Introduction
PEST analysis is concerned with the
environmental influences on a business.
The acronym stands for the
Political, Economic, Social and Technological issues that could affect the
strategic development of a business.
Identifying PEST influences is a
useful way of summarising the external environment in which a business
operates. However, it must be followed up by consideration of how a business
should respond to these influences.
The table below lists some possible
factors that could indicate important environmental influences for a business
under the PEST headings:
Political
/ Legal
|
Economic
|
Social
|
Technological
|
- Environmental regulation and
protection
|
- Economic growth (overall; by
industry sector)
|
- Income distribution (change in
distribution of disposable income;
|
- Government spending on research
|
- Taxation (corporate; consumer)
|
- Monetary policy (interest rates)
|
- Demographics (age structure of
the population; gender; family size and composition; changing nature of
occupations)
|
- Government and industry focus on
technological effort
|
- International trade regulation
|
- Government spending (overall
level; specific spending priorities)
|
- Labour / social mobility
|
- New discoveries and development
|
- Consumer protection
|
- Policy towards unemployment
(minimum wage, unemployment benefits, grants)
|
- Lifestyle changes (e.g. Home
working, single households)
|
- Speed of technology transfer
|
- Employment law
|
- Taxation (impact on consumer
disposable income, incentives to invest in capital equipment, corporation tax
rates)
|
- Attitudes to work and leisure
|
- Rates of technological
obsolescence
|
- Government organisation /
attitude
|
- Exchange rates (effects on
demand by overseas customers; effect on cost of imported components)
|
- Education
|
- Energy use and costs
|
- Competition regulation
|
- Inflation (effect on costs and
selling prices)
|
- Fashions and fads
|
- Changes in material sciences
|
- Stage of the business cycle
(effect on short-term business performance)
|
- Health & welfare
|
- Impact of changes in Information
technology
|
|
- Economic "mood" -
consumer confidence
|
- Living conditions (housing,
amenities, pollution)
|
- Internet!
|
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