A guide for writing PEST Analysis

1. 1
POLITICAL/LEGAL FORCES
• Government
regulations/deregulations
• Changes in tax laws
• Special tariffs
• Political action
committees
• Voter participation
• Number and severity of
protest against
government
• Patents and changes
• Environmental protection
laws
• Level of defense spending
• Antitrust legislation
• Geopolitics
• Import/export
regulations
• Fiscal & monetary
policies
• Lobbying activities
• Size of Gov’t budgets
• World oil, currency, &
labor markets
• Terrorism
• Local and national
elections

2. 2
ECONOMIC FORCES
• Industry Shifts
• Availability of Credit
• Level of Disposable Income
• Consumption patterns
• Interest/inflation
• Money market rates
• Budget deficits
• Gross domestic product trend
• Unemployment trends
• Worker productivity levels
• Exchange rates
• Stock Market trends
• Foreign economic conditions
• Import/export factors
• Demand shifts for different
categories of products and
services
• Income differences by
region/consumer groups
• Price fluctuations
• Export of labor and capital
• Monetary policies
• Fiscal policies
• Tax rates
• EEC policies
• OPEC policies
• Unemployment trends
• Propensity of people to spend

3. 3
SOCIO-CULTURAL FORCES
• Child bearing rates
• Number of special interest
groups
• Number of
marriages/divorces
• Immigration/emigration
rates
• Life expectancy rates
• Per capita income
• Location of businesses
• Attitudes and lifestyles
• Traffic congestion
• Buying habits
• Ethical concerns
• Savings/investing
• Sex roles
• Birth control
• Level of education
• Government regulation
• Trust in government
• Pollution control
• Energy programs
• Social programs
• Number of churches
• Population changes by location
and by age, sex, etc.
• Number of high school and
college graduates
• Waste management

4. 4
TECHNOLOGICAL FORCES
• A firm must be aware of technological changes that
might influence its industry
• TECHNOLOGICAL FORECASTING - key lies in accurately
predicting future technological capabilities and their
probable impacts
• Internet changes the nature of opportunities and threats
• Alters life cycle of products
• Increases speed of distribution
• Creates new products and services
• Eases limitations of geographic markets
• Alters economies of scale
• Changes entry barriers

5. TECHNOLOGICAL FORCES cont’d
• Total industry spending for R & D
• Productivity improvements through automation
• New products
• State of physical infrastructure
• New developments in technology transfer from
lab to marketplace
• Focus of technological efforts
• State of telecoms, including the Web and the
Net