tags # # # #
A scan of the external macro-environment in which the firm operates can be expressed in terms of the following factors:
- Political
- Economic
- Social
- Technological
The acronym PEST (or sometimes rearranged as "STEP") is used to describe a framework for the analysis of these macroenvironmental factors. A PEST analysis fits into an overall environmental scan as shown in the following diagram:
|
Political Factors
Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include:
- tax policy
- employment laws
- environmental regulations
- trade restrictions and tariffs
- political stability
Economic Factors
Economic factors affect the purchasing power of potential customers and the firm's cost of capital. The following are examples of factors in the macroeconomy:
- economic growth
- interest rates
- exchange rates
- inflation rate
Social Factors
Social factors include the demographic and cultural aspects of the external macroenvironment. These factors affect customer needs and the size of potential markets. Some social factors include:
- health consciousness
- population growth rate
- age distribution
- career attitudes
- emphasis on safety
Technological Factors
Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions. Some technological factors include:
- R&D activity
- automation
- technology incentives
- rate of technological change
External Opportunities and Threats
The PEST factors combined with external microenvironmental factors can be classified as opportunities and threats in a SWOT analysis.
The End, what is next?
Note: the page content was squeezed for you with a focus on , by Paperfree Magazine Team, editor -
Go ahead and share it!
check this out, PEST Analysis Tweet
Want more content related to "" ? Subscribe PaperFree Magazine!
We will send an email from PaperFree Magazine with the top content on this subject: , .
- PUBLISH CONTENT
- Real Estate Investment Principles by Billionaire Bruce Flatt
- Real Estate Investing Basics: 2 Ways of Real Estate Investment
- Back to Basics: Understanding Real Estate
- 5 Best Ways to Invest in Real Estate For Starters
- 7 Ways On How To Make Money In Real Estate
- 6 Factors To Look For Before Investing in Real Estate
- Return on Investment (ROI) In Real Estate & Its Calculation
- How Much Money To Invest in Real Estate
- Real Estate Business: 7 Challenges You Need To Know Before You Start
- Real Estate Investment Trust (REIT)
- Introduction of Real Estate Investment Trusts (REITs)
- Direct Real Estate Investment Vs REITs - Which One To Choose?
- REITS, Real Estate Funds & Real Estate Mutual Funds: The Comparison
- Equity Vs Mortgage Real Estate Investment Trust
- Assessing A Real Estate Investment Trust (FFO and AFFO)
- Real Estate Investment Trust (REIT) and Its Risks
- Counties by population based on United States Census
- Trump's tax report and tax avoidance leveraging Real Estate business
- Demographic trends are reshaping the real estate market in the US