PEST analysis is used to assess four types of external factors (political, economic, socio-cultural and technological) in relation to a company's business situation.
PEST analysis helps to identify how the listed factors can affect the company's performance and operations in the long term.
A more elaborate version of the PEST taiwan phone code analysis of the company is the PESTEL analysis, which also takes into account environmental factors (Environmental) and legal factors (Legal).
The three main stages of a PEST analysis are: identifying the relevant factors relating to each segment of the environment, assessing the impact of each factor on the functioning of the organization, and identifying the relationship between the company and its macroenvironment.
When analyzing political factors, it is important to consider any issues related to the political and legal situation in the country in which the company operates or plans to operate.
The analysis of economic factors must include information on the economic situation of the country.
Sociocultural factors include issues related to a country's demographics.
When analyzing technological factors, the country's level of innovation is taken into account.
Once the factors present in the company's macroenvironment have been identified, it is necessary to evaluate which factors will have a positive impact (opportunities) and which will have a negative impact (threats) on the company.
The purpose of performing a PEST analysis is to obtain an overall view of the organization so that appropriate measures can be taken to improve the overall health of the company, strengthen its position in the market and gain a competitive advantage.
The most common, along with the PEST analysis, are the SWOT analysis and the Porter 5 Forces analysis.
PEST analysis is a valuable tool when developing an organization's operational strategy.