PEST Analysis – Political, Economic, Social and Technological forces

PEST analysis focuses on only external factors which may affect your organisation, and although there may be some overlap with the Opportunities and Threats portion of the SWOT analysis, it can be seen as an expansion on this.

It will give you a clearer idea of the different external forces within the market over which you have no control, but will significantly impact your organisation regardless.

Since you have no control over them, these external changes may often be seen as threats to your success. However, if they are anticipated they can be used to your advantage; predicting the possibilities for change in each area can help you to plan for change and development so that you can continue to be as successful as possible.

Political forces which may affect an organisation could include:

  • Changes in government grants
  • New legislation eg. relating to labour laws or health and safety
  • Environmental law
  • Political stability or instability

There are many economic forces to consider including inflation and property prices which may impact general costs such as rent, salaries and admin.

Other aspects of the economy may change, such as the amount of disposable income people have to spend on a commercial aspect of your organisation, and increase or decrease in poverty or health funding may affect how many people need the help of some organisations.

Another economic factor may be fundraising trends, including why people give and how. Depending on what these trends are at any given time, you may need to adapt your strategy to adapt to the ways in which people are currently donating to charities.

Social aspects include trends and current interests of a demographic.

Habits of your target audience such as places they go more or less often, what they do and at what times of the day or week they do it may be social factors which affect you.

Influxes or shortages of volunteers may also be affected by social forces.

Developing technologies may allow you to develop and adapt the services you provide and find new ways to reach people and market to them.

Technology may affect how much people need certain services if there is less need for people due to tasks that can be done automatically or using technology.

For More Information:

See our other posts detailing how to do Competitor Research and a SWOT analysis as part of your market research, or our Introduction to Competitor and Market Research.

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