Importance Of Pest Analysis In Business

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PEST analysis stands for political, Economic, Social and Technological analysis is a framework designed to study and analyze the macro business environment or the external environment of a firm in which it has to operate or is currently operating. It studies the macro forces that operate or determine the business environment at large. Many researchers and organizations while carrying out a market research or formulating a strategy or doing a strategic analyses use PEST analysis as a part of it. The importance of PEST analysis is evident from the fact that macro environment forces are not under the control of a firm or a company, hence a business has to be managed effectively to respond to the changing business environment. PEST analysis is believed to be created by Harvard professor Francis Aguilar in 1967. He introduce the concept as ‘ETPS’ in his 1967 book "Scanning the Business Environment" and later the name was modified to the current name. A large number of forces operate and determine the External environment of a business and PEST analysis tries to summarize it by studying the forces under four broad heads, however many extensions of PEST analysis are now being used that takes into consideration various other facets also like PESTEL or PESTLE analysis which is acronym for political, Economic, Social and Technological, legal and environmental analysis. The rising concern for ecosystems and environment have led to inclusion of such aspects into the analysis. The
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