Pest analysis arcelik as and white goods industry in Turkey - Essay Example

The acronym, PEST, is used to describe these macro environmental factors. Turkey has eight major producers in its white goods industry, with Arcelik A.S. being the leading producer in the market. The PEST factors are going to be studied in relation to Arcelik A.S. and the white goods industry. In very generic terms, political influences deal with the government regulations under which the business has to operate. These deal with tax policies, government support, employment laws, trade barriers and restrictions, environmental regulations and political stability.

It may also include laws to restrict the formation of monopolies. The economy of Turkey is politically instable and the government has been implementing an IMF controlled restructuring and reform programme since 1999 which may have the desired effect to stabilize the conditions of the country and increase consumer demand for elastic products manufactured by Arcelik A.S. Moreover, Presidential and Parliamentary elections were held in May and November 2007 which increased political unrest and affected the white goods industry and its leading producer, Arcelik A.S. The high tax expenses that Arcelik A.S. incurred in the year 2007 weakened its financial position while close political ties with United States imposed hardships on Arcelik A.S. and the white goods industry in terms of the Iraq embargo.

The government of Turkey has harmonized its commercial laws and regulations with the European Union which imposes restrictions on companies like Arcelik A.S. According to Biesen (2007), Temel, who is the coordinator of corporate relations for Arcelik A.S. and a staunch believer of rules and regulations states it is crucial for the company to follow the regulations and standards imposed globally and by the government to prevent violation of consumer rights. Economic factors affect the purchasing power of the consumers as well as the