Retail industry in Canada (P.E.S.T) Analysis

There is no doubt that consumer’s play major role in driving the economic engine. Consumers are in today’s market place interacting with different marketplace than they were before. Consumers’ ability to take full advantage of the new marketplace is related to their socio-economic status and time constrain. Organization is open systems, which mean they interact with and respond to their environment. An organization takes inputs and processes those inputs into outputs. These inputs which organization consumes to produce output come from external environment.
Due to the fact that organizations interact with this external environment which are out of organization control researchers of this organization always looked for ways to describe and understand those environments and their potential impact on organization performance. These researches can be summarized from two different prospects.
1. The environment as a source of information.
2. The environment as a source of resources.
The external environment sectors comprise the specific environment and the general environment. The specific environment includes customers, competitors, suppliers, and other industry competitive variables whereas the general environment includes economics, demographic, socio culture, political legal and technological sectors.
The retail marketplace in Canada has been divided into two segments, big box stores move into the retail shopping industry at much faster rate that trigger the decline of the traditional department store, and a number of key retail sectors such as supermarket and drug stores are dominated by a few large players.

A. Political-legal
• NAFTA (North America Free trade Agreement) has changed retail market structure in Canada. A number of large foreign retailers mainly from United States have established a significant