PEST analysis is a strategic tool used to evaluate the external macro-environmental factors that affect an organization. It stands for Political, Economic, Social, and Technological factors.
Political factors include government regulations, legal issues, and both formal and informal rules under which the firm must operate. Economic factors affect the purchasing power of potential customers and the firm's cost of capital. Social factors include the cultural aspects, health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions.
By understanding these four aspects, businesses can gain insight into the forces of change in their business environment and adjust their strategies accordingly.
Dive into competitiveness data and take into account the dynamics of your venture’s financial, techn...
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