PEST: Political, Economic, Socio-Cultural and Technology
The PEST analysis is usually associated with the SWOT analysis as a way of delving deeper into the causes of potential opportunities or threats. There may be factors that are out-with your control and it is best to identify these factors early so that you can prepare.
How to use PEST?
Take each element in turn and look at the current and future landscapes, how can they open up new opportunities and what threats might they present? By identifying what may be coming you can adequately prepare your business and make adjustments to your plan where necessary.
You can download our PEST Template HERE
Go through each element and brainstorm the factors, we have suggested some questions to ask for each one. Then brainstorm what opportunities they might present to your business and then lastly, identify the threats they may present.
When is the country’s next local, state, or national election? How could this change government or regional policy?
Who are the most likely contenders for power? What are their views on business policy, and on other policies that affect your organization?
Depending on the country, how well developed is the rule of law?
Could any pending legislation or taxation changes affect your business, either positively or negatively?
How will business regulation, or any planned changes to it, affect your business? And is there a trend towards regulation or deregulation?
How does government approach corporate policy, corporate social responsibility, environmental issues, and customer protection legislation? What impact does this have, and is it likely to change?
What is the likely timescale of proposed legislative changes?
Are there any other political factors that are likely to change?
How stable is the current economy? Is it growing, stagnating, or declining?
Are exchange rates stable, or do they tend to vary significantly? Could this impact your costs for raw materials or export?
Are customers’ levels of income rising or falling? How is this likely to change in the next few years?
What is the unemployment rate? Will it be easy to build a skilled workforce? Will you have to provide training?
Do consumers and businesses have easy access to credit? If not, how will this affect your organization?
How is globalization affecting the economic environment?
Are there any other economic factors that you should consider?
What is the population’s growth rate and age profile? Is this likely to change?
Are generational shifts in attitude likely to affect what you’re doing?
What are your society’s levels of health, education, and social mobility? How are these changing, and what impact does this have?
What employment patterns, job market trends, and attitudes toward work can you observe? Are these different for different age groups?
What social attitudes and social taboos could affect your business? Have there been recent socio-cultural changes that might affect this?
How do religious beliefs and lifestyle choices affect the population?
Are any other socio-cultural factors likely to drive change for your business?
Are there any new technologies that you could be using?
Are there any new technologies on the horizon that could affect your work or your industry?
Do any of your competitors have access to new technology?
In which areas do governments and educational institutions focus their research? Is there anything you can do to take advantage of this?
How have infrastructure changes affected work patterns (for example, could technology help you offer remote working)?
Are there existing technological hubs that you could work with or learn from?
Are there any other technological factors that you should consider?
Note – There are variations of PEST Analysis that bring other factors into consideration.
PESTLE/PESTEL – Political, Economic, Socio-Cultural, Technological, Legal, Environmental.
PESTLIED – Political, Economic, Socio-Cultural, Technological, Legal, International, Environmental, Demographic.
STEEPLE – Social/Demographic, Technological, Economic, Environmental, Political, Legal, Ethical.
SLEPT – Socio-Cultural, Legal, Economic, Political, Technological.
LONGPESTLE – Local, National, and Global versions of PESTLE. (These are best used for understanding change in multinational organizations.)
The PEST analysis will cover the main points but you may want to consider additional versions if they best suit your situation.