PEST analysis is an important step in understanding market conditions.
In a PEST analysis, you need to look at political and legal, economic, social, technological (and natural) factors. These may shape opportunities or create threats and can affect your company’s ability to build customer relationships. With proper external analysis, you will gain an overview of the different macro environmental factors that you need to take into consideration before venturing into a new business area or new market.
In analysing key players in the market, you will gain a better understanding of suppliers, intermediaries, customers, competitors and the public and how they may work with or against your company.
A detailed assessment of all these forces will help you determine the potential of prospective markets. With this information on hand, you are now a step closer to making more informed decisions about your business ventures. A brief summary of all these factors are shown in the tables overleaf.
Act on It
Sources for Market Data
1> Visit IE Singapore’s portal, library and panel of advisors, which is available to Singapore registered companies.
2> Visit EnterpriseOne Business Information Services (EBIS) portal for free and customised competitor and industry reports, expert advisory services and access to >160 international databases.
3> Personal visit to Trade Missions of various countries.
1> Purchase market reports from research companies, which are useful for mass market products. However they may be costly.
2> Visit the libraries of local universities. They contain the latest journals and provide access to useful databases but usually require some nominal membership fee.
1> Visit Action Community for Entrepreneurship portal and participate in the events, where established business people share their experience with new entrepreneurs.
Details of each component in the PEST analysis