Understanding your sector
Understanding your sector

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

3.1 Questions to ask during the PEST analysis

Listed below is a set of questions that you can use to conduct your PEST analysis and to start you thinking about the appropriate areas to cover within this. You will notice that the questions are what might be described as ‘broad-brush’ questions that could be applied to any sector or organisation.

As you become more familiar with the PEST analysis technique, you will probably develop a more sophisticated range of questions more relevant to your sector. However, the following questions will serve to get you started and you may be able to think of others as you proceed.

  • Political
    • What governmental policies and actions are likely to affect my organisation or sector?
    • What changes are likely in the political priorities of government at regional, national and European levels?
    • How are these changes likely to affect the general climate in which my organisation operates?
  • Economic
    • Are there any economic trends or indicators that are favourable towards my organisation or sector?
    • Are there any clouds on the economic horizon that might affect my organisation or sector?
    • How volatile is the national, European or global economy?
  • Social
    • What key influences are affecting people’s attitudes and behaviour in ways that might affect my organisation or sector?
    • Are there trends discernible in particular groups that have implications for my organisation or sector?
    • What demographic changes within key populations might have implications for my organisation or sector?
  • Technological
    • What emerging technologies might have implications for my organisation or sector?
    • Which technologies are becoming redundant, the decline of which might pose a threat to my organisation or sector?
    • Will any changing technologies have an impact on political or economic events with implications for my organisation or sector?

Alongside these key questions – and others that you might think of – is the important issue of timescale. You should begin with the short term, i.e. the next year or so, and then look further ahead. Bear in mind that certain factors, particularly political and economic events, can be very volatile and change very quickly. For example, how many people or organisations can claim to have foreseen the economic crash of 2008 or the global pandemic of 2020 and to have planned appropriately for it?

Activity 3 Conducting a PEST analysis

Timing: Allow about 15 minutes

Think about your workplace, organisation or sector; if you are not currently working, think about previous employment or a job that you are aiming for. The broader your perspective, the more likely you are to take into account the range of factors that you have been considering in this section.

Try to identify at least one factor within each of the four PEST dimensions and, if possible, to consider the two time frames displayed. A good place to start is to review the sources of information listed in Section 3 or to ask people that you work with for their ideas.

Table 4 Conducting a PEST analysis on your organisation

Category Short term (1–2 years) Longer term (3–5 years)
Political
To use this interactive functionality a free OU account is required. Sign in or register.
To use this interactive functionality a free OU account is required. Sign in or register.
Economic
To use this interactive functionality a free OU account is required. Sign in or register.
To use this interactive functionality a free OU account is required. Sign in or register.
Social
To use this interactive functionality a free OU account is required. Sign in or register.
To use this interactive functionality a free OU account is required. Sign in or register.
Technological
To use this interactive functionality a free OU account is required. Sign in or register.
To use this interactive functionality a free OU account is required. Sign in or register.
Words: 0
Interactive feature not available in single page view (see it in standard view).

Comment

You have now done a PEST analysis – congratulations!

Bear in mind that the object of this activity is to start you thinking about the PEST dimensions, and the factors within them, and to provide you with some practice in using this method of analysis. You now have a powerful tool that you can use to improve your understanding of your sector.

A PEST analysis is not a once-and-for-all exercise. It needs to be done regularly as factors within the different categories may change, often quite swiftly. Moreover, you need to ensure that your research involves appropriate and varied sources so that you can keep up with possible changes. Think about the resources you used this time and whether you would use them in the future or would try different ones.

The analysis provides you with a meaningful baseline, however, for considering your sector and your organisation’s place within it. PEST analysis will help you to think in a structured way about factors that may seem remote, but which can have a significant impact on your working life.

Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to University-level study, we offer two introductory routes to our qualifications. You could either choose to start with an Access module, or a module which allows you to count your previous learning towards an Open University qualification. Read our guide on Where to take your learning next for more information.

Not ready for formal University study? Then browse over 1000 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus371