PEST analysis is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up from: PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macroenvironmental factors used in environmental scanning. It is also referred to as the STEP, STEEP or PESTLE analysis (Political, Economic, Socio-cultural, Technological, Legal, Ethical).
It is a part of the external analysis when doing market research and gives a certain overview of the different macroenvironmental factors that the company has to take into consideration. Political factors include areas such as tax policy, employment laws, environmental regulations, trade restrictions and tariffs and political stability. The economic factors are the economic growth, interest rates, exchange rates and inflation rate. Social factors often look at the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. The technological factors also include ecological and environmental aspects and can determine the barriers to entry, minimum efficient production level and influence outsourcing decisions. It looks at elements such as R&D activity, automation, technology incentives and the rate of technological change.
The internal environment e.g. staff (or internal customers), office technology, wages and finance, etc.
The microenvironment e.g. our external customers, agents and distributors, suppliers, our competitors,
The macro-environment e.g. Political (and legal) forces, Economic forces, Socio cultural forces, and
Technological forces. These are known as PEST factors.
The political arena has a huge influence upon the regulation of businesses, and the spending power of... [continues]
Cite This Essay
(2009, 04). Corporate Strategy. StudyMode.com. Retrieved 04, 2009, from http://www.studymode.com/essays/Corporate-Strategy-201988.html
"Corporate Strategy" StudyMode.com. 04 2009. 04 2009 <http://www.studymode.com/essays/Corporate-Strategy-201988.html>.
"Corporate Strategy." StudyMode.com. 04, 2009. Accessed 04, 2009. http://www.studymode.com/essays/Corporate-Strategy-201988.html.