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PEST Analysis Definition
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PEST Analysis (Political, Economic, Social, and Technological) is a method whereby an organization can assess major external factors
that influence its operation in order to become more competitive in the market.
In the 1967 publication, "Scanning the Business Environment," Aguilar presented the Economic, Technical, Political,
and Social factors as being major influences on the business environment.
A comprehensive assessment of the major areas of influence
that affect the sector in which an organization is positioned, as well as the organization itself, can facilitate more effective strategic planning.
PEST Analysis can also be applied in assessing the in-house structure of an organization in order to identify strengths
and weakness in the internal politics, economic outlook, social climate, and technology base within the organization.
P - The Political aspect of PEST Analysis focuses on the areas in which government policy and/or changes
in legislation affect the economy, the specific industry, and the organization in question.
PEST Analysis can be used in conjunction with other forms of strategic business analysis, such as the SWOT (Strengths, Weaknesses, Opportunities
and Threats) model, for an even more comprehensive result.