PEST Analysis

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Scanning the external macro-environment in which a firm operates. Explanation of PEST Analysis. STEEPLE.


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What is PEST analysis? Description

The PEST analysis is a framework that strategy consultants use to scan the external macro-environment in which a firm operates. PEST is an acronym for the following factors:

  • Political

  • Economic

  • Social

  • Technological

PEST factors play an important role in the value creation opportunities of a strategy. However they are usually outside the control of the corporation and must normally be considered as either threats or opportunities. Remember macro-economical factors can differ per continent, country or even region, so normally a PEST analysis should be performed per country.

In the table below you find examples of each of these factors.

Political (incl. Legal)




Environmental regulations and protection

Economic growth

Income distribution

Government research spending

Tax policies

Interest rates & monetary policies

Demographics, Population growth rates, Age distribution

Industry focus on technological effort

International trade regulations and restrictions

Government spending

Labor / social mobility

New inventions and development

Contract enforcement law

Consumer protection

Unemployment policy

Lifestyle changes

Rate of technology transfer

Employment laws


Work/career and leisure attitudes

Entrepreneurial spirit

Life cycle and speed of technological obsolescence

Government organization / attitude

Exchange rates


Energy use and costs

Competition regulation

Inflation rates

Fashion, hypes

(Changes in) Information Technology

Political Stability

Stage of the business cycle

Health consciousness & welfare, feelings on safety

(Changes in) Internet

Safety regulations

Consumer confidence

Living conditions

(Changes in) Mobile Technology


Completing a PEST Analysis is relatively simple, and can be done via workshops using brainstorming techniques. Usage of PEST analysis can vary from: company and strategic planning, marketing planning, business and product development, and research reports.

Variants of PEST Analysis

Sometimes extended forms are used, such as SLEPT Analysis (plus Legal) or the STEEPLE Analysis: Social/demographic, Technological, Economic, Environmental (natural), Political, Legal and Ethical factors. Also Geographical factors may be significant.

PEST Analysis Forum (19 topics) Help
  Interaction Between an Organization and Its Energy Environment?
I read a text about organizational-environmental interaction and it has named factors affecting the interaction such as: social, economical, political, legal, etc.
But at the end of these factors, it was written: other factors such as labor sup...
  What is a Business Environment
It is the aggregate of all conditions, events and influences that surround a firm and affect it.
The Business Environment (BENV) is COMPLEX and typically consists of factors, events, influences and conditions arising from different sources.
  History of PEST - Origins and Author
I am wondering about the origins of PEST. And also about the authorship of the various variants such as: PESTEL, PECLICT and SPECTALES....
  Technology Marketing and Economic Analysis in Utilities
A small developing economy creates a new government funded R&D company to streamline and consolidate efforts in R&D on energy, water, and technology development. How should the divisional head of Technology Marketing and Economic analysis go about se...
  How to Conduct a PEST Analysis? Main Steps and Tips
Is there a specific way in performing a PEST analysis, or is there no particular order?
I really want a guideline as to how I should perform a PEST analysis. Any other practical tips are also welcome......
  BOOK: The SPELIT Power Matrix
'The SPELIT Power Matrix: Untangling The Organizational Environment With The SPELIT Leadership Tool' by Leo A. Malette is a book available on  
  Environmental Factors in PESTLE
In PESTLE, what are examples of typical environmental factors? Thank you....
  Advanced form of PEST: PESTELEM Analysis
An advanced form of PEST analysis is called PESTELEM
Now what is the difference? This kind of PEST is more accurate and offers more di...
  Unfavorable External Environment?
When do I realize that the environment I am operating in is not favorable to my organization? And what should be the immediate response?...
  External Environment of a Service Company
I need to examine the external environment of a recruitment company (for my dissertation), and I'm looking for a model that I can use. Of course I will use the PEST method, but that will only cover the macro environment. Does anyone know a model or m...
  PEST Analysis for a Country
Does anyone know where I can get a PEST analysis on a country, such as the Czech Republic?...
  PEST Analysis Standard Format?
I have to do a PEST analysis. Is there a standard format (like SWOT)....
  PEST Analysis on Retail
Does anyone have a pest analysis on a retail industry. Thanks....
  Extension of PESTEL + C (=Competitors) Analysis
In discussions with a tutor at Deltic Training College (Mark Northway), it has been suggested that a 'C' should / ought to be added - standing for Competitors / Competition. This would save organisations from the need to do a benchmarking exer...
  PEST Analysis is Complementary to SWOT Analysis
PEST is one of the essential tool to supplement the SWOT analysis. PEST is the external environmental analysis in which opportunities and threats derive. Conducting PEST will be useful for SWOT analysis....
  Other Marketing Environment Tools
Apart from this PEST framework used to analyze the macro environment, which other technigues can be used?...
  Organisational Analysis
I would be grateful if I could be permitted to refer to the contents on this text. I will acknowledge the source....
  System Risk in PEST Analysis
As per recent global recession, how do you include in PEST analysis the risk factor due to mass negligence of control mechanism in financial sector in developed countries both by Government and public?...
  PEST / PESTLE Criticisms
What are some of the criticisms of the PESTEL Analysis?...

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Expert Tips - PEST Analysis Premium
  How to Analyze the Strategic Significance of some External Trend? - Analysis of Macro-environment, Strategic Environment
  Advanced Ways of Applying PEST Analysis - Analysis of Macro-environment, Strategic Environment
  Extensive 12-Factor PEST Analysis - International Strategic Environmental Analysis
  WHEN to use PEST analysis? Situations and Application Areas - PEST Analysis, Application Areas, Analysis of Macro-environment
  How to Refine my Initial PEST Analysis? - Advanced PEST Analysis
  Why Society is More Risky than Before - Understanding New Risk Categories, Risk Management
  Government Policies / Economic Policy Tools in PEST Analysis - PEST Analysis, Government Analysis, Analysis of Macro-environment, Strategic Environment

Resources - PEST Analysis Premium
PEST Analysis Template - PEST Analysis
PEST Analysis for Small and Medium-sized Companies - Initial Understanding of PEST Analysis, Summary
Introduction of the P of PEST Analysis: Political - Initial Understanding of PEST Analysis

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Compare with: SWOT Analysis  |  OODA Loop  |  Simulation  |  Five Competitive Forces  |  Stakeholder Analysis  |  Stakeholder Mapping  |  Benchmarking  |  Scenario Planning  |  Diamond Model  |  Strategic Risk Management

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