What is a PEST Analysis?

A PEST analysis is a strategic business tool used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact on their business now and in the future. 

The framework examines opportunities and threats due to Political, Economic, Social, and Technological forces. Outputs from the analysis inform strategic planning processes and contribute to market research.

The output from a PEST analysis is useful for informing other business management processes such as SWOT analysisSOAR analysisrisk analysis, or a Business Model Canvas.

There are many variations of this framework, which look at different external factors, depending on which industry or market the organization operates in. Examples include PESTLE, STEEPLE, STEER, and STEEP.

Why do a PEST Analysis?

  • Helps to evaluate how your strategy fits into the broader environment and encourages strategic thinking
  • Provides an overview of all the crucial external influences on the organization
  • Supports more decisive and knowledgeable decision making
  • Assists planning, marketing, organizational change initiatives, business and product development, project management, and research papers

Who should use a PEST Analysis?

A PEST analysis is useful for any organization that needs to gauge current and future markets. Predominantly, this is conducted by senior management, C-levels for strategic planning purposes. External agencies, bodies, stakeholders and decision makers who may have perspectives as well as consultants and parters can also offer valuable insights into the PEST analysis.

The significance of each area in PEST Analysis will vary for different industry sectors. For example, there is likely to be a different emphasis on the technology element for IT organizations compared with those involved in health, tourism, mining, defense, and banking.

Facilitation tips in conducing a PEST Analysis

PEST Analysis Template


Political or politically motivated factors that could impact the organization.

Examples include:

Government policy, political stability or instability, bureaucracy, corruption, competition regulation, foreign trade policy, tax policy, trade restrictions, labor/environmental/copyright/consumer protection laws, funding grants & initiatives, etc.

Questions to ask:

  • What government policies or political groups could be beneficial or detrimental to our success?
  • Is the political environment stable or likely to change?


Social attitudes, behaviors, and trends that impact on your organization and target market.

Examples include:

Attitudes and shared beliefs about a range of factors including money, customer service, imports, religion, cultural taboos, health, work, leisure, the environment; population growth and demographics, immigration/emigration, family size/structure, lifestyle trends, etc.

Questions to ask

  • How do our customer’s beliefs and values influence their buying habits?
  • How do cultural trends and human behavior play a role in our business?


Overall economic forces that could impact on your success.

Examples include:

Economic trends, growth rates, industry growth, seasonal factors, international exchange rates, International trade, labor costs, consumer disposable income, unemployment rates, taxation, inflation, interest rates, availability of credit, monetary policies, raw material costs, etc.

Questions to ask:

  • What economic factors will affect us moving forward?
  • How does the performance of the economy affect us at the moment?
  • How are our pricing, revenues, and costs impacted by each economic factor?


Technology that can affect the way you make, distribute, and market your products and services.

Examples include:

Technology and communications infrastructure, legislation around technology, consumer access to technology, competitor technology and development, emerging technologies, automation, research and innovation, intellectual property regulation, technology incentives, etc.

Questions to ask:

  • What technological advancements and innovations are available on the horizon?
  • How will this technology impact on our operations?

How to Do a PEST Analysis

Analyze and consider both the current status of factors in the PEST template and how potential changes might affect the organization in the future.

Tip To get the most from the PEST technique, gather input from the participants with different perspectives. When you’re working with a large or distributed team, getting everyone together at the same time can be difficult, inconvenient, and costly. Using different technologies like video conferencing, online forms, and collaborative brainstorming software such as GroupMap can help overcome these challenges.


Brainstorm ideas for each area of the PEST analysis template


Review responses, and collate ideas.


Rate the ideas according to likely impact on the organization.


Share the outcomes of the session to relevant stakeholders.

Cross Device Compatibility

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