PEST and Its Concepts
The concept of PEST examination seems quite simple. Indeed, there are 4 elements of PEST examination such as political, economic, social and technological factors. It is difficult to say which factor plays the most important role in PEST examination. It depends on the company, its mission and goals. It for one company technological factors play the most crucial role, the other company should pay the most attention to political changes and economic factors. It also depends on where the company wants to be in near and long term future. This is to say that PEST examination is very often combined with strategic planning. However are, strategy implies both internal and external factors while pest examination focuses mostly on external factors and company position and mission in external environments. Now let’s analyze concepts of PEST examination and its meaningful elements.
Every company, whether it is small business or a large corporation, is registered or operating in a certain country. Sure, the company may be registered in some exotic islands, while it is truly operating in a European country. Anyway, every company should take into consideration political factors. Why politics? How does it influence business ecosystem? Politics seems to be only about people making statements and declaration which we see mostly on TV. However, every information articulated by a noticeable politician may have very serious consequences for national and in some situations already international economy. That’s why analytical departments of major companies analyze statements of political leaders and their possible consequences for their particular business. Those who ignore and refuse to analyze political developments and news may pay a high price, because political component is very important in strategic planning. Political instability they consequence in economic changes and consequently a chosen strategy will simply not work. This argument takes us to economic factors.
That should be mentioned that national economy directly influences customer purchasing strength. People must have money to be able to pay for sets or products. That’s why, before set afloat of the new product or service offering, the company needs to analyze economic conditions in the country. There are various indicators and indexes that estimate national economy’s well being. In the economy is on the rise, people and businesses have money, access to cheap loans and financial programs, and consequently, they can provide paying reasonable prices for products and sets. Armed with figures it will be easier to design strategic plans pay on general economic situation in the country. Believe it or not, but it is possible to make very attractive offers already in a post crisis economy.
As to the social aspect, it should be noted that society forms the confront of business, as business is an inseparable part of the society. In order to be successful it is really necessary to estimate and estimate social trends in terms of generating profits for the company. Were living in the age of social media so, it has become easier to keep track of all social trends and tendencies. It goes without saying that no progress is possible without an effective use of latest technologies. This statement is already not disputed.