1. Introduction to PEST Analysis

2. PEST ANALYSIS
This form of business analysis examines the external environment and the global factors that may affect a business. It can provide a quick and visual representation of the external pressures facing a business, and their possible constraints on strategy.
It is usually divided into four external influences
on a business
P – Political
E – Economic
S – Social
T – Technological

3. PEST ANALYSIS
POLITICAL: This is concerned with how political developments, regionally, nationally and internationally might affect a business’s strategy.
Employee protection- health/safety, redundancy pay, discrimination, minimum wage
Consumer protection- truth in advertising, high-pressure sales tactics, sales agreements
Competition protection- unfair trade practices, monoply, mergers & takeovers

4. Economic growth and rising living standards
PEST ANALYSIS
ECONOMIC: This involves the analysis of a wide variety of economic factors and their effects on a business. They include:
Economic growth and rising living standards
Low/high levels of inflation
Low/high levels of unemployment
Balance of payments (value of imports vs exports)

5. PEST ANALYSIS
SOCIAL - What competitive advantage might a business gain by social changes taking place outside of the business?
Aging population, reduced birth rates, longer life expectancy
Changing role of women in the workplace
Improved Education – better skilled workers
Early retirement, more leisure time
Rising divorce rates, more “single” households
Job security
Immigration creating a wider range of consumer tastes

6. PEST ANALYSIS
TECHNOLOGICAL – The impact of technological advancement on business strategy.
Business Software applications (word processing, spreadsheets, database, accounting systems, inventory systems)
Computer-aided design
Computer-aided manufacturing
Internet/Intranet