Polkadot JAM Slides - Token2049 - By Dr. Gavin Wood
Advantages of pest analysis
1. Advantages of PEST analysis
PEST analysis:
* provides an understanding of the wider business environment
* encourages the development of strategic thinking
* may raise awareness of threats to an organisation's ongoing profitability
* can help an organisation to anticipate future difficulties and take action to avoid
or minimise their effect
* can help an organisation to spot business opportunities and exploit them
successfully.
Disadvantages of PEST analysis
* The rapid pace of change in society makes it increasingly difficult to anticipate
developments that may affect an organisation in the future.
* Collecting large amounts of information may make it difficult to see the wood
for the trees and lead to "paralysis by analysis."
* The analysis may be based on assumptions that prove to be unfounded.
* PEST analysis only covers the remote environment and the results need to be
considered in conjunction with other factors, such as the organisation itself,
competitors and the industry in which it is operating. Additional tools and
techniques will be needed to cover these areas.
2. PEST analysis of news
Political factors
* the level of political stability
* the legislative and regulatory framework for business, employment and trade
* the tax regime and fiscal policy
* programmes of forthcoming legislation
* the dominant political ideology.
Questions to ask:
* When is the next election due?
* How likely is a change of government?
* Does the government incline to interventionist or laissez-faire policies?
* What is the government's approach to issues such as competition, corporate
social responsibility and environmental issues?
Economic factors
This part of the analysis is concerned with overall prospects for the economy. Key
measures would include:
* GDP/GNP
* inflation
3. * interest rates
* exchange rates
* unemployment figures
* wage and price controls
* fiscal and monetary policy.
Issues such as the availability of raw materials and energy resources and the state
of infrastructure and distribution networks may also be relevant.
Questions to ask include:
* Is the economy in a period of growth, stagnation or recession?
* How stable is the currency?
* Are changes in disposable income to be expected?
* How easily is credit available?
Social factors
These are probably the most difficult factors to quantify and predict, as personal
attitudes, values and beliefs are involved. Demographic factors such as birth rates,
population growth, regional population shifts, life expectancy or a change in the
age distribution of the population are also important.
Factors that may be relevant include:
* levels of education
4. * employment patterns
* career expectations
* family relationships
* lifestyle preferences
* trends in fashion and taste
* spending patterns
* mobility
* religious beliefs
* consumer activism.
Questions to ask:
* How much leisure time is available to customers?
* How is wealth distributed throughout the population?
* How important are environmental issues?
* What moral or ethical concerns are reflected in the media?
Technological factors
Rapid technological change has had far-reaching effects on business in past
decades. Factors to be considered here include:
* investment in research and development
5. * new technologies and inventions
* Internet and e-commerce developments
* developments in production technology
* rates of obsolescence.
Questions to ask:
* Which new technological developments will have implications for my business?
* Where are research and developments efforts focused?
* How are communication and distribution operations affected by new
technologies?