Understanding "Big Picture" Forces of Change
(Also known as PESTLE, PESTEL, PESTLIED, STEEPLE and SLEPT Analysis)
PEST Analysis is a simple, useful and widely-used tool that helps you understand the "big picture" of your Political, Economic, Socio-Cultural and Technological environment. As such, it is used by business leaders worldwide to build their vision of the future. It is important for these reasons:
•First, by making effective use of PEST Analysis, you ensure that what you are doing is aligned positively with the powerful forces of change that are affecting our world. By taking advantage of change, you are much more likely to be successful than if your activities oppose it. •Second, good use of PEST Analysis helps you avoid taking action that is doomed to failure from the outset, for reasons beyond your control. •Third, PEST is useful when you start operating in a new country or region. Use of PEST helps you break free of unconscious assumptions, and helps you quickly adapt to the realities of the new environment. How to Use the Tool:
PEST is a simple mnemonic standing for Political, Economic, Socio-Cultural and Technological. To use this tool, follow this three stage process:
1.Brainstorm the relevant factors that apply to you.
2.Identify the information that applies to these factors.
3.Draw conclusions from this information.
Download our free worksheet to record your analysis.
The important point is to move from the second step to the third step: it is sterile just to describe factors without thinking through what they mean. However, be careful not to assume that your analysis is perfect: use it as a starting point, and test your conclusions against the reality you experience. The following factors may help as a starting point for brainstorming (but make sure you include other factors that may be appropriate to your situation): Political:
•Government type and stability.
•Freedom of press, rule of law and...