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