PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macroenvironmental factors used in the environmental scanning component of strategic management. It is a part of the external analysis when conducting a strategic analysis or doing market research and gives a certain overview of the different macroenvironmental factors that the company has to take into consideration. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations.
The growing importance of environmental or ecological factors in the first decade of the 21st century have given rise to green business and encouraged widespread use of an updated version of the PEST framework. STEER analysis systematically considers Socio-cultural, Technological, Economic, Ecological, and Regulatory factors. Contents
* 1 History
* 2 Overview
* 3 References
* 4 External links
According to the site RapidBI The term PEST was originally called the 'ETPS' and was quoted in Aguilar, Francis (1967). Scanning the Business Environment. New York: Macmillan.. , who discusses ‘ETPS’ - a mnemonic for the four sectors of what he calls his taxonomy of the business environment: Economic, Technical, Political, and Social. Sometime after this initial publication, Arnold Brown for the Institute of Life Insurance reorganized it as ‘STEP’ as a way to organise the results of his environmental scanning. Over time by academics and others in business it was modified yet again to become a so-called STEPE analysis (the Social, Technical, Economic, Political, and Ecological taxonomies).
In the 1980s, several other authors including Fahey, Narayanan, Morrison, Renfro, Boucher, Mecca and Porter included variations of the taxonomy classifications in a variety of orders: PEST, PESTLE, STEEPLE etc. Due to the negative connotations of PEST, a STEP analysis...