Business Studies Paper on P.E.S.T Analysis For T-Mobile

P.E.S.T Analysis For T-Mobile

T-Mobile is one of the main providers of data communication and wireless voice services in the United States. The company also offers PDAs, tablets, phones, and accessories from various vendors, such as Nokia, Apple, and Samsung. Additionally, it provides low-cost, non-contract mobile services. PEST analysis is useful in examining –Mobile`s external environment. Thus, it is an efficient tool used in the examining the company`s macro-environment. The abbreviation PEST stands for Political, Economic, Social, and Technological. The analysis will help in determining the available opportunities and possible dangers in the U.S. telecommunication industry.

Political Factors

            America is the world`s oldest democracy. The country operates under a federal system comprising of the national government and the states. T-Mobile’s business activities have grown and thrived largely due to the nation`s stable political climate. In the North and Central American region, the U.S. is among the countries with the lowest level of political risk (PRS, 2017). Democratic elections are held after every four years. One of the main political factors that affect business activities in the country is tariffs, which is used by government to restrict trade on imported products. The U.S. sometimes uses protective tariffs to protect domestic manufacturers from foreign competition. However, since T-Mobile operates in the service sector, it has not benefited much from these restrictions. As a whole, the political climate remains largely stable and its unlikely to impact the company`s operations negatively in the foreseeable future.

Economic Factors

The economic recession experienced in the United States from 2007 to late 2012 resulted in low interest rates that have prevailed to date. T-Mobile can benefit from it in two ways. Firstly, the business can get loans at reduced interest rates and use the funds to finance its fixed assets and expand operations. Secondly, the recession also affected T-Mobile negatively as many people lost their jobs and disposable incomes declined. However, in the post-recession period the purchasing power of American households has increased. The prevailing low interest rate has boosted economic productivity, created more jobs, and increased people`s disposable incomes. The economic factors will continue to influence the corporation`s operations (EPA. (2017).

Social Factors

Social-cultural influences entail factors like age, class, gender, and demographics. It also entails issues like culture both local and global. As already noted, T-Mobile offers short messaging service (SMS), multimedia messaging service (MMS) that have enabled its customers to send and receive picture messages. The majority of the women use SMS and MMS and they are considered a social tool for interaction. In 2002, T-Mobile launched the General Pocket Radio Service (GPRS), which enabled the business to achieved significant success. Given the growing trend toward the use of android mobile phones, there is a significant market potential in this area. Moreover, the use of Wi-Fi and internet based services has increased due to increased adoption of mobile application Stores. Access to these services requires high-speed connectivity. Consequently, T-Mobile should position itself strategically to benefit from the new trends.

Technological Factors

The telecom industry depends on technology and hence, changes in technology influence it substantially. Nowadays, there is an increase in the use of mobile computing across the globe. Cloud computing and computers have become the core of productivity. Smartphone and tablet sales have increased and both require fast internet connection. T-Mobile is already working toward rolling out 5G network across the nation. The development will significantly revolutionize the industry and cause excitement among users. Additionally, the new technology is expected to reduce expenses for the providers and increase their connections many times. Therefore, technological factors are have substantial influence on the industry`s operations.

All in all, the telecommunication industry environment is stable. America`s political climate remains stable and predictable, making the country one of the leading investment decisions. Despite having suffered a recession, the economy has rebounded and employment and productivity are rising. Regarding the social factors, trends, such as SMS and MMS will continue to boost T-Mobile`s revenues. Moreover, technological innovations in the industry are critical for business success, which explains why T-Mobile is at the forefront in implementing the 5G internet technology.

 

 

References

EPA. (2017). The United States Experience with Economic Incentives for Protecting the Environment | Title-old | NCEE Economic Reports | Environmental Economics | US EPA. Available at: https://yosemite.epa.gov/ee/epa/eerm.nsf/a7a2ee5c6158cedd852563970080ee30/4336170c9605caf8852569d20076110f?OpenDocument [Accessed 17 Aug. 2017].

PRS. (2017). Regional political risk index. Retrieved from https://www.prsgroup.com/category/risk-index