What is a PEST analysis and how to do it effectively

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When it comes to running a business, we have all kinds of resources at our disposal to help us make decisions. Today we are going to discover PEST analysis , a strategic planning tool that will help you make decisions based on macroeconomic data: let's take a closer look at what it is and how to do it effectively .

What is PEST analysis?
PEST analysis is a tool to assess the macroeconomic environment in which your business operates .

PEST analysis
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Thanks to PEST analysis, your company will be able to anticipate changes in the environment , adapting strategies to future needs so that your company remains competitive.

Difference between PEST and PESTEL analysis
A PEST analysis must be distinguished from a PESTEL analysis . The former nepal phone number lead focuses on four dimensions or key points; the latter adds two additional factors : Legal and Environmental .

PESTEL analysis is used in sectors where regulation and environmental impact are an important factor, such as the energy industry.

PEST Analysis Factors
PEST is an acronym that refers to the Political, Economic, Social and Technological factors that affect your company.

market competition analysis
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Therefore, to carry out a PEST analysis you must take into account the following factors or dimensions before seeing how your business enters other markets.

Political factors : Study the legislation of the country where you will operate. For example, if you develop software, it may be legal in your home country, but not in others.
Economic factors : study the currency exchange when operating in different countries and the impact it will have on an economic level, whether it be taxes or other factors related to the expansion of your business.
Social factors : if you need a new team, take into account the interest of employees in remote work, search for talent in new markets...
Technological factors : Do you use technologies that are available in the countries where you are going to expand? Can you import them? Taking these details into account will help you.
How to do a PEST analysis
To do a PEST analysis effectively, the first step is to gather information about the external factors that could affect the company.

SWOT analysis templates

To do this, consider the needs of your business and the environment. This includes doing an industry analysis, getting information from specialized media, and more. Determine the most important PEST factors to start the analysis .

We recommend that you consider how to do a SWOT analysis effectively , since knowing the strengths and weaknesses of your business will allow you to complement the analysis and prioritize the areas to study.

You'll also need to consider political factors that may affect your business . Maybe there are changes in local regulations, or you discover that a country you were planning to expand to is experiencing significant political instability.

Don't forget other factors such as trade tariffs , and don't ignore the economic environment . You should study whether the market is expanding or in recession, know the purchasing power of your customers and other factors that will help you in your PEST analysis.

You also need to consider social factors such as consumer lifestyle and preferences , demographic trends and cultural norms . A product or service that is popular in your country may not be as popular in other markets.

Finally, consider the technology factor . Are there new technologies you can adopt? Is it certain that a certain technology you need is available in a country you want to expand to?

By taking these factors into account, you will know how to perform an effective PEST analysis so that you can make informed decisions based on realistic data.

At MASMOVIL NEGOCIOS we hope to have helped you understand what a PEST analysis is and how this perfect resource works when making decisions.