How PEST examination Compliment SWOT examination

PEST examination is a short form for “Political, Economic, Social, and Technological examination” and it describes a framework of macro-environmental factors used in the environmental strategies. PEST examination would be able to supplement the SWOT examination in a Strategic Planning course of action.

Below are my interpretation of the four factors of PEST examination:-

1) Political

It deal with governmental policies which has a great influence to the economics in a country. It is a macro aspect of an analyse which meaningful changes to the policies making. The policies have great influence to the business sectors and confidence of investors.

Example: Reduction in import duty of floor tiles for ceramic industry can have its fair proportion of influence to the industry. It is viewed as positive to the local ceramic manufacturer as imported tiles are more costly. However, it is negative impact to an importers such as traders of such a product

2) Economic

The economic is an area in a macro economic ecosystem. It can affect the business outlook and its competitiveness. Some meaningful factors of macro economic are economic growth, exchange rate, interest rate, etc, All these factors have an effect to the profitability and cost of doing business in that business sector..

Example: Unstable bank interest rate affect the stability to the cost of a business and it can viewed as a Opportunities and / or Threats to do business.

3) Social

Social factors reflects the cultural aspects of a population in the country. It affect the workforce management which influence the productivity and cost of a business.

Example: Job preference from heavy to light industry changes the skill developed by any company

4) Technological

Technological factors is visible and can be validated easily as it is more tangible. It can be in a form of incentives by the government such as such as Research & Development incentives, automation reinvestment, high capital setup.

Example: Changes of consumer preference toward higher end product which can be produced with higher technology.

In conclusion, PEST examination can be used to analyze Opportunities and Threats and it can channel to use as the external factors of a SWOT examination template.

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