A business leader needs to know how change in the business environment can create or develop significant opportunities for his or her company. Herein rests the importance of PEST Analysis. It is an important tool that helps you understand the picture of Economic, political, technological and social environment in which you are operating. This article endeavors to offer you a comprehensive study of PEST Analysis.
PEST Analysis – Definition
PEST Analysis can be described as a frame work which is used in environmental scanning of strategic components. It can be said as an important part of external analysis, especially when doing market research or strategic analysis. It gives an overview of various macro-environmental factors that organizations need to consider. It is used by business leaders to build their future vision. Use of PEST Analysis helps you become free of unconscious assumptions. Moreover, with the use of this tool, you can get adapted to the new environment easily.
Major Elements of PEST Analysis
PEST Analysis comprises of four factors and one should consider these factors to analyze the business environment. Before starting the marketing process, it is very important for companies to consider and know about its environment. The environmental aspects should encompass multiple aspects of planning. Below is the description of four factors in detail.