Pest Analysis

Slide 1: PEST Analysis

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Slide 3: • PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macro environmental factors used in environmental scanning.

Slide 4: PEST Analysis • Can be used as a basis for the analysis of business and environmental • PEST analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.

Slide 5: Political Factors • Include government regulations and legal issues, define both formal and informal rules under which the firm must operate. Some examples include: – Tax policy – Employment laws – Environmental regulations – Trade restrictions and tariffs – Political stability

Slide 6: Economic Factors • Economic factors affect the purchasing power of potential customers and the firm's cost of capital. The following are examples of factors in the macro economy: – Economic growth – Interest rates – Exchange rates – Inflation rate

Slide 7: Social Factors • Include the demographic and cultural aspects of the external macro environment. These factors affect customer needs. Some social factors include: – Health consciousness – Population growth rate – Age distribution – Career attitudes – Emphasis on safety

Slide 8: Technological Factors • Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include: – Research & Development activity – Automation – Technology incentives – Rate of technological change