What is a PEST analysis? Preparing your business for external impacts

PEST analysis definition

PEST analysis is used to evaluate external and macro environmental factors that impact your organization, specifically political, economic, social, and technological ones. This four-point analysis method gives your business a framework to identify the most influential factors in your industry, with a focus on entering new business markets and growing within your industry. A PEST analysis can help companies predict how effective or successful a certain business strategy will be in terms of profitability and revenue. 

Other common variations of a PEST analysis include PESTLE or PESTEL, which extends the acronym to include legal and environmental factors. Other factors may also include demographic trends as well as regulatory factors associated with government laws, international and national standards, and other compliance regulations.

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