Analyzing Your Strengths and Weaknesses

Most of us have gotten used to hearing marketers talk about a "SWOT" analysis - that is an xcerise where a company and its leaders as ell as employees and other stakeholders, review the strengths, weaknesses, opportuities and threats that they need to acknowledge and address.  While strengths and weaknesses are internally generated, opportunities and threats reprsent external drivers. But now there is a new twist on this type of strategic planning.

In addition to SWOT, business owners are encouraged to look at PEST - that is political, economic, social and technology issues that are impacting their success and profitability. This updated, more modern approach enables the organization to be more realistic about the landscape and the drivers that are influencing the business' growth.

I recently heard this term "PEST" used by fellow marketers and I had to confess it was not something I was at all familiar with, but it made so much sense as an important extension of any busienss strategic planning process. I did what everyone else does and Googled for details at https://en.wikipedia.org/wiki/PEST_analysis

According to Wikipedia,  

  • Political factors indicate how the government intervenes in the economyin areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability.
  • Economic factors include economic growth, interest rates, exchange rates, the inflation rate.
  • Social factors include the cultural aspects of the community and other demographics such as health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety.
  • Technological factors include technological aspects like R&D activity, automation, technology incentives and the rate of technological change.

Along with the traditional SWOT analysis, PEST analysis provides an effective  tool for drilling down more deeply to gain a detailed understanding of external environment - helping companies have clearer insights into future opportunities based  market growth or decline, business position, potential and direction for operations. Adding PEST analysis to other market research can help a business and its leaders truly understand the opportunities that lie ahead.

Conducting a PEST analysis can be a good complement to any company that is preparing a short and long term prognosis of its anticipated sucess and profitability.