The longer, broader view. Take a look at SWOT’s neglected sibling.
PEST* analysis is the somewhat neglected sibling of SWOT analysis, which is a shame because it is an excellent tool for analyzing various macro forces that critically impact a businesses. While SWOT is good for targeting near-term priorities, PEST looks longer, broader view. As such, PEST is a great approach for identifying new ideas, opportunities and interesting topics for discussion.
In a sales and consulting environment, PEST can be applied to identify outlying topics that broaden a customer or client’s thinking and change their perception of the person they are dealing with. The person becomes more of a business consultant, more than a product or service provider.
The letters of PEST represent Political, Economic, Social and Technological. Over the years, marketers and business consultants have refined and re-shaped PEST to resulting in multiple variants such as DESTEP, PESTEL and STEEPLE. Different derivatives of the model may be more suited to different industries (hospitality versus software say) and scenarios (new business business unit or new product).
Here we look in more depth at our preferred variation: STEEPLE.
- Population demographics
- Cultural trends
- Artificial intelligence
- Research & development
- Climate change
- Weather seasonality
- Interest rates
- Consumer protection
- Labor laws
- Safety standards
- Wage equality
- Safe working
- Social responsibility
- Community relations
It takes just a few minutes to scroll through each of the 7 lenses above, and come up with a question for each. Applying STEEPLE to a hotel business for example might result in the following questions:
How will increased concern over health and cleanliness impact our cleaning costs and demand for shared leisure facilities?
How can we better leverage mobile technology in our hotel cars to improve the customer experience?
With a fall in overseas visitors, what should we be doing to attract more domestic customers?
What could we do to reduce the amount of water we use and become more water independent?
How would an increase of 1% in sales tax / VAT impact our customers and our business?
How do we ensure that our sub-contractors comply with labor laws?
What are our policies and processes for ensuring wage equality between sexes?
Note that in the above example it could be argued that the question under Political relating to taxation could be argued to be an Economic question. It doesn’t matter! The key is to use the framework to broaden your thinking and come up with interesting questions and topics for discussion.
Taking these questions to your clients and customers helps them think about topics that they may not have considered and positions you as someone who a) cares about the future of their business and b) thinks broadly and commercially – traits that are highly valued in business.
See below for an expanded list of considerations under each heading:
- Demographics – Population size and growth rate. Birth rates. Death rates. Life expectancy. Age distribution.
- Wealth distribution. Social classes. Income disparity.
- Marriage and divorce rates. Family size.
- Immigration and emigration rates.
- Attitudes to immigrants and minorities.
- Education levels. Crime levels.
- Lifestyle trends and leisure interests
- Consumer attitudes and opinions
- Media views
- Fashion and role models
- Ethnic/religious factors
- Cultural norms and values
- Mobile phone penetration
- Drug proliferation
- Economic situation and trends
- Employment level and disposable income
- Skill level / productivity of workforce
- Level of government intervention in the economy
- Growth rate, exchange rates, interest and inflation rates
- Savings and credit levels
- International trade/monetary issues
- Overseas economies and trends
- Specific industry factors
- Market routes and distribution trends
- Efficiency of financial markets
- Infrastructure quality
- Business cycle stage (e.g. prosperity, recession, recovery)
- Political stability
- Government stability/instability
- Corruption level
- Press freedom and independence
- Government involvement in business
- Competition regulation
- Level of government subsidies
- Bilateral relationships and favored trading partners
- Government policies
- Government term and change
- Funding, grants and initiatives
- Home market lobbying / pressure groups
- International pressure groups
- International memberships
- Pricing regulations
- Wars and conflict
- Brand reputation
- Transparency and accountability
- Racial and sexual equality
- Gender tolerance and equality
- Money laundering
- Impact on communities
- Minimum wage
- Artificial intelligence
- Data security and privacy
- Automation / worker productivity
- Research funding
- Replacement technology
- Technology capacity and life-cycle
- Innovation levels
- Technology incentives and government support
- Internet and communication infrastructure
- Copyright, patent and licensing
- Technology adoption rate
- Weather, climate and climate change
- Seasonality/weather issues
- Natural disasters, mitigation measures and disaster recovery plans
- Energy and water security
- Air, water, noise and light pollution
- Waste levels and disposal
- Recycling efforts
- Energy mix
- Water use and recapture
- Community attitudes
- Worker participation and community engagement
- Support for renewable energy
- Pressures from NGO’s
- Legal and regulatory regime
- Legal framework for contract enforcement
- Intellectual property protection
- Litigation environment
- Legal administrative complexity and timescales
- Trade regulations and tariffs
- Foreign exchange restrictions
- Regulatory bodies and processes
- Laws on:
- Consumer protection
- Copyright and patent
- Health and safety
- Data protection
- Waste and recycling
- Anti-money laundering
* The origins of PEST are generally traced back to Francis Aguilar, a professor at Harvard Business School. He outlined the less easily remembered ETPS approach in his 1967 book “Scanning the Business Environment”. The fours lenses are: Economic; Technical; Political and Social.