PEST analysis

PEST analysis

A form of strategic analysis that focuses on the external factors that might affect business activities. These factors include: Political (and legal), Economic, Social, and Technological factors.

Political factors (examples)

- government policies and extent of government intervention

- gov. stability

- Environmental regulations

- Employment law

- Competition regulations

- Consumer protection laws

Ecnomic factors (examples

- Rate of economic growth

- Exchange rate stability

- Membership of common currency

- Tax rates and likely changes

- Interest rates

- Inflation rates

- Country's membership or free trade areas

Social factors (examples)

- Demographic changes

- Dominant religion and its impact

- Education standards (impact on labor skills)

- Roles of men and women

- Social and environmental issues that could have an effect on society

- Labour and social mobility and migration levels

- Languages spoken

Technological factors (examples)

- New tech. allowing products to be made more cheaply

- Government support for research spending

- Impact on internet access and speed on marketing and other strategies

- Cost of renewable energy compares to fossil fuels

- Speed of technological obsolescence

- Importance of product innovations

- Process innovations and impact on competitiveness