Framework for a PEST analysis

Framework for a PEST analysis

This is a tool to assist in analysing the overall business context an organization is operating in and covers:

- Political

- Environmental / Economic

- Social

- Technology

Examples of what could be considered in each area are:

Political – Any changes in policy– Impact on strategic direction – Timing? Change of government?  Policy changes? Legislative changes – Employment? New regulatory frameworks- Taxation changes –Reduction of corporate tax - Introduction of accelerated depreciation deduction allowance- Reduction of maximum personal income tax -Removal of withholding taxes in most cases - Import / export restrictions?  

Environmental – Kyoto protocol, Biodiversity, Climate Change, Desertification, Nuclear test Ban, Ozone layer protection; Safety and health, Cultural heritage of the land, Environmentally responsible corporate citizens.

 

Economic  - Foreign Exchange, Taxation policy, Interest rates, Funding sources, Dependence on Agriculture Exports and Development Aid. Manufacturing mainly based on agriculture.  Tourism low inflation. 

 

Social  - Informal Networks, Health -  Population under 14;  Population  over 65 years.   Education, Professional Development.

 

Technology Information management, Privacy of data, Reliability, Updates on technology,  Hurdles of Acceptance, Lack of History in New Technology; Protection of Intellectual Property; Ease of transferring funds with technology .

The revision of the framework for a PEST analysis enables a fundamental infrastructure to be presented in a more clearer way. The topic of change is considered as the most challenging issue for modern organizations. It is never easy to drive the mission into the vision, however, the adaptability to the new changes will be the efficient tool for sustainable development.