PEST Framework Infographic

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PEST analysis refers to the analysis of the macro environment, also known as the large environment, which refers to the various macro forces affecting all industries and enterprises. To analyze macro environmental factors, the specific content of the analysis will vary according to the characteristics and business needs of different industries and enterprises themselves, but they are generally aimed at the analysis of the main external environmental factors of four categories of enterprises: 1. political, 2. economic, 3. technical and 4. social. In a nutshell, this is called PEST analysis.

  1. Political and legal environment - some of examples of political and legal factors for reviewing include:

    the nature of the ruling party, the political system, the economic system, the change of the government’s regulatory tax law, the number of various political action committees, the revision of the special law, the environmental protection law, the industrial policy, the investment policy, and the level of national defense expenditures. Regional relations The frequency, severity and location of protests against the government.

  2. Economic environment - some examples of the economic factors for reviewing include:

    GDP and its growth rate, availability of loans. The level of disposable income, residents' consumption (savings) trend. Interest rates. Inflation rate. scale economy. Government budget deficit, consumption pattern, trends in unemployment, the level of labor productivity, market conditions foreign economic conditions import and export factors income differences of different regions and consumer groups price fluctuations monetary and fiscal policies.

  3. Socio-cultural environment - some of the social and cultural factors for reviewing include:

    the number of special interest groups for women’s fertility, the number of marriages, the number of divorces, the number of births, the death rate, the migration and the death rate, the social security program, the life expectancy of the population, the average income per capita, the lifestyle, the average disposable income, the trust in the government, attitudes toward work, buying habits, concerns about ethics, saving preferences, gender roles, investment preferences, racial equality, birth control measures, average education status, attitudes toward retirement, attitudes toward quality, attitudes toward leisure, attitudes toward service, attitudes toward foreigners, pollution control versus energy, the project of saving social activities, social responsibility, attitude to profession. Attitude to authority. Population changes in cities, towns and rural areas, religious beliefs.

  4. Technological Factors - some of the technological factors for reviewing include:

    the state's investment in and support for scientific and technological development; the technological development trends in this field and the total amount of research and development expenses; the technology transfer and technology commercialization speed; the patent and its protection status, etc.

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