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PEST Analysis (Political, Economic, Social & Technical Analysis)

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PEST Analysis (Political, Economic, Social & Technical Analysis)

A PEST analysis (also sometimes called STEP, STEEP or PESTLE analysis) looks at the external business environment. In fact, it would be better to call this kind of analysis a business environmental analysis but the acronym PEST is easy to remember and so has stuck. PEST stands for Political, Economic, Sociocultural and Technological.
(Technological factors in this case, include ecological and environmental aspects - the second E in STEEP and PESTLE, while the L in PESTLE stands for legal). The analysis examines the impact of each of these factors (and their interplay with each other) on the business. The results can then be used to take advantage of opportunities and to make …show more content…

Thus although tax rates are generally decided by politicians, tax decisions generally also include economic considerations such as what is the state of the economy. In Europe, the politicians drove the introduction of the euro currency but the impacts include economic factors: cross-border pricing, European interest rates, bank charges, price transparency and so on. Other economic factors include exchange rates, inflation levels, income growth, debt & saving levels (which impact available money) and consumer & business confidence. There can also be narrow industry measures that become important. Issues such as the availability of skilled labour or raw-material costs can impact industries in different ways.

Advances in technology can have a major impact on business success, with companies that fail to keep up often going out of business.
Technological change also affects political and economic aspects, and plays a part in how people view their world. Just as one example, the
Internet has had a major influence on the ways consumers and businesses research and purchase products. Whereas ten or even five years ago, it was rare for consumers to consider cross-border purchases this is now becoming common via services such as eBay, with the result that even small businesses can now serve a global market.
Politicians are still coming to grips with the tax issues involved.
Meanwhile the music industry has still not found an effective solution to the threat posed by the

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