Study of the external marketing environment, including factors such as customers, competition, and social change. An external analysis allows a business to predict and recognise the threats and opportunities associated with their area of business. Companies sometimes use a PEST analysis to identify the main opportunities and threats in their market:
PEST is an acronym for:
Political and legal changes such as new regulations
Economic factors such as interest rates, exchange rates and consumer confidence
Social factors such as changing attitudes and lifestyles, and the ageing population
Technological factors such as new materials and growing use of the Internet.