PEST-Analysis

PEST-analysis is a long-established methodology, commonly applied in business “for understanding the external macroenvironment in which an organization operates”. The PEST acronym stands for Political, Economic, Social and Technological, representing the types of factors identified in the analysis .

PEST-analysis focuses on external influences and the impact they may have on an organization, country, or sector. Potential benefits of applying this methodology include guiding strategic decision-making and gaining competitive advantage, as well as achieving positive alignment with external forces and avoiding errors that could compromise effective performance. It helpfully complements a related technique, SWOT (Strengths, Weak-nesses, Opportunities and Threats) analysis, to provide a full picture from both the inside and the outside. Conversely, one of the limitations of PEST-analysis is that it is considered insufficient on its own for strategy development, requiring in addition the use of other tools such as SWOT and competitive industry analysis. PEST analysis may be time-consuming, so broad in range that only some factors may be relevant or may focus on issues that impact very differently in individual regions. It is important to understand the nature and scope of each of the four dimensions: political, economic, social, and technological. In the business environment, a key political issue is the extent of government intervention in the economy, while the economic dimension accommodates data such as inflation, interest and exchange rates. Social factors include lifestyles, education, immigration and emigration, while technology encompasses the potential for efficiencies and new value for customers

Sources:

⠀ Cox, J. (2021). The higher education environment driving academic library strategy: A political, economic, social and technological (PEST) analysis.The Journal of Academic Librarianship,Volume 47, Issue 1,102219. Retrieved from: https://doi.org/10.1016/j.