2. Subjectivity. Another obvious disadvantage of the tool is the difficulty in objectively assessing the results of the PEST analysis of an organization. All the information received can be interpreted in their own way by different experts. The quality of the analysis will depend on the competencies of the person working on it.
3. Large investments. And finally, conducting a PEST analysis itself can in some cases be costly both in terms of resources and time. If you have a large company, then in order to get a decent result, you will have to hire good analysts and spend a lot of time analyzing external factors that affect the business.
The advantages of PEST analysis include:
1. Wide coverage of external environmental factors. PEST analysis covers political, economic, social and technological factors. This allows you to get a phone number list comprehensive view of the external environment and accurately assess the current position of the business in the market, as well as predict possible changes.
2. Risk and problem assessment. The company can determine in advance what risks and threats the business may face in different directions. With this information, it is possible to develop measures to reduce the strength of such risks and get ahead of competitors.
3. Support for strategic planning. PEST analysis is an important component of strategic planning. It helps companies develop long-term strategies adapted to external conditions. This contributes to more informed and effective decision-making.
4. Selecting a development direction. The analysis will allow you to abandon the development of unpromising business areas.
How to Conduct a PEST Analysis: A Step-by-Step Algorithm Using EcoMarket as an Example
The analysis should be carried out according to a specific maintain a social m ,ia presence methodology, which includes 6 consecutive steps. Let’s analyze the algorithm and stages of conducting a PEST analysis using the example of a new store with environmentally friendly food products that wants to open in a medium-sized city with a population of 600 thousand people.
Step 1: Define the analysis objectives and factors
Before you start analyzing and solving operational issues, it is important to find your goals. Find out why exactly you need a PEST analysis. The goals can be different: from developing a new strategy to assessing the risks of entering a new market.
Understanding the goals will help you focus on the most b2c fax relevant factors and reduce the time and resources spent on analysis. You need to understand what influencing factors you need in a specific situation. In our case, the goal is to understand what risks, problems, and challenges a new company in a new region may face.
