Pest Analysis Template
PEST Analysis Template
PEST (also known as STEP or PESTLIED) Analysis is a tool commonly used by businesses when evaluating their organizational environments and strategizing for the future. It’s a simple way of understanding the external macro and micro-environmental factors that can have an influence on the success of a project.
What is PEST Analysis?
PEST stands for Political, Economic, Social and Technological. It is a framework that allows businesses to evaluate their external environment for key factors that may have an impact on their strategies and operations. The PEST analysis is often used in conjunction with other analysis tools, such as a SWOT analysis, to gain a complete picture of the organization’s external environment.
Using a PEST Analysis Template
Using a PEST analysis template can help businesses develop strategies that are based on factual evidence and understanding. Below is an example of a PEST analysis template.
- Political: Consider factors like government policies, tax laws, employment laws, trade restrictions, etc.
- Economic: Factors such as inflation, interest rates, economic growth, international trade, etc.
- Social: Analyze the population’s demographics, culture, lifestyle changes, attitudes, opinions, etc.
- Technological: Consider the impact of technological advancements, trends, automation, etc.
Once the PEST analysis has been completed, businesses can use the information to create strategies designed with their external environment in mind. This helps create more well-rounded decisions, as the business is aware of the impacts of the external environment on their decisions and strategy.
In today’s complexities of the business environment, PEST Analysis has become a more deeply entrenched practice for managers, executives, and entrepreneurs to discern how external factors are impacting their operations. PEST Analysis is a planning tool used to analyze political, economic, social, and technological forces to understand their impact on the development of an organization or project. By acknowledging the external environment, PEST Analysis helps drive better decision making and recognize potential areas for growth and innovation.
When conducting a PEST Analysis, it is important to consider a variety of influences in order to capture the greatest number of opportunities and risks. To that end, the PEST Analysis template provides a framework to explore the forces at play, identify key facts and their relative impact, and document understanding around the external environment.
The 4 main areas included in a PEST Analysis are as follows:
1. Political/Legal: Political analysis includes investigation into governmental laws, regulations, and policies that can affect an organization’s operations. It is imperative to understand the potential implications of any changes proposed to the current political atmosphere, including changes to tax laws, foreign trade, banking regulations and more.
2. Economic: Economic forces review the macro and microeconomic conditions of an organization’s operating environment. This includes reviewing the rate of inflation, the cost of production, foreign exchange rates, and the state of competition.
3. Social/Cultural: Social and cultural forces review the customer and society’s expectations of an organization’s offerings and how this can shape demand. This includes behaviors, values, preferences, and trends which can shed light on the potential customer base and target markets.
4. Technological: Technological forces present many opportunities but can also present great threats. Innovations in technology can open up new markets, help drive lower costs, and allow for more efficient processes.
The PEST Analysis template provides a great way to review the operating environment of the organization in a methodical and objective manner. By evaluating observations captured by the template, a better pathway to success can be charted for the company or project.
Also Read: Pest Technological Factors!