PEST Analysis
The PEST analysis stands for "Political", "Economical", "Social-Cultural" and "Technological". The PEST analysis is a macro environmental framework used to understand the external impacts on an organization. Companies use it because it's simple, it promotes a logical and thorough analysis and it is good for brainstorming and generating discussion.
Politcal factors affects the organization in terms of government and law related issues, good examples of this would be tax policies and trade restrictions
Economical factors is how the economic environment affects the organizations ability to make decisions and operate, things such as deflation or interest rates are good examples
Socio-Cultural is about the lifestyle trends of the consumer/market and focuses more on the population, E.g. eating pork may be a trend and that may affect fast food companies such as McDonalds, Burger King and cause them to focus their product on this aspect
Technological factors can be viewed as technological advances or components that affects the cost and quality of the products produced by the organization. E.g. Replacement technology that can reduce human labor
The PEST can also be expanded into PESTLE, STEEPLE
PESTLE: Political, Economical, Socio-Cultural, Technological, Legal, Environmental
STEEPLE: Socio-Cultural, Technological, Economical, Ethical, Political, Legal, Environmental
Politcal factors affects the organization in terms of government and law related issues, good examples of this would be tax policies and trade restrictions
Economical factors is how the economic environment affects the organizations ability to make decisions and operate, things such as deflation or interest rates are good examples
Socio-Cultural is about the lifestyle trends of the consumer/market and focuses more on the population, E.g. eating pork may be a trend and that may affect fast food companies such as McDonalds, Burger King and cause them to focus their product on this aspect
Technological factors can be viewed as technological advances or components that affects the cost and quality of the products produced by the organization. E.g. Replacement technology that can reduce human labor
The PEST can also be expanded into PESTLE, STEEPLE
PESTLE: Political, Economical, Socio-Cultural, Technological, Legal, Environmental
STEEPLE: Socio-Cultural, Technological, Economical, Ethical, Political, Legal, Environmental