Many people are familiar with SWOT analyses, whether for a business or a person (the latter being a component of some professional CPD schemes), but fewer are familiar with PEST.
First, a recap (or introduction) for SWOT. This is a brainstorm (or ideas shower) to assess an organisation or individuals:
Strengths: what we are particularly good at.
Weaknesses: what we are particularly poor at.
Opportunities: where there might be benefits in addressing. In each case, we should also consider opportunity costs (i.e. where opening one door closes another).
Threats: where plans may get disrupted.
There are no hard and fast rules regarding what can, or cannot, be considered. The idea is to try to better understand the situation before developing a plan to move forward. The four aspects are not totally independent of each other: strengths, for example, should support opportunities and weaknesses may expose threats; some threats may highlight new opportunities.
PEST is a similar exercise that focuses more on the environment (in the broadest sense) factors and how they might change in the foreseeable future:
Political: considering what the current government is doing, how that may change should there be a government change. For a business, government can also mean governance.
Economic: considering how the financial arena currently stands and how it might change. In basic terms it might be no more than how much money do we (or I) have, how much more could we/I leverage and will we/I be able to afford interest payments (based on what we think we could be earning)! Stock market and share movements, plus tax changes can all affect this, so it’s linked to
Social: considering lifestyle factors, social expectations, media influences, etc.
Technological: considering technological changes and how they impact communications, transport, etc.
As with SWOT, the four PESTs are not independent. In many ways, they are more interrelated; for example, politics will influence the economy which, in turn, influence technological developments and society.
Some people have extended PEST to PESTLE, adding Legal and Environmental or even to STEEPLE which adds Ethical into the mix. These are all valid considerations but I’ve never found a factor that would be excluded from PEST. My main point for writing this is more to add PEST to the SWOT toolbox. Look at PEST first in order to better understand the environment in which we’re conducting our SWOT, before developing our subsequent plan of action.