PEST Analysis?

in an organization, it is very important to consider its environment before beginning the marketing process.

how do they analyse their environment??

the answer is

😍 PEST ANALYSIS 😍

So what PEST Analysis is all about? 😟

• It is a concept in marketing principles.
• This concept is used as a tool by companies to track the environment they’re operating in or are planning to launch a new project / product / service etc.
• PEST analysis (political, economic, social and technological) describes a framework of macro-environmental factors used in the environmental scanning component of strategic management.
• It gives a bird’s eye view of the whole environment from many different angles that one wants to check and keep a track of while contemplating on a certain idea/plan.

COMPOSITION

The basic PEST analysis includes FOUR factors:

1. Political factors - how the government intervenes in the economy. Areas including tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. 
2. Economic factors - include economic growth, interest rates, exchange rates, the inflation rate. These factors greatly affect how businesses operate and make decisions.
3. Social factors - include the cultural aspects & health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. High trends in social factors affect the demand for a company's products and how that company operates. For example, the ageing population may imply a smaller and less-willing workforce (thus increasing the cost of labour).
4. Technological factors - include technological aspects like R&D activity, automation, technology incentives and the rate of technological change. These can determine barriers to entry, minimum efficient production level and influence the outsourcing decisions. Furthermore, technological shifts would affect costs, quality, and lead to innovation.