PEST analysis
PEST: a food truck in Melbourne
Political
Economic
Social
Technological
Council street-trading permits
Ban on single-use plastic
Food prices up 6% this year
Office workers back 3 days a week
More people buying plant-based lunches
Festivals every summer weekend
Tap-to-pay on a phone
Order-ahead apps
Make a PEST analysis
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What a PEST analysis is
“In business analysis, PEST analysis (political, economic, social and technological) is a framework of external macro-environmental factors used in strategic management and market research.”
Types of PEST analysis
When to use a PEST analysis
A startup
Check the world outside before you open, like permits and food prices for a food truck.
Strategy
Four boxes for what you can't control: laws, money, people's habits and new technology.
Studying
A standard tool in business studies: pick a company and put two facts under each letter.
How to make a PEST analysis
- 1Draw four boxesPEST: a food truck in MelbournePoliticalEconomicSocialTechnological
- 2Fill in politicalPEST: a food truck in MelbournePoliticalEconomicSocialTechnologicalCouncil street-trading permitsBan on single-use plastic
- 3Fill in the restPEST: a food truck in MelbournePoliticalEconomicSocialTechnologicalCouncil street-trading permitsBan on single-use plasticFood prices up 6% this yearOffice workers back 3 days a weekMore people buying plant-based lunchesFestivals every summer weekendTap-to-pay on a phoneOrder-ahead apps
Helpful resources
Questions
- Who came up with it?
PEST analysis was developed in 1967 by Francis Aguilar as an environmental scanning framework for businesses to understand the external conditions and relations of a business in order to assist managers in strategic planning.
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