Wednesday 19 December 2018

How to do a pest analysis

A PEST analysis is relates to environmental influences on a business. PEST is a way or a helpful tool for summarizing the external environment in the business operation. PEST must be follow up with consideration of how businesses have to deal with the effects of political, economic, environmental, social, and technology.

Identifying PEST influences is a helpful method of summarizing the external environment in which a business operates. Nevertheless, it has to be follow up by consideration of how a business should act in response to these influences.


The Political factors are analyze and diagnose by most companies, among others:

  • Minimum wage

  • Price Control

  • Opportunity to work same for everyone

  • Safety and health in work

  • Where factory be establish

  • What factory was issue to air

  • How ruckus which can be done in

  • Does the production company can do advertising and which ads can be done

  • Regulation and environmental protection

  • Taxation (companies; consumer)

  • Trade regulation International

  • Consumer protection

  • Employment law

  • Company/government attitude

  • Action regulations


Circumstances at the time the economy now and in the future can influence the progress and strategy of the company. Economic factors specific to be analyze and diagnose by most companies include:

  • Economic growth

  • Monetary policy

  • Government spending

  • Policy towards unemployment

  • Phases of business cycles. The economy may be classify as in a State of depression, recession, the resurrection (recovery) or prosperity.

  • Symptoms of inflation and deflation in the prices of goods and services. If inflation is very sharp, probably held controlling wages and prices.

  • Financial Wisdom, the interest rate and the devaluation or revaluation of money in relation to foreign money.

  • Fiscal Wisdom: tax rate or the companies and individuals.

  • Balance of payments surplus, or deficit in conjunction against foreign trade.

Every facet of the economy can help or hinder the efforts of achieving the objectives of the company and led to the success or failure of the strategy. For example, a recession often causes of unemployment, when we produce the goods as our heart, which can lead to lower sales. The wisdom of the tax could reduce the attractiveness of investment in an industry or reduce income after tax from consumers, which ultimately reduce the level of its expenditure.


The social factors center on the assessment of the attitude of consumers and employees who influence the strategy. The planners of the strategy must follow the changes in the levels of education and social assessment for the purpose of assessing its impact on their strategy. But a reaction typical of companies against different social factors, from changes in behavior through to converting social judgments and attitudes through the efforts of civic relations.

Social factors are analyze and diagnose by most companies, among others:

  • Income distribution.

  • Demographics.

  • Labor/social mobility.

  • Lifestyle changes.

  • The attitude of work.

  • Education.

  • Health and wellness.

  • Living conditions (housing, pollution, etc.).


Planners an effective strategy examine the environment to seek a technological change that may affect the raw materials, operations, and products and services of the company, because of changes in technology can provide great opportunities to improve results, purpose or threaten the position of the company.

Government Encouragement through tax wisdom and laws also play a role in the change of technology. The will to innovate and take risks appear to be an important component. Further technological change requires social economic climate that can take it.

Political factors are analyze and diagnose by most companies, among others:

  • Government and industry Focus on the advancement of technology.

  • New discovery and development.

  • Speed of  technology transfer Rates of technology obsolescence.

  • Cost and use of technology.

  • Change in science.

  • The impact of technological change.

Analyzing the date you gather is a crucial step. However, without the proper organization and a clear objective. You won’t gain much from the process. If you start collecting information without a clear objective. You may have a difficult time making sense of it. That is why with competitive intelligence, you need to master all the steps in order to be able to use the information to your advantage.

There are three basic steps that are part of this process. After you collect the data you will need to organize it. Then comes the analysis and reporting phase.

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