Steps to Conduct a PEST Analysis
Posted: Mon Jan 27, 2025 7:27 am
Step 1: Identify factors for PEST analysis
To begin with, a list of factors that may influence the enterprise's activities is prepared. It should include four sections: political, economic, socio-cultural and technological factors.
Step 2: Identifying the degree of influence of realtor email list factors
After completing the first step, you need to start assessing each factor included in the list. In this case, a scale from 1 to 3 is used, where:
1 - not a very significant factor, its change will not have any impact on the company's affairs;
2 - medium in importance, global changes in the factor will significantly affect the company's activities;
3 - a factor of high importance, even its slight fluctuations will affect the company's profit.
Experts do not add to the list factors that do not intersect with a particular business.
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Step 3: Conducting an assessment of the acceptability of the factor change
To determine the probable changes, a scale from 1 to 5 points is used: 1 - no possibility of change, 5 - the highest chance. At the same time, for maximum reliability, the opinion of a large circle of experts in the required field is taken into account.
After the grades are entered, the arithmetic mean is calculated in the final column.
Step 4: Assessing the real importance of factors
In order to identify which external conditions should be given more attention, at this stage the real significance of each factor from the list is assessed. Real significance is calculated as the probability of a factor changing, taking into account the strength of its impact on the company's success.
The higher the significance, the more carefully this factor must be treated so that, although it is of high importance, it cannot suddenly lead to the collapse of the enterprise.
Steps to Conduct a PEST Analysis
Step 5: Create a PEST Analysis Summary Table
At the final stage, a matrix is created with all factors placed in one table. The matrix itself is not the result of a PEST analysis of the environment. Based on the table data, conclusions are made about how each factor affects the organization's affairs. An action plan is drawn up that will significantly reduce the negative impact on the business.
Nowadays, businessmen feel significant consequences of the population's income decline. This is reflected in the reshuffling of the consumer basket. Expensive goods are disappearing from it, and there is a general decrease in the number of necessary items. In order not to lose income, entrepreneurs should review their offers taking into account the current situation: offer other goods, create new, more advantageous offers for buyers in terms of savings.
To begin with, a list of factors that may influence the enterprise's activities is prepared. It should include four sections: political, economic, socio-cultural and technological factors.
Step 2: Identifying the degree of influence of realtor email list factors
After completing the first step, you need to start assessing each factor included in the list. In this case, a scale from 1 to 3 is used, where:
1 - not a very significant factor, its change will not have any impact on the company's affairs;
2 - medium in importance, global changes in the factor will significantly affect the company's activities;
3 - a factor of high importance, even its slight fluctuations will affect the company's profit.
Experts do not add to the list factors that do not intersect with a particular business.
Read also!
"Time Management Principles: Rules, Methods and Popular Applications"
Read more
Step 3: Conducting an assessment of the acceptability of the factor change
To determine the probable changes, a scale from 1 to 5 points is used: 1 - no possibility of change, 5 - the highest chance. At the same time, for maximum reliability, the opinion of a large circle of experts in the required field is taken into account.
After the grades are entered, the arithmetic mean is calculated in the final column.
Step 4: Assessing the real importance of factors
In order to identify which external conditions should be given more attention, at this stage the real significance of each factor from the list is assessed. Real significance is calculated as the probability of a factor changing, taking into account the strength of its impact on the company's success.
The higher the significance, the more carefully this factor must be treated so that, although it is of high importance, it cannot suddenly lead to the collapse of the enterprise.
Steps to Conduct a PEST Analysis
Step 5: Create a PEST Analysis Summary Table
At the final stage, a matrix is created with all factors placed in one table. The matrix itself is not the result of a PEST analysis of the environment. Based on the table data, conclusions are made about how each factor affects the organization's affairs. An action plan is drawn up that will significantly reduce the negative impact on the business.
Nowadays, businessmen feel significant consequences of the population's income decline. This is reflected in the reshuffling of the consumer basket. Expensive goods are disappearing from it, and there is a general decrease in the number of necessary items. In order not to lose income, entrepreneurs should review their offers taking into account the current situation: offer other goods, create new, more advantageous offers for buyers in terms of savings.