PEST Analysis Five Forces Model - Market Intelligence, Competitive Intelligence Research from and by Competitive Intelligence Professionals

PEST Analysis. A framework to identify external market factors to potential change

As an addition to Porter’s Five Forces model, competing organization in any market environment are likely to be planning changes to deal with external trends or shocks. PEST provides a framework for quick or thorough analysis.

Based on Porter’s Five Forces model where competitive rivalry, buying power, supplier power, the threat of new entrants and substitution are evaluated, these five forces’ likely future impacts and behaviors should – in reflection of additional external factors – be predicted as

Politics, Legislation

Governmental topics, taxation issues, environmental controls and dependencies, subsidies & quotas regulations, employment and labor laws, consumer legislations and regulations, competition issues, health & safety concerns and issues.

Economy, Business Environment

Industry growth potentials, the various investment levels, strategies and positions, costs of raw materials and supply streams, divestments or capacity shifts at the supply base, energy availability and utility cost, transportation, logistics factors, consumer spending and its projected trend, inflation concerns and macro economic indicators, unemployment rates and other labor market indicators, disposable income, borrowing patterns, loan structures, debt signals, future prospects.

Society

Demographics shifts and changes, wealth distribution, social mobility, institutions, education, schooling, lifestyle trends, use of time, attitudes to work, leisure, relationships, family, fashion, focus and development of interests.

Technology

Innovation rates, development times, technology investments, adoption speed and product life cycles, cost reductions (deflation), return on investments, technology incentives, government investment, cross technological networking and developments.