A PEST analysis is a research tool that helps businesses understand and anticipate external factors that could impact their operations. PEST is an acronym for political, economic, socio-cultural or social, and technological. The PEST analysis is often used in conjunction with SWOT analysis which stands for strengths, weaknesses, opportunities, and threats.
Please view the table below for a breakdown of the different portions of the PEST analysis.
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Political
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Economic |
Socio-cultural |
Technological |
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Here government regulations and legal factors are assessed in terms of their ability to affect business environment and trade markets.
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Through this factor, businesses examine the economic issues that are bound to have and impact on the company. |
With the social factor, a business can analyze the socio-economic environment of its market via elements like customer demographics, cultural limitations, lifestyle attitude, and education.
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How technology can either positively or negatively impact the introduction of a product or service into a marketplace is assessed here. |
- Environmental Regulations
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- Government research spending
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- Interest rates and monetary policies
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- Demographics, population growth
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- Industry focus on technology
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- International Trade Regulations
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- New inventions and development
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- Contract enforcement laws
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- Rate of technology transfer
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- Work/Career attitudes, entrepreneurial spirit
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- Life cycle of technologies
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- Government organization, attitude
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- Fashion, trends, Income distribution
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- Stage of the business cycle
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- Health consciousness, welfare
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- (Changes in) Internet Usage
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- (Changes in) Mobile Technology
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