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External Analysis - PEST

Business Management and Enterprise (Year 12) - Management (U4)

Kanwal Singh

A PEST analysis focuses on analysing a firms external business environment and is composed of four main components:

  1. Political environment

    • There are many political factors that can be analysed:

      • Tax laws

      • Stability of government

      • Type of political group

      • Consumer protection laws

2. Economic environment

  • There are many factors that can be analysed:

    • Economic growth

    • Macroeconomic indicators

    • Inflation

    • Unemployment

    • Interest rates

    • Exogenous shocks

3. Socio-cultural environment

  • There are many socio-cultural factors that can be analysed:

    • Population growth

    • Age of population

    • Cultural beliefs

    • Predominant religions

4. Technological environment

  • There are many technological factors that can be analysed:

    • Automation

    • Research and Development

    • Innovation in technological space

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