Strategizing Tools

PEST/ PESTALE Analysis

The idea of the is similar to that of the SWOT analysis except that you’re focusing on external factors and solutions. It’s a great framework to combine with the scenario-based strategic planning model as it helps you define external factors connected to your business’s success.
PEST stands for political, economic, sociological, and technological factors. Depending on your business model, you may want to expand this framework to include legal and environmental factors as well (PESTLE). These are the most common factors you can include in a PESTLE analysis:
Political: Taxes, trade tariffs, conflicts
Economic: Interest and inflation rate, economic growth patterns, unemployment rate
Social: Demographics, education, media, health
Technological: Communication, information technology, research and development, patents
Legal: Regulatory bodies, environmental regulations, consumer protection
Environmental: Climate, geographical location, environmental offsets
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