By: Ray Myers, Jr., PMP
A PEST analysis scans the external environment in the following terms: Political, Economic, Social, and Technological. It is a useful tool for understanding market influences on a business.
Use PEST analysis for business and strategic planning, market planning, and product development. This analysis can be accomplished individually or in a group setting using brainstorming to answer the questions. Add to or change the questions below as needed to focus the analysis.
The PEST analysis is similar to the SWOT analysis, but it is best completed before doing a SWOT analysis.
Procedure
- Answer the following questions
- Add questions as necessary
Political
- Include laws, regulations, informal rules and legal issues
- Tax policy
- Employment law
- Environmental regulations
- Trade restrictions and tariffs
- Political stability
Economic
- Affects of purchasing power and cost of capital
- Economic growth
- Interest rates
- Exchange rates
- Inflation rate
Social
- Affects customer needs and size of potential markets
- Health consciousness
- Population growth rate
- Age distribution
- Career attitudes
Technological
- Barriers to entry
- Minimum efficient production levels
- Outsourcing
- R&D activity
- Automation
- Technology incentives
- Rate of technological change
About the Author: Ray Myers, Jr. is a PMP certified project manager with over 2o years experience planning and managing technology projects. Contact Ray at wwwpmservicesnw.com
Article source: www.pmservicesnw.com
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