PEST ANALYSIS

WHAT IS PEST ANALYSIS? DESCRIPTION
The PEST analysis is a framework use to scan the external macro-environment in which a firm operates. PEST is an acronym for the following:

• Political
• Economic
• Social
• Technological.

PEST play a very 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 opportunity. PEST analysis should be performed per country as macro-economical factors can differ per continent, country or region. These are the example of each factors:

Political(incl. Legal)

• Environmental regulations and protection.
• Tax Policies.
• International trade regulations and restrictions.
• Contract enforcement law, consumer protection.
• Employment laws.
• Government organization/attitude.
• Competition regulations.
• Political stability.
• Safety Regulations.

Economic

• Economic growth
• interest rates &monetary policy.
• Government spending.
• unemployment policy.
• Taxation.
• Exchange rates.
• Inflation rates.
• stage of the business cycle.
• consumer confidence.

Social

• Income distribution.
• Demographics, Population growth rates, Age distribution.
• Labor/social mobility.
• Lifestyle changes.
• Work/career and leisure attitides.Enterpreneurial spirit.
• Education.
• fashion.
• Living conditions.

Technological

• Government research spending.
• Industry focus on technological effort.
• New inventions and development.
• Rate of technology transfer.
• life cycle and speed of technological obsolescene
• energy use and cost.
• changes in information technology.
• changes in internet.

To complete a PEST analysis is relatively simple and can be done using brainstorming techniques via workshops. Usage of PEST analysis can be vary from company and strategic planning, business and product development, marketing planning and research reports.

VARIANTS OF PEST ANALYSIS
Sometimes extended forms are used, likeSTEEPLE Analysis: social,demographic,Technological,Economic, Environmental, Legal and Ethical factors or SLEPT Analysis (plus Legal)