PEST analysis is a strategic business measurement tool.
PEST is an acronym for Political, Economic, Social and Technological factors.
These factors are primarily external factors which are used prior to doing a SWOT analysis (which is used to assess both internal and external factors).
PEST is used to assess business/strategy planning, marketing positioning, business and product development, product introduction, new idea, business diversification or to review the strategy or position of a organization.
There are variations to the PEST analysis like the PESTLE (includes Legal and Ecological/Environmental)
There are many situations where systematic PEST analysis gives clarity about the external factors which can affect the decisions such as :
- Brand in relation to a market
- Product Launch
- Merger and Acquisition
- Entering a new market
- Potential Partnership
- Investment opportunity
- Company assessing the market conditions
- Product versus competition
More Strategic Frameworks here.