PEST Analysis

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PEST Analysis by Mind Map: PEST Analysis

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.

4.3. Ability to gather information from experts and compare them with other factors. It is not only about listing down PEST factors. You need to seek information from experts who are aware of the current conditions.

5. The PEST analysis is crucial for any planning process. If you do not have an idea of the external factors that would affect your company, you will never reach your targets.

6. Behind every successful accomplishment of a company, there is a dedicated team and effective strategic planning so they should come up with an effective strategy to accomplish it.