What does these four letters mean?
It's actually a tool used for understanding the growth of a business, including competitors'.
These four letters mean political, economical, social and technological respectively.
Political factor includes many areas, such as current legislation, international legislation, government policies, trading policies, international pressure groups, wars and conflicts, etc.
Areas that economical factor covers include economy trends, general taxation, seasonality issues, trade cycles, distribution trends, exchange rates, etc.
Social factor includes lifestyle trends, demographics, consumer attitudes and opinions, media views, consumer buying patterns, advertising and publicity, ethical issues, etc.
Technological factor covers areas like competing technology development, research funding, maturity of technology, innovation potential, intellectual property issues, global communications, etc.
Identifying the PEST influences is a useful way of summarising the external environment in which a business operates. However, it should be followed up by how a business should respond to these influences.
So, businesses better check these factors out! :)