Mr. Gabor KOVACS

Topics: Strategic management, Management, SWOT analysis Pages: 14 (1875 words) Published: November 1, 2014
PEST & PESTEL Analysis | Strategic Management Insight

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PEST & PESTEL Analysis

PEST & PESTEL Analysis

PEST &
PESTEL
Analysis

By Ovidijus Jurevicius | 13.02.2013
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Definition
1. “PEST analysis – an analysis of the political,
economic, social and technological factors in the
external environment of an organization, which
can affect its activities and performance.” [1]
2. “PESTEL model involves the collection and
portrayal of information about external factors
which have, or may have, an impact on
business.” [2]

http://www.strategicmanagementinsight.com/tools/pest-pestel-analysis.html

Knowing the
external
factors
affecting
your
company

Apple
SWOT
Analysis
Identifying
Apple's
strengths,
weaknesses,
opportunities
and threats

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PEST & PESTEL Analysis | Strategic Management Insight

01.11.14 09:51

Value Chain
Analysis
Improving
business
value chain
to strengthen
its
competitive
advantage

McDonald's
SWOT
Analysis

Understanding the tool
PEST or PESTEL analysis is a simple and effective
tool used in situation analysis to identify the key
external (macro environment level) forces that might

Identifying
McDonald's
strengths,
weaknesses,
opportunities
and threats

affect an organization. These forces can create both
opportunities and threats for an organization.
Therefore, the aim of doing PEST is to:
find out the current external factors affecting an
organization;
identify the external factors that may change in the
future;

BCG Matrix
Assessing
and
managing
your
business
portfolio

to exploit the changes (opportunities) or defend
against them (threats) better than competitors
would do.
The outcome of PEST is an understanding of the
overall picture surrounding the company.

New topics

Figure 1. Macro environment forces affecting a firm
(PEST forces including legal, environmental, ethical
http://www.strategicmanagementinsight.com/tools/pest-pestel-analysis.html

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PEST & PESTEL Analysis | Strategic Management Insight

01.11.14 09:51

and demographic forces)
IFE & EFE
Matrices
Weighing
and rating
the key
internal/external
factors

GEMcKinsey
Matrix

PEST analysis is also done to assess the potential of
a new market. The general rule is that the more
negative forces are affecting that market the harder it
is to do business in it. The difficulties that will have to
be dealt with significantly reduce profit potential and
the firm can simply decide not to engage in any activity
in that market.

Channel
Management Model
Gain unrivalled insight into your
channel structure & strategy

Evaluating
your
business
portfolio
comprehensively

Benchmarking
Identifying
the best
practices in
the industry

Competitive
Profile
Matrix
Revealing
the strengths
and
weaknesses
of your
competitors

http://www.strategicmanagementinsight.com/tools/pest-pestel-analysis.html

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PEST & PESTEL Analysis | Strategic Management Insight

01.11.14 09:51

PEST variations

VRIO
Analysis

PEST analysis is the most general version of all PEST
variations created. It is a very dynamic tool as new

Evaluating

components can be easily added to it in order to focus

your internal
resources

on one or another critical force affecting an
organization. Although following variations are more
detailed analysis than simple PEST, the additional
components are just the extensions of the same PEST
factors. The analysis probably has more variations
than any other strategy tool:

STEP = PEST in more positive approach.
PESTEL = PEST + Environmental + Legal
PESTELI = PESTEL + Industry analysis
STEEP = PEST + Ethical
SLEPT = PEST + Legal
STEEPLE = PEST + Environmental + Legal +
Ethical...
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