There are many factors that can influence the progress of a business, both internal and external
elements. However, external environment variables are often overlooked.
This is why today we have decided to better explain the PEST analysis, which is so important and
useful for the creation of any strategic marketing plan .
Stay with me and discover what a PEST analysis is, its real importance and learn how to perform it.
What is a PEST analysis?
A PEST analysis, also known as PESTEL, is malaysia telegram data used to identify the external
factors of the business that may influence its development.
By external factors we mean political, economic, social and technological conditions that can affect a
company. This is precisely where the name comes from, from the acronyms of these variables.
How about we better understand each of these factors?
Political
The political factors that must be considered how i used root cause analysis to turn are the position of government leaders regarding certain attitudes.
A clear example of this is the taxes that may exist for certain products. Each government can make some changes according to its position on certain products .
In the political aspect we can also include legal factors, which for some products may be more rigid than others, such as medicines, cigarettes and drinks.
As political-legal factors we can also consider subsidies, labor laws, environmental and safety regulations, etc.
Economic
From an economic perspective, we must find list consider the current economic situation.
Important factors to consider may be the unemployment rate, economic stability or growth, interest rate, inflation, etc.
These and other factors are important for the business we are working in. In addition, we must consider that some may have more influence than others depending on the sector we are working in.
Social
We can say that not only the social factor must be considered but also the sociocultural factor. We have to analyze the situation of our target audience , or buyer persona , to understand their real relationship with our product.
It is important to analyze what consumers value. This varies not only according to the time but also to a variety of factors and this must be analyzed so that the risk is increasingly reduced.
Within the social aspect, there is also an analysis of the competition ; knowing what they are doing is important, not to do the same, but to understand what they offer to our consumer.
Technological
This is an important factor to be analyzed, since it can influence both the company and the consumer.
While technological advances can help companies by bringing faster and higher quality production, it is also easier for consumers to access some products or services.
Technology is evolving ever faster and companies are finding it difficult to keep up with this development.
Many businesses are unaware of all the resources available to them and how they can help production.
Producing at a higher speed, having better quality control and reducing waste. All of this can be reflected, in the not too distant future, in considerable savings in production.
On the other hand, consumers increasingly have access to resources they did not have before. Examples include online downloads, e-learning, digital entertainment, etc.
As a result, some services or products, if they do not change their form of distribution, may become obsolete.
Why is it important for businesses?
PEST analysis, despite being a simple and easy- to-use method, provides a clear view of the characteristics of the environment. This is important at any stage the company is in.
From developing the project to structuring a new business or creating the strategic plan for any launch or change of direction that we may decide to make.
By carrying out the PEST analysis, together with the market study , the risks are minimized and it is possible to carry out a more effective strategy .
How to perform a PEST analysis?
To perform a PEST analysis, first of all, you need to clearly understand the factors mentioned above. Once this is clear, you can follow the steps below to perform it.
1. Collect the relevant variables
The first step is to detect which variables can influence business development.
Once you have identified the political-legal, economic, social and technological variables that influence the business and its consumers, compile them and create a list.
The Internet is a good source for understanding the environment of the sector in which your business operates. To do so, don’t hesitate to spend a good amount of time discovering it.
2. Identify opportunities
Once you have compiled the factors that can influence your business, it is time to identify the opportunities that these variables can bring to the company.
For example, if there is a favorable trade agreement for exporting to new markets, or even if there is a way to make processes more efficient.
3. Recognize the threats
Just as opportunities have been identified, it is also important to find threats and everything that can put the success of the business’s actions and objectives at risk .
Identifying threats makes it possible to prevent future problems and minimize their negative impact before it is too late.
For example, if we use imported raw materials and the local currency is constantly devalued, it is important to recognize the impact on the final product and move on to the next step.
4. Create an action plan
Once aware of the opportunities that can be taken advantage of and the threats that can bring risk to good business development , it is time to create the action plan .
In this way we can take advantage of the opportunity and protect ourselves from risks.