PEST Analysis
by Dany VM
1. A strategy can come up successfully and effective if you conduct a PEST analysis.
2. A PEST analysis is a strategic planning tool. It is used to identify the political, economic, social and technological factors that may have an effect on a project and its planning process.
2.1. Political factors tax policies, employment laws, tariff and trade restrictions, consumer protection laws, environmental regulations, political stability of a country, etc.
2.2. Economical factors include economic growth indicators, inflation rate, interest rates, exchange rates, fiscal policies, unemployment trends, etc.
2.3. Social factors include cultural aspects, age distribution, career attitudes, health consciousness, population growth rate, social classes, etc.
2.4. Technological factors include rate of technological change, technology incentives, spending on research & development, basic infrastructure level etc.
3. The PEST will help you to understand the external environment factors that may positively or negatively affect your company’s strategic planning process.
4. Benefits of doing a PEST analysis
4.1. Visualize all the factors in one place for better decision-making: it joins all the important information you need to know to come up with better strategies
4.2. Identify opportunities and threats: when you already gather information, you need to evaluate them. By assessing them you and your team will be able to identify the opportunities and threats that happen in the external environment
4.2.1. The SWOT analysis is used to make strategic planning decisions. So once you gather al the info. in the PEST, you evaluate your strenghts, weaknesses, opportunities and threats.