PEST Analysis template
Analyze how internal and external factors may impact your company’s performance.
PEST analysis is a well-known analytical tool that’s used to examine a company’s internal resources, industry factors, and macro-economic factors that can have a significant impact on the company in question. It’s often used in tandem with other analytical tools such as the SWOT analysis or Porter’s Five Forces.
About the PEST Analysis template
What is a PEST analysis?
A PEST analysis a strategic business tool that allows businesses to understand how various elements might impact their businesses now and in the future. Organizations use PEST analyses to discover, evaluate, organize, and track the macroeconomic factors underlying business outcomes. These factors might be Political, Economics, Social, or Technological. PEST analyses are useful because they help inform strategic planning, budget allocation, and market research.
What does PEST stand for?
PEST stands for Political, Economic, Social, and Technological factors. This represents both internal and external factors that may impact a company’s performance.
What are the 4 factors of a PEST analysis?
Political: Many organizations are impacted by political or politically-motivated factors. For example, government policy, political instability, corruption, foreign trade policy and trade restrictions, labor laws, environmental laws, or copyright laws might all affect a company’s strategic planning. When evaluating the political aspect of a PEST analysis, you should ask: What governments, government policies, political elements, or groups could benefit or disrupt our success?
Economic: For businesses, economic factors can prove beneficial or detrimental to success. For example, industry growth, seasonal changes, labor costs, economic trends, growth rates, unemployment rates, consumers’ disposable income, taxation, and inflation each carry a sizable potential impact on the business. When evaluating the economic aspect of a PEST analysis, you should ask: What economic factors might impact our company’s pricing, revenue, and costs?
Social: Social attitudes, trends, and behaviors might influence your business, customers, and market. For instance, attitudes and beliefs about money, customer service, work, and leisure, and trends in lifestyles, population growth, demographics, family size, and immigration can heavily impact a business. When evaluating the social aspect of a PEST analysis, you should ask: How do our customers’ and potential customers’ demographic trends and values influence their buying habits?
Technological: Technology can affect your organization’s ability to build, market, and ship products and services. For example, legislation around technology, consumer access to technology, research and development, and technology and communications infrastructure impact most businesses and organization. When evaluating the technological aspect of a PEST analysis, you should ask: How might existing or future technology impact our growth and success?
How do you run a PEST analysis?
Step 1: Brainstorm the various PEST factors — political, economic, social, and technological — that might impact your business. You can hold a large brainstorming session or invite your teammates to brainstorm themselves and come prepared with ideas.
Step 2: Rank these factors based on their expected level of impact on the organization. If there are significant discrepancies in ratings, discuss those! Allow people the time and space to change their mind. Adjust the ranking as your teammates provide more input.
Step 3: Share your completed PEST analysis with stakeholders.
Step 4: Repeat the PEST analysis to keep your strategies and processes up to date.
Why do a PEST analysis?
A PEST analysis helps you evaluate how your strategy fits into the broader environment and encourages strategic thinking. By conducting a PEST analysis, you’ll be better prepared to plan initiatives for marketing, product, organizational change, and more.
PEST Analysis Template
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