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
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  Interaction Between an Organization and Its Energy Environment?
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But at the end of these factors, it was written: other factors such as labor sup...
  What is a Business Environment
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  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
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  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?
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  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...
  Direct and Indirect Environment of the Firm
What is needed to survive in dynamic environment.
The world is fast changing and as such if organisations are to survive there is need to adapt to the external environment. Organisational leaders have to closely monitor developments in the busines...
  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....

PEST Analysis Special Interest Group

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PEST Analysis Education & Events

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Best Practices - PEST Analysis Premium

Expert Tips - PEST Analysis Premium

How to Analyze the Strategic Significance of some External Trend?

To think over which of the trends in the PEST analysis are going to be really important for a firm, one can use the  

Advanced Ways of Applying PEST Analysis

When you are examining the external environment of a firm through a PEST Analysis, besides the obvious understanding of the
Usage (application): Analysis of Macro-environment, Strategic Environment

Extensive 12-Factor PEST Analysis

Marketing Consultant Geri Clark recommends a very comprehensive variant for International Marketing Environmental Analysis: the HELPS FREDICT framewor...
Usage (application): International Strategic Environmental Analysis

WHEN to use PEST analysis? Situations and Application Areas

A PEST-analysis contributes to the success of a company, because any specific organization can only be successful it it has a good understandin...
Usage (application): PEST Analysis, Application Areas, Analysis of Macro-environment

How to Refine my Initial PEST Analysis?

A PEST analysis can further be refined by incorporating the SWOT framework for each of the dimension mentioned here, i.e.: P, E, S and T."...
Usage (application): Advanced PEST Analysis

Why Society is More Risky than Before

In his 1992 book "  

Government Policies / Economic Policy Tools in PEST Analysis

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 ensu...
Usage (application): PEST Analysis, Government Analysis, Analysis of Macro-environment, Strategic Environment

Resources - PEST Analysis Premium

PEST Analysis Template

MS-Excel template for conducting a PEST Analysis for your business or (part of) your organization....
Usage (application): PEST Analysis

External Environment In-depth: Sub-types and How to Manage Them

This presentation covers the topic of external environments and includes the following sections:
1. Environmental Scanning and Environmental Mana...
Usage (application): External Environment, Environmental Scanning, Environmental Management, Competitive Environment

PEST Analysis for Small and Medium-sized Companies

Ian Johnson summarizes the PEST Framework in the context of Small and Medium-sized Companies.
PEST is an acronym to analyze the strategic environ...
Usage (application): Initial Understanding of PEST Analysis, Summary

Introduction of the P of PEST Analysis: Political

Short introduction to the P of PEST Analysis:
- Political
- Regulatory
- Legislative
The video gives examples in the health care i...
Usage (application): 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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