- Project Management Terms
- Agile - The Definition of Continuous Change
- Servant Leadership - A Key Leadership Style in Agile
- 6 Steps to making reasonable decisions
- What is the BOSCARD method
- PEST Analysis: How Political, Economic, Social, and Technological Factors Impact Your Business
- 49 Processes in Project Management
- What is Aggregate Planning in Project Management?
- 25 PMP Formulas you must remember to pass the PMP exam
- Example with formulas Earned Value, Cost Variance and Schedule Variance
- Example with formular Cost Performance Index (CPI), Schedule Performance Index (SPI) and Estimate at Completion (EAC)
- Example with formulas Beta Value in PERT, Expected Monetary Value (EMV) and Risk Priority Number
- Example with formular Variance at Completion, Estimate to Complete (ETC) and To Complete Performance Index (TCPI)
- Example with formular Standard Deviation, Communication Channels and Cost plus Percentage of Cost
- Example with formular Cost plus Fixed Fee, Cost plus Award Fee and Cost plus Incentive Fee
- Example with formular Return on Investment (ROI), Payback Period and Cost Benefit Ratio
- Example with formular Present Value (PV), Future Value (FV), Target Price and Point of Total Assumption
- Kanban Board - Agile Project Chart
- Gantt Chart - Roadmap Project Chart
- What is a Timeline View in Project Management?
- PERT Chart - The Most Popular Project Management Diagram
- Work-Breakdown Structure (WBS) Chart
- Flowchart in Project Management
- Cause-Effect Project Charts - Fishbone Diagram
- Burn-up and Burn-down Project Charts
- Bar Chart in Project Management
- What is Pareto Chart
- What is Pie Chart
- What is Control Chart
- What is Matrix Diagram
- What is Critical Path Diagram
- What is Cumulative Flow Project Chart
- What is Enterprise Environmental Factors
- What is Arrow Diagramming Method (ADM)
- What is Cost Baseline
- What is Cost-Benefit Analysis
- What is Cost Engineering?
- What is Cost Management Plan
- What is Cost of Quality?
- What is Cost Overrun?
- What is Cost Performance Index?
- What is Cost Plus Fixed Fee Contract?
- What is Cost Plus Incentive Fee Contract?
- What is Cost Plus Percentage Of Cost Contract
- What is Cost Reimbursable Contract?
PEST Analysis: How Political, Economic, Social, and Technological Factors Impact Your Business
HOW P - E - S - T FACTORS IMPACT YOUR BUSINESS
As a business owner or manager, it is significant to be aware of the various factors that can impact your operations.
PEST stands for Political, Economic, Social, and Technology factors. PEST is a helpful analysis tool that helps businesses identify external environmental factors (usually macro-environmental) and understand the "big picture" of the business environment in which they operate, thereby identifying potential opportunities and threats.
PEST analysis helps enterprises understand the business environment. From there, they can map out a clear and appropriate plan for each specific region, make the most of the opportunities that come their way, minimize the threats and easily face the challenges.
Political Factors affect all business industries in a territory, and institutional and legal matters can affect the viability and development of any industry.
- Changes in taxation policies or trade agreements can impact your business's profitability.
- The stability of the government and the level of corruption in the country can also affect your business's success.
Enterprises often analyze the following aspects of the political and legal environment:
- Political stability
- National socio-economic development strategies/ policies and sectors/ fields/ regions/ localities
- Perspectives and policies on economic integration, open-door policy, international trade policy, etc
- Policy of tax
- Laws related to business
- Level of law enforcement
- Bureaucracy and corruption
- Quality of public service
Economic Factors refer to the state of the economy, including inflation rates, exchange rates, and overall economic growth. A strong economy can provide opportunities for business growth, while a weak economy can make it challenging to maintain profitability. Understanding the economic factors that affect your business can help you plan for the future and make informed decisions. Businesses need attention to both short-term and long-term economic factors and government intervention.
Commonly, enterprises will rely on the analysis of the following economic factors to decide to invest in industries and regions:
- The state of the economy, the current stage of the business cycle
- Factors affecting the economy like interest rates, inflation, etc
- Economic Policies of the Government
- Status of economic prospects in the future
- Labor supply, labor costs, unemployment, etc
Social Factors relate to changes in social attitudes and behaviors. Each country and territory has its unique cultural values and social factors, which are the characteristics of consumers in those regions. Demographic, geographic, cultural, and social changes affect nearly all products, services, markets, and consumers.
For example, changing trends in consumer behavior could impact demand for your product or service. It is vital to accommodate these changes and adjust your strategy accordingly.
Technological Factors include advanced technology that can impact products, services, markets, suppliers, distributors, competitors, customers, manufacturing processes, marketing practices, positioning, automation, data analytics, and artificial intelligence.
Adopting new technologies can provide opportunities for growth and efficiency while failing to keep up with technological changes can leave you at a disadvantage.
Technology factors are analyzed based on the following criteria:
- Government and business investment in research and development
- Speed, the cycle of technology, the rate of outdated technology
- The impact of information technology, internet on business operations, reducing communication costs and increasing the rate of working remotely
- The influence of emerging technology
- The impact of technology transfer, etc
PEST analysis can be a valuable tool for businesses of all sizes, helping them to identify potential opportunities and threats in the external environment. By analyzing the Political, Economic, Social, and Technological factors that impact your business, you can make informed decisions and stay ahead of the competition.
To conduct a PEST analysis:
In conclusion, PEST analysis is vital for any business looking to stay competitive in today's fast-changing environment.
By understanding the Political, Economic, Social, and Technological factors that impact your business, you can make informed decisions and stay ahead of the curve.
Whether you're a small business owner or a CEO of a large corporation, PEST analysis is a valuable tool that can help you achieve your goals.