PEST Analysis Template
Understand how the rest of the world impacts your business — and how to manage risks even when you don’t have control over them.
About the PEST Analysis Template
A PEST analysis is a tool for determining how your business interacts with the world around it. Using its four quadrants — Political, Economic, Social, and Technological — you and your team can analyze every factor that might change the way you do business internally. A PEST analysis helps you understand risk, plan for change, and profit no matter which way the wind blows.
What is a PEST Analysis?
A PEST analysis is a strategic business tool that allows businesses to understand how various elements might impact their operations. By brainstorming how to fill in the four quadrants, members of a team can discover, evaluate, organize, and track the outside factors underlying business outcomes.
Once you complete a PEST analysis, you can use the resulting information to inform your strategic planning, budget allocation, market research, and more.
What does PEST stand for?
PEST stands for the four main external factors that may impact a company’s performance: Political factors, Economic factors, Social factors, and Technological factors. Each quadrant represents a source of both risk and reward — one your company can’t control but can plan for and even take advantage of.
The 4 factors of a PEST Analysis
The PEST Analysis Template revolves around four main factors. Let’s take a deeper look at each factor:
1. Political
Many organizations are impacted by political or politically-motivated factors. Government policy, political instability, corruption, foreign trade policy and trade restrictions, labor laws, environmental laws, and copyright laws are just a few examples of how the political environment can affect a company’s strategic planning.
When evaluating the political aspect of a PEST analysis, you should ask: What governments, government policies, political elements, or groups could benefit us or disrupt our success?
2. Economic
For businesses, economic factors can prove beneficial or detrimental to success. Industry growth, seasonal changes, labor costs, economic trends, growth rates, exchange rates, unemployment rates, consumers’ disposable income, taxation, and inflation each carry a sizable potential impact on the business.
When evaluating the economic aspect of a PEST analysis, you should ask: What economic factors might impact our company’s pricing, revenue, and costs?
3. Social
Social attitudes, trends, and behaviors might influence your business, customers, and market. Attitudes and beliefs about money, customer service, work, leisure, trends in lifestyles, population growth, demographics, family size, and immigration can heavily impact a business.
When evaluating the social aspect of a PEST analysis, you should ask: How do our customers’ and potential customers’ demographics and values influence their buying habits?
4. Technological
Technology can affect your organization’s ability to build, market, and ship products and services. The biggest potential impact here is that technological advancements will arise to make your project obsolete. Legislation around technology, consumer access to technology, research and development, and technology and communications infrastructure impact most businesses and organizations.
When evaluating the technological aspect of a PEST analysis, you should ask: How might existing or future technology impact our growth and success?
There’s also an expanded version of PEST, PESTLE, which considers legal and environmental factors.
How do you fill in the PEST Analysis Template?
Start by adding the PEST Analysis Template to a collaborative Miro board. Then follow these steps:
Step 1: Brainstorm
To get started, brainstorm the various PEST factors — political, economic, social, and technological — that might impact your business. You can hold a large brainstorming session or invite your teammates to brainstorm themselves and come prepared with ideas. Ask each team member to come up with a few ideas for each of the four factors.
As each factor comes up, add a note to the appropriate quadrant of the template.
Step 2: Rank
With the factors in place, it’s time to rank them based on their expected level of impact on the organization. If there are significant discrepancies in ratings, discuss those! Allow people the time and space to change their minds. Adjust the ranking as your teammates provide more input.
Step 3: Share
Now it’s time to share your completed PEST analysis with stakeholders. One of the main purposes of a PEST analysis is to keep people informed of various external factors that can impact the business. Presenting your ideas in an intuitive and easy-to-understand way is a critical part of the process. Make sure to use your analysis to inform decision-making and ongoing strategy development.
Step 4: Repeat
Maintain awareness of these various factors and plan to accommodate them in the future. That means repeating the PEST analysis over time to keep tabs on these factors and ensure your strategies and processes remain up to date.
Why do a PEST analysis?
Startups love talking about “greenfield” or “blue ocean” industries, but in reality, no work you can do is completely free of outside influences.
A PEST analysis helps you evaluate how your strategy fits into the broader business environment. It encourages strategic thinking by reminding you that your project, no matter how innovative, doesn’t exist in a vacuum.
By conducting a PEST analysis, you’ll be better prepared to plan initiatives for marketing, product, organizational change, and more that will account for environmental factors. The PEST analysis can function as a roadmap for your business, detailing potential pitfalls, roadblocks, and opportunities for growth.
Common use cases for a PEST analysis
Imagine an oil company deciding whether to pivot to renewable energy. The company’s leadership team gets together to conduct a PEST analysis on the potential change.
First, they talk about political factors. Someone mentions that carbon taxes and cap-and-trade schemes are growing more popular around the globe. This will make drilling for oil more expensive over time.
Then they discuss economic factors. An attendee points out that oil prices are currently quite high — a potential reason to stay the course.
Social factors include the increasingly negative public view of fossil fuel extractions as more research about climate change appears in the news. Public pressure might cause additional problems in the political quadrant.
Finally, technological factors have made wind and solar development cheaper than oil extraction in the short term.
The team realizes that while there are arguments on both sides, more factors favor pivoting than staying the course. They vote to partially transition to producing renewable energy.
What is the difference between a SWOT analysis and a PEST analysis?
A SWOT analysis is mostly focused internally and on direct competitors. Its purpose is to understand how your business has succeeded so far and how it can use those assets to succeed in the future. While a SWOT analysis can incorporate outside factors, especially in the Opportunity and Threat quadrants, it’s not completely outward-looking like a PEST analysis.
Get started with this template right now.
Business Pitch Template
Works best for:
Business Pitch
The Business Pitch Template uses visual aids to enhance your pitch, making it more impactful and easier to understand. This gives your pitch an edge, leaving a lasting impression and greatly improving your ability to convey your ideas persuasively.
Kano Model Template
Works best for:
Desk Research, Product Management, Prioritization
When it comes down to it, a product’s success is determined by the features it offers and the satisfaction it gives to customers. So which features matter most? The Kano model will help you decide. It’s a simple, powerful method for helping you prioritize all your features — by comparing how much satisfaction a feature will deliver to what it will cost to implement. This template lets you easily create a standard Kano model, with two axes (satisfaction and functionality) creating a quadrant with four values: attractive, performance, indifferent, and must-be.
Assumption Grid Template
Works best for:
Leadership, Decision Making, Strategic Planning
Someone wise once said that nothing in life is certain. But the waters of the business world? It can seem especially uncertain and unclear. An Assumption Grid can help you navigate those waters and make your decisions confidently. It organizes your business ideas according to the certainty and risk of each — then your team can discuss them and make judgment calls, prioritize, mitigate risk, and overcome uncertainties. That’s why an Assumption Grid is a powerful tool for getting past the decision paralysis that every team occasionally faces.
Business Model Canvas Template
Works best for:
Leadership, Agile Methodology, Strategic Planning
Your business model: Nothing is more fundamental to who you are, what you create and sell, or ultimately whether or not you succeed. Using nine key building blocks (representing nine core business elements), a BMC gives you a highly usable strategic tool to develop and display your business model. What makes this template great for your team? It’s quick and easy to use, it keeps your value proposition front and center, and it creates a space to inspire ideation.
Cynefin Framework Template
Works best for:
Leadership, Decision Making, Prioritization
Companies face a range of complex problems. At times, these problems leave the decision makers unsure where to even begin or what questions to ask. The Cynefin Framework, developed by Dave Snowden at IBM in 1999, can help you navigate those problems and find the appropriate response. Many organizations use this powerful, flexible framework to aid them during product development, marketing plans, and organizational strategy, or when faced with a crisis. This template is also ideal for training new hires on how to react to such an event.
Three-Hour Brand Sprint Template
Works best for:
Marketing, Workshops, Sprint Planning
Before customers will believe in your brand, your team has to believe. That’s where brand sprints work wonders. Popularized by the team at Google Ventures, a brand sprint will help your team sort through all different ideas about your brand and align on your brand’s fundamental building blocks—your values, audience, personality, mission statement, roadmap, and more. Whether you’re building a new brand or revamping an existing one, brand sprints are ideal for trigger events such as naming your company, designing a logo, hiring an agency, or writing a manifesto.