PEST Analysis – Four Reasons behind using it
For over a few centuries, there is a constant change in the way people used to do business and develop it by performing a set of specific actions that may cause in the increment of business circle. Today, there is a great range of tools that are used in a business with the aim to assess its present condition and improve it as soon as possible. PEST Analysis is the only tool in the world of business that can be used to explore the BIG OPPORTUNITIES along with external threats to your business. Certainly, there are many processes that are used in the world of business but this one possesses additional importance. Why it is like that? Let’s find it out further.
It is sure that a few changes in business environment may cause threats to your business as well as may create some more opportunities. The world of business is uncertain. Nobody knows when the market will raise or go down suddenly. Under these circumstances, you should have information generated through proper and effective analysis that can be used to either take precautions or improve the shape of a business. PEST Analysis is the best tool to do. It offers you information about four external factors of your business that can open many opportunities for you. Those factors are Political, Economic, Social, and Technological. It is a very simple tool and is used in almost every business because it tells what will happen next if you make changes associated with these four factors.
Most of the experts say that PEST Analysis helps in understanding BIG PICTURE forces and improvements that can benefit business through making a set of new opportunities. Do want to know the history of this tool? If so, then keep reading. In 1967, a professor of Harvard named Francis Aguilar introduced a term ETPS that is a scanning tool. The term was introduced in a book “Scanning the Business Environment”. It is not sure whether he is the real man behind the creation of this useful tool, but many thought Francis is creator. There are many reasons behind using PEST analysis. Below are the top four reasons that will surely clear your perception about why this tool is used.
- It assists you to grab personal or business opportunities that are beneficial for business and it lets you know about the possible threats in advance.
- It unveils the real direction of change and in what ways it will affect your business. Surely, you are not going to make a move against the change, but it will help you re-shape what you are up to.
- It assists you to keep a break on the projects or stop those projects that are a little likely to fail for a few reasons that may be out of your control.
- If you are going to step in the new market, country or region with business purpose, then this process will help you to avoid assumptions and work on what really matters.
These are the four reason why PEST Analysis is beneficial for business.