PEST Analyses – this is largely a “macro-economic” tool that can highlight trends that can either favor business prospects or present obstacles. In assessing any political, economic, social, and technological “mega trends” business leaders can identify and anticipate market transformations and also adjust strategies to avoid future problems. There are many variations on PEST to add Geographical, Demographical, Legal or many other factors to the analysis. PEST assessments are largely assessments of favorable or unfavorable external factors that can influence a business and therefore become relevant in strategic planning activities. A PEST analysis is easy to perform and many PEST templates are available. And, because PEST analysis largely looks at large external factors, understanding any “headwinds” or “tailwinds” early can have a dramatic impact on results. And, because PEST analysis examines external factors that can influence a business, or strategy, it is best to complete run through a PEST assessment prior to performing a SWOT analysis.
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