How-to: Conduct a PEST Analysis

In assessing your business, you should conduct a PEST analysis to assess the external factors (out of your control) that could impact your business in Political, Economic, Social & Technological factors. In other words, how could these external forces change the dynamics of your market, segment, competitors or business should they come to fruition?

The best method for eliciting PEST factors is using the brainstorming method where a team identifies as many potential factors that could impact your business. While many are relevant, often there are 3-5 critical factors that bubble to the top that should be prioritized in future steps in the Strategile platform

• Political:
  • Could any pending legislation or taxation changes affect your business, either positively or negatively?
  • How will business regulation, along with any planned changes to it, affect your business? And is there a trend towards regulation or deregulation?
  • How does the government approach corporate policy, corporate social responsibility, environmental issues, and customer protection legislation? What impact does this have, and is it likely to change?
  • What is the likely timescale of proposed legislative changes?
  • Are there any other political factors that are likely to change?

• Economic:
  • How stable is the current economy? Is it growing, stagnating, or declining?
  • Are key exchange rates stable, or do they tend to vary significantly?
  • Are customers’ levels of disposable income rising or falling? How is this likely to change in the next few years?
  • What is the unemployment rate? Will it be easy to build a skilled workforce? Or will it be expensive to hire skilled labor?
  • Do consumers and businesses have easy access to credit? If not, how will this affect your organization?

• Social:
  • Are generational shifts in attitude likely to affect what you’re doing?
  • What are your society’s levels of health, education, and social mobility? How are these changing, and what impact does this have?
  • What employment patterns, job market trends, and attitudes toward work can you observe? Are these different for different age groups?
  • What social attitudes and social taboos could affect your business? Have there been recent socio-cultural changes that might affect this?
  • How do religious beliefs and lifestyle choices affect the population?

• Technological:
  • Are there any new technologies that you could be using?
  • Are there any new technologies on the horizon that could radically affect your work or your industry?
  • Do any of your competitors have access to new technologies that could redefine their products?
  • In which areas do governments and educational institutions focus their research? Is there anything you can do to take advantage of this?
  • How have infrastructure changes affected work patterns (for example, levels of remote working)?
  • Are there existing technological hubs that you could work with or learn from?
  • Are there any other technical factors that you should consider?

The Strategile platform allows you to enter as many PEST factors as you wish. It also allows you to prioritize factors by “dragging” items up and down the column so the most important factors can be moved to the top.