PEST Analysis


Your ad here

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

Log in

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)


Economic


Social


Technological


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

Taxation

Work/career and leisure attitudes

Entrepreneurial spirit

Life cycle and speed of technological obsolescence

Government organization / attitude

Exchange rates

Education

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 New Topic  |  Help
Applications of PEST analysis. Usages and Usefulness
"A PEST-analysis contributes to the success of a company, because any specific organization can only be successful it it has a good understanding and knowledge of the business environment it is ..."
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
Political
Economic
Social
Technological
Ecological
Legal
Ethical
Media
Now what is the difference? Thi..."
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 th..."
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 org..."
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 analys..."
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."
Economic Policy Tools
"Governments use several economic policy tools to achieve a set of goals. Managers of industry must have their focus on on these policies so as to ensure that their businesses survive. These economic p..."
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..."
How to use PEST - Application variants
"When you are examining the external environment of a firm through a PEST ANALYSIS, besides the obvious understanding of the CURRENT STATUS of the factors or trends (which ones are they, their current ..."
PEST / PESTLE Criticisms
"What are some of the criticisms of the PESTEL Analysis?"
POET, variant of PEST
"Because I consult to defense agencies, I've had a hard time getting them to grapple the Societal / Social category in workshops. Even with "seed" examples. So, I am going to try a variant - I'm goin..."

Keep in touch with this topic
Please log in...






PEST Analysis Special Interest Group


Visit the Special Interest Group

 


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


Return to Management Hub: Finance & Investing  |  Knowledge & Intangibles  |   Marketing  |  Strategy


More Management Methods, Models and Theory

Keep in touch with this topic
Please log in...



Options

12manage for:

12manage in:

Copyright 2012 12manage - The Executive Fast Track. V11.0 - Last updated: 17-5-2012. All names tm by their owners.