However, there will always be factors outside of your control that affect how your business operates. One method for discovering and quantifying those factors is the PEST analysis. PEST is an acronym for political, economic, social and technological — external factors that commonly affect business activities and performance.
For example, opportunities can come from new technologies that help you reach new customers, from new funding streams that allow you to invest in better equipment, and from changed government policies that open up new markets.
Threats can include deregulation that exposes Pest analysis for rdb to intensified competition; a shrinking market; or increases to interest rates, which can cause problems if your company is burdened by debt.
Find out what forces of change are affecting your business environment. PEST Analysis is useful for four main reasons: It helps you to spot business or personal opportunities, and it gives you advanced warning of significant threats. It reveals the direction of change within your business environment.
It helps you avoid starting projects that are likely to fail, for reasons beyond your control. It can help you break free of unconscious assumptions when you enter a new country, region, or market; because it helps you develop an objective view of this new environment.
PEST Analysis looks at "big picture" factors that might influence a decision, a market, or a potential new business. SWOT Analysis explores these factors at a business, product-line or product level.
These tools complement one another and are often used together. How to Use the Tool Follow these steps to analyze your business environment, and the opportunities and threats that it presents. Use PEST to brainstorm the changes happening around you. Use the prompts below to guide your questioning, and tailor the questions to suit the specific needs of your business.
Brainstorm opportunities arising from each of these changes. Brainstorm threats or issues that could be caused by them. Our worksheet guides you through these steps. How could this change government or regional policy? Who are the most likely contenders for power? What are their views on business policy, and on other policies that affect your organization?
Depending on the country, how well developed are property rights and the rule of law, and how widespread are corruption and organized crime? How are these situations likely to change, and how is this likely to affect you?
Could any pending legislation or taxation changes affect your business, either positively or negatively? How will business regulation, along with any planned changes to it, affect your business? And is there a trend towards regulation or deregulation? How does government approach corporate policy, corporate social responsibility, environmental issues, and customer protection legislation?
What impact does this have, and is it likely to change? What is the likely timescale of proposed legislative changes? Are there any other political factors that are likely to change? Economic Factors to Consider How stable is the current economy?PEST analysis (political, economic, socio-cultural and technological) describes a framework of macro-environmental factors used in the environmental scanning component of strategic management.
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of Denmark. The PEST Analysis of UK’s Food Producing Industry 1. Introduction This report focuses on PEST analysis of UK’s food producing industry and giving some particularly essential ratios of some food producing companies.
With the diversification of economic and geography environment, food producing companies, especially multinationals need to.