PEST analysis as an analysis

PEST stands for Political, Economic, Social and Technological; these four aspects largely cover the scope of a macro-environmental assessment in a case study in strategic management. Other terms such as PESTEL and SLEPT are about the same. Students can easily find examples of PEST as well as worksheet of conducting PEST in textbooks or doing simple internet search. In actual applications by students, most PEST analysis exercises are not analysis: they are just a list of examples as related to the external environment that are groupded into 4 categories, ie. P, E, S. T.. Very often, students are not able to highlight the main implications of their "PEST" analysis.

I would like to suggest a few points to bear in mind when conducting PEST analysis (aslo refer to the PEST diagram below):

a. Be aware of what and why the management team (or you as an analyst) are concerned about certain items in the PEST list.
b. Try to relate the various PEST items together in the form of a cognitive map (a soft OR technique) you could label the items as a P, E, S, or T item. With that, you are able to comprehend the systemic nature of the macro-environement facing the company being studied.
c. Try to group the items in the PEST cognitive map into a number of key themes; that help you to identify and understand the key topic areas and themes that emerge from your PEST analysis.

From your PEST cognitive map, you identify trends and events that could be considered as strategic issues for the company's management to review. You could also compile your specific strategic issues list after you have conducted a SWOT analysis.  At this stage, I suggest you provide some overall assessment viewpoints based on your PEST analysis, e.g. the external environment facing the company is very dynamic, complex, uncertain, and/ or hostile, etc.

Based on your understanding of the macro-environment facing the company, you can now focus on analysing the micro-environment (industry-specific environment) in the case study with the 5-Force model of Porter (if this is indeed what you intend to do).

Another lecture note on the PEST analysis as related to Industry analysis and SWOT analysis: