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The PEST analysis is a structure that strategy advisors utilize to examine the external macro-environment in which a firm works. PEST is an acronym for the subsequent factors
PEST factors play a significant role in the value formation opportunities of a strategy. Though they are generally outside the power of the corporation and should normally be taken as either threats or opportunities. Remember macro-economical factors can be different per country, continent, or even region, so usually a PEST analysis must be performed per country.
Completing a PEST Analysis is comparatively easy, and can be done through workshops using brainstorming methods. Practice of PEST analysis can differ from: company and strategic planning, business and product development, marketing planning, and research reports.
Variants of PEST Analysis
At times extended forms are utilized, like SLEPT Analysis (plus Legal) or the STEEPLE Analysis: Social/demographic, Economic, Technological, Political, Environmental (natural), Legal and Ethical factors. Geographical factors may be important too.
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