura tion. On those lines, sizable technologies are being developed that will have applications in the various industries or businesses, thereby impacting the functioning, decision making and strategy formulation of organizations operating in those industries. Particular technologies are being developed to have applications in particular industry, and so the organization has to function accordingly. Banking industry is no exception to this trend, as many banking centric technologies are being developed in the external environment, which is having impact on the functioning of various banks, particularly in relation to their customer service and Customer Service Management (CRM) (Buttle 1996) Before the advent of computers, information technology and importantly Internet, customers selected their banks based on how much well-located the branches are from their homes or offices. Then with the arrival of new technologies in the business of bank, such as Internet or online banking, credit car ds and ATMs, customers can freely select any bank for their transactions. So, technology is playing an optimal role in enticing the customers, with the number of customers increasing manifold. â€Å"Underpinning all of these changes in the way consumers live their lives are developments in IT and the subsequent creation of the interactive market-place†¦IT was used mainly to†¦sort our finances† (Baker 2003). The other reason why technology or the technological factors that arise in the external environment needs to be given utmost importance by the banks is because the customers are becoming well versed in technology particularly IT, with their profession and affluence playing a contributory role. â€Å"Your customer base is changing forever. Your customers are becoming more affluent, increasingly comfortable with technology, demanding of new financial services.† (Shesbunoff 1999). Because of this crucial role played by technology in the life of the prospectiv e or intended customers, apt and adequate technological aids needs to be installed as part CRM. Apt and adequate in the sense, banks and financial services can use supercomputers to retrieve customer’s needs, but at the same time they can also use smaller systems to retrieve the same customer’