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In business analysis, PEST analysis (political, economic, social and technological) is a framework of external macro-environmental factors used in strategic management and market research. PEST analysis was developed in 1967 by Francis Aguilar as an environmental scanning framework for businesses to understand the external conditions and ...
In this model, four attributes are taken into consideration: factor conditions, demand conditions, related and supporting industries, and firm strategy, structure, and rivalry. According to Michael Porter , the model's creator, "These determinants create the national environment in which companies are born and learn how to compete."
A company is influenced by its environment. Many environmental factors, especially economical or social factors, play a big role in a company's decisions, because the analysis and the monitoring of those factors reveal chances and risks for the company's business. This environmental framework also gives information about location issues.
An example of this strategy is the furniture industry, where production strategy has to follow a pull-based strategy, since it is impossible to make production decisions based on long-term forecasts. However, the distribution strategy needs to take advantage of economies of scale in order to reduce transportation cost, using a push-based strategy.
A policy alternative's lack of political feasibility can often be attributed to its lack of political support or the result of controversy that may surround the issue the policy seeks to address. [5] Alternatively, a politically feasible alternative is one that has the greatest probability of "receiv[ing] sufficient political push and support ...
Click here for political news related to business and money policies that will shape tomorrow's stock prices. Read the latest financial and business news from Yahoo Finance Show comments
The Journal of Political Economy Vol. 97, pp. 1003–1026; Romer, Paul (1986). "Increasing Returns and Long-Run Growth". Journal of Political Economy. 95 (5): 1002–1037. doi: 10.1086/261420. JSTOR 1833190. S2CID 6818002. PN Rosenstein-Rodan, 1943: The Problems of Industrialisation of Eastern and South-Eastern Europe. The Economic Journal Vol.53
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