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.
Strategy Map Template
Works best for:
Leadership, Strategic Planning, Mapping
How do your individual or team goals relate to an organization’s overall strategy? A Strategy Map is a stylized picture of your organization’s strategy and objectives. It’s powerful because it provides a clear visual guide to how these various elements work together. Strategy Maps can help align various different team goals with the overall strategy and mission. With the Strategy Map in place, teams can create set actionable, relevant KPIs. Strategy mapping is often considered part of the balanced scorecard (BSC) methodology, which is a strategic planning tool for setting overall team goals.
User Interview Template
Works best for:
Desk Research, Product Management
A user interview is a UX research technique in which researchers ask the user questions about a topic. They allow your team to quickly and easily collect user data and learn more about your users. In general, organizations conduct user interviews to gather background data, to understand how people use technology, to take a snapshot of how users interact with a product, to understand user objectives and motivations, and to find users’ pain points. Use this template to record notes during an interview to ensure you’re gathering the data you need to create personas.
Reverse Brainstorming Template
Works best for:
Ideation, Brainstorming, Team Meetings
Reverse brainstorming is a technique that prompts a group to think of problems, rather than solutions. Because we naturally think of problems, it’s a great way to get a group to anticipate problems that may occur during a project. To engage in reverse brainstorming, start by identifying the problem, and then think of things that might exacerbate it. Ask your team to generate ideas around ways in which the problem could get worse. Reverse the problems into solutions again, and then evaluate your ideas.
REAN Template
Works best for:
Marketing, Strategic Planning, Meetings
First introduced in Cult of Analytics, the REAN model is used to measure and understand the efficacy of marketing efforts. REAN stands for Reach, Engage, Activate, and Nurture, the main stages a marketer’s audiences experience during a typical journey. The REAN model helps marketing teams develop useful KPIs that can help capture how well their marketing or ad campaigns are working. Many teams rely on the REAN model because it is adaptable to a variety of marketing efforts, including planning measurement frameworks, setting goals, deciding on objectives, and mapping digital marketing channels.
Strategy Diamond Template
Works best for:
Leadership, Operations, Strategic Planning
To achieve key objectives, every business assembles a series of strategies. But what elements should you consider when building a strategy? A strategy diamond is a collection of elements forming a coherent business strategy. These elements include: Arenas, Differentiators, Vehicles, Staging, and Economic Logic. Most strategic plans focus on just one or two of these elements, creating gaps that might cause problems for your business later on. A strategy diamond can help you stay focused and ensure you’re fulfilling all of your business’s needs rather than one or two.
Lean Canvas Template
Works best for:
Agile Methodology, Strategic Planning, Agile Workflows
Business opportunities can get dense, cumbersome, and complex, and evaluating them can be a real challenge. Let a lean canvas streamline things and break down your business idea for you and your team. A great tool or entrepreneurs and emerging businesses, this one-page business model gives you an easy, high-level view of your idea — so you can stay focused on overall strategy, identify potential threats and opportunities, and brainstorm the various factors at play in determining your potential profitability in an industry.