PEST AnalysisPEST Analysis

PEST Analysis Template

Analyze how internal and external factors may impact your company’s performance.

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 the 4 main internal and external factors that may impact a company’s performance: Political factors, Economic factors, Social factors, and Technological factors.

The 4 factors of a PEST analysis

Let’s take a deeper look at each factor below:

1. 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?

2. Economic

For businesses, economic factors can prove beneficial or detrimental to success. For example, industry growth, seasonal changes, labor costs, economic trends, growth rates, exchange 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?

3. 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?

4. 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

To get started, you need to 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.Ask each team member to come up with a few ideas for each of the 4 factors. 

Step 2: Rank

With these ideas in place, it’s time to 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

Now it’s time to share your completed PEST analysis with stakeholders. One of the main purposes of a PEST analysis is to keep shareholders informed of various external factors that can impact the business, so presenting your ideas in an intuitive and easy-to-understand way is a critical part of the process. 

Step 4: Repeat

Finally, your organization needs to maintain awareness of these various factors and plan to accommodate for them in the future. That means repeating the PEST analysis over time to keep a tab on these factors and 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 that will accomodate and account for these potential environmental factors. The PEST analysis can function as a roadmap for your business, detailing potential pitfalls, roadblocks, and opportunities for growth.

PEST Analysis Template

Get started with this template right now. It’s free

Related Templates
heart-template-thumb-webheart-template-thumb-web
PreviewMore info

HEART

Happiness, Engagement, Adoption, Retention, and Task Success. Those are the pillars of user experience — which is why they serve as the key metrics in the HEART framework. Developed by the research team at Google, this framework gives larger companies an accurate way to measure user experience at scale, which you can then reference throughout the product development lifecycle. While the HEART framework uses five metrics, you might not need all five for every project — choose the ones that will be most useful for your company and project.

HEART
Go to Market Strategy ThumbnailGo to Market Strategy Thumbnail
PreviewMore info

Go to Market Strategy

It doesn’t matter how innovative or effective a new product is — if it doesn’t get noticed and adopted by the right audience, the product won’t get off the ground. That’s where your Go-to-Market Strategy comes in. It’s a single resource that houses all of your research, insights, and data, and includes your business plan, target audience, marketing approach, and sales strategy. A GTM is especially important for any startups who grow fast, have to make split-second decisions, and have to be fully in sync.

Go to Market Strategy
Lean UX Canvas ThumbnailLean UX Canvas Thumbnail
PreviewMore info

Lean UX Canvas

What are you building, why are building it, and who are you building it for? Those are the big pictures questions that guide great companies and teams toward success — and Lean UX helps you find the answers. Especially helpful during project research, design, and planning, this tool lets you quickly make product improvements and solve business problems, leading to a more customer-centric product. This template will let you create a Lean UX canvas structured around eight key elements: Business problem, Business outcome, Users and customers, User benefits, Solution ideas, Hypothesis, Assumptions, Experimentation.

Lean UX Canvas
change-control-process-thumb-webchange-control-process-thumb-web
PreviewMore info

Change Control Process

You can predict, research, and plan for every detail of a project to go a certain way—then along comes the unforeseen and modifications are needed. That’s when a change control process comes into play. It helps define the right steps to take, gives stakeholders full visibility, and reduces the chances of errors and disruption. And this template is easy to use and highly effective—for ensuring that proposed changes are reviewed before they’re implemented, and empowering teams to veto changes that might prove unnecessary or disruptive.

Change Control Process
dmaic-analysis-thumb-webdmaic-analysis-thumb-web
PreviewMore info

DMAIC Analysis

Processes might not seem like the funnest thing to dive into and examine, but wow can it pay off—a more efficient process can lead to serious cost savings and a better product. That’s what DMAIC analysis does. Developed as part of the Six Sigma initiative, DMAIC is a data-driven quality strategy for streamlining processes and resolving issues. The technique is broken into five fundamental steps that are followed in order: Define, Measure, Analyze, Improve, and Control.

DMAIC Analysis
product-market-fit-canvas-thumb-webproduct-market-fit-canvas-thumb-web
PreviewMore info

Product/Market Fit Canvas

The product/market fit canvas template is used to help product teams meet customer and market needs with their product design. This template looks at a product in two dimensions: first, how the product fits user needs, and second, how the fully designed product fits within the market landscape. This combined metric understands a product holistically from the way customers use and desire a product, to the market demand. By comparing customer and product qualities side by side, users should better understand their product space and key metrics.

Product/Market Fit Canvas