PEST ANALYSIS

What is PEST ANALYSIS?
It is a framework that strategy consultants use to scan the external micro-environment in which the firm operates. PEST is an acronym for the following factors:
1. Political
2. Economic
3. Social
4. Technological

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

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

Political(incl. Legal)

Economic

Social

Technological

Environmental regulations and protection

Economic Growth

Income distribution

Govt. Research spending

Tax policies

Interest rates & monetary policies

Demographics, population growth rates,Age distribution

Industry focus on technological effort

Internal trade regulations and restrictions

Govt. Spending

Labor/ social mobility

New inventions and development

Contract enforcement law

Consumer protection

Unemployment policy

Life style changes

Rate of technology transfer

Employment laws

Taxation

Work/career & leisure attitudes, Entreprenuerial skills

Life cycle and speed of technological obsolescene

Govt. Organization/attitude

Exchange Rates

Education

Energy use and costs

Competition regulation

Inflation rates

Fashion, hypes

(Changes in) Information technology

Political Stability

Stage of business cycle

Health consciousness & welfare, feelings on safety

(Changes in) Internet

Safety regulations

Consumer Confidence

Living conditions

(Changes in) mobile technology

VARIANTS OF PEST ANALYSIS

Sometimes extended forms are used SLEPT ANALYSIS or the STEEPLE ANALYSIS: Social/demographic, Technological, Economic, Environmental, Political, Legal and Ethnical factors. Also Geographical factors may be significant.

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~Vikas Chamarthi~







1 comments:

Vikas Chamarthi 21 November 2011 at 09:04  

CORRECTION:
In the first line it is Macro-environment not micro...
It is a framework that strategy consultants use to scan the external macro-environment. error regretted.

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